Re: Isn't this exactly the way Blackberry crashed and burned?
I don't usually agree with The Register on their Apple analysis. I think they misunderstand the market dynamics, and how Apple fares in the market of interest to them - e.g. the market where there is a healthy margin. I think they lack sophistication in their understanding so fail to see the extent to which when companies competing downwards on price, it can, paradoxically, end up being bad for the consumer (far better to compete upwards on quality of produce and service). In that context iPhones have actually been doing rather well.
However there is little doubt this is bad news for Apple. The iPad is the new category of device they pioneered. Forget market share as that, for the above reasons, is to a large exert something of a red-herring (Apple don't want market share that is only available when margins are low - other than Samsung previous few others in the phone and tablet market are making any substantial profit). Sales growth should simply not be nearly flat. Not yet. Tablets are still a massively growth market.
Many people will jump to the "It's too expensive" conclusion. However that's too easy an analysis and I don't think it's right. Apple have maintained prices successfully in almost every category in the face of cut price competition. It can be done.
I think what this this shows is they have failed on another metric. When charging premium prices, it is essential there is no "non-premium" message or chink in your armour in any area that really counts when users are making their purchasing decision. In my view a significant reason for sales flattening is because the iPad mini failed with regard to screen resolution. For the most part, on Apple's philosophy, specs don't matter so much as visceral experience. But the screen does relate, very directly, to visceral experience. It was simply not good enough to launch a mini tablet with premium pricing, that did not match the competition in this key regard. It inserted the message in the buyers head - "premium prices for less not more" and destroys the inverse meme that is an absolute requirement for Apple's success "greater than the sum of it's parts"
This would work as a reverse marketing ladder (a marketing ladder is where product ranges are designed such that a small extra outlay gives you an extra feature you want - it should actually be renamed a market rack, as it makes you feel you are being stretched out). User's considering an iPad purchase, whether big or small size, will have been thinking about portability and considering the mini as well, and finding it falling short on a key quality metric would introduce uncertainty into the buying process (let me compare with others just one more time) and serve to call the next level into question also.
There are, for sure, likely other factors at play also (and Price is of course one, but just not in my view one that is as important as most think). But I think the above is a significant one.
It will be interesting if the iPad mini retina reverses the trend. However for many purchases some damage will have been done and the message is already out where it seems new premium buyers have been trying other brands.