ipad_1-crop-promovar-mediumlarge1

Tim Cook hinted at significant developments to the iPad line in describing the recent 16 percent drop in year-on-year sales yesterday as “a speedbump” in an interview with Re/code.

“We couldn’t be happier with how we’ve done with the first four years of the iPad. I’d call what’s going on recently a speed bump, and I’ve seen that in every category” …

He made that same comment before during the last earnings call and obviously that’s not the whole story…

Re/code pointed to the above Slate chart, which provides some perspective on the scale of Apple’s iPad business. Yes, sales have taken a hit, but the product still generates more revenue than Yahoo, Facebook, LinkedIn, Twitter. Groupon and Tesla combined.

The challenge Cook faces is, as we argued back in April, that the iPad upgrade cycle appears to be closer to that of PCs than smartphones. People only upgrade their iPad when given a good reason to. If Apple is to grow iPad sales, it needs to provide that reason.

Cook isn’t stupid: he understands that. If the new iPads in the works were going to offer only incremental change, he’d fall flat on his face with this prediction.

Marketing may provide part of the answer. Cook has said in the past that he sees great opportunity for the iPad in education, with 13M iPads already in use in education worldwide. The partnership with IBM is also likely to significantly boost enterprise sales. But for sustained growth, consumer sales are vital, and consumers only upgrade when offered something new and interesting.

There has so far been little in the way of leaks suggesting what that might be. Touch ID is a no-brainer, and anyone who has experienced its convenience on the iPhone 5s is going to be tempted to enjoy the same benefit on their iPad, but is certainly not enough on its own.

ipad-pro-03

Bloomberg yesterday reported that the long-rumored larger iPad is on the way, predicting a 12.9-inch model in the first quarter next year. It’ll be interested to see how this fares, but my guess is that it will be something of a niche model, akin to the MacBook Pro 17 in the days when that was part of the line-up: very popular with a small segment of the market but not a mainstream choice.

It’s possible that the split-screen functionality we revealed in May and showed crudely demonstrated in June might be limited to new models. If so, that definitely increases the productivity of the device, and is likely to be particularly popular in the enterprise market and could fuel a buying spree

When the original iPhone wasn’t selling so hot, Apple dropped the prices and fired up subsidies so perhaps that’s an area Apple could make some moves with the iPad as well.

Then there are colors. The iPad 5c?

Perhaps there will be no one killer feature, and it’ll be a mix of enhancements that add up to sufficient reason to upgrade. But if the slow-down is to truly be nothing more than a speedbump, Apple will face that same challenge a year from now, and the year after that. If the company truly can rise to it, it’s going to be an interesting ride.