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Synergies of Apple-Cisco Collaboration

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Synergies of Apple-Cisco Collaboration PART 1 OF 6

Apple-Cisco Deal to Boost iPhone and iPad Sales

The Apple-Cisco deal

Apple (AAPL), a well-known name among consumers, is now looking to expand its presence in the corporate market. On May 31, 2015, the company announced a collaboration with Cisco (CSCO), a world leader in networking equipment. As part of the collaboration, Cisco’s systems will be integrated with iPhones and iPads. This means companies that run on Cisco’s Internet networks will be able to transfer content securely and quickly to iPhones and iPads.

Apple-Cisco Deal to Boost iPhone and iPad Sales

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iPad sales

As seen from the above graph, iPad sales have continued to fall, except in fiscal 1Q15. iPad sales fell to a four-year low of 10.9 million units in fiscal 3Q15. iPad sales were affected by the larger screen of iPhone 6 and iPhone 6 Plus and a lack of major technical updates.

According to IDC, iPad accounted for 27.6% of the global tablet market in 2014, and this figure is expected to fall further to 25.6% in 2015. iPad will face competition from Windows tablets by Microsoft (MSFT), whose share is expected to rise from 5.3% in 2014 to 7% in 2015.

Slowdown in tablet market

The entire tablet market has witnessed a slowdown in growth over the past few years. Despite falling demand for tablets worldwide, tablet use has grown among businesses. Forrester Research estimates that businesses will account for 20% of tablet sales globally in 2018 as compared to 12% in 2014.

In a move to boost iPad sales, Apple is targeting the corporate market, where its tablets are popular. The firm is loading its iOS devices with a host of features targeting business customers. In July 2014, the company entered into a deal with IBM (IBM) to make industry-specific iOS apps.

To gain exposure to Apple, you can invest in the Information Tech ETF (VGT). VGT maintains 16.88% of its holdings in Apple.

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