When the iPad was unveiled in 2010 Steve Jobs made the case that there was room for a new product category that was better at some key tasks than smartphone or laptops. Several common computing tasks were cited: web browsing, email, photos, video, music, games, reading, etc. iPad sales took off like a rocket ship, but have since come back to earth and have had five straight quarters of declining annual sales.
Smartphones and laptops have both rapidly improved in the last five years, as smartphones have increased in size and capability and laptops have become speedier and some have battery life matching tablets. Web browsing was the first thing demoed at the iPad announcement, and that too has evolved quite a bit in five years. On smartphones, the web is increasingly accessed through apps, not the web browser. This hurts the iPad's screen size advantage relative to a smartphone with a news or reading app designed specifically for a smaller screen.
Today it's more difficult to articulate what a tablet is better at. The Why iPad page currently on Apple's website is very reminiscent of Steve Jobs' 2010 presentation, with a focus on being better at common computing tasks than other devices. If this value proposition doesn't evolve, it seems the iPad is at risk of becoming more of a niche device. It won't replace the utility of a laptop, but it is a nice accessory to an iPhone, much like the Apple Watch currently is and the iPod was to the laptop in the past.
If that is true, I can think of two strategies to reinvigorate sales: create new uses cases where the iPad excels, or add new features to compete for laptop market share. Personally, I'd like to see an iPad with better multitasking and keyboard support. The iPad is a very easy device to use and maintain and perhaps with a few utility and productivity features it could take a bite out of the laptop market. Maybe that is what the new 12" Macbook is for, though.