Defining The Apple iPad’s Market

  • Posted: 14 March 2010 03:21 PM

    I’ve been reading comments around the Web about the Apple iPad in response to reports of robust pre-order activity. It’s clear this is a misunderstood product. I posted my views on defining the Apple iPad’s market at Eventide.

    The blog post started as a response to comments about PED’s column on early iPad sales. But when my intended post became lengthier than his original column, I chose to post it on my blog instead.

    The iPad isn’t intended to compete with laptops, it’s intended to compete economically with netbooks.

         
  • Posted: 14 March 2010 04:31 PM #1

    I’ve carried a laptop nearly 10 years, every day in my truck. If I can accomplish my job take offs, estimates, proposals, invoices, email and these boards with an iPad, then it will surely replace the new laptop I have in mind.

    One of the lessons of this life is that I am not very unique in my purchasing habits.

    The notion that a device that does 75% of a laptops duties will not affect laptop sales is just not well considered.

         
  • Posted: 14 March 2010 05:05 PM #2

    I read your post on Eventide.

    I do not think it matters much what any writer opines about the iPad.

    Consumers will determine what the iPad replaces or does not replace.  I will wait to hear from the consumers in quarterly sales reports.

    The iPhone largely replaced a laptop for me.  The iPad will do so more completely.

    I purposefully held off on a laptop purchase until the iPad came out, buying a 27 inch iMac instead.  The iPad will work well with that, and with the camera connect kit, will do everything I want it to on my travels. 

    If an iPad version of iWeb comes out, so much the better.

         
  • Posted: 14 March 2010 05:53 PM #3

    roni - 14 March 2010 08:05 PM

    If an iPad version of iWeb comes out, so much the better.

    I would be surprised if it doesn’t appear in time. First we’ll see the iWork suite available. iWeb has its uses, but I find it a bit frustrating and limited unless one is willing to use only pre-formatted pages.

         
  • Posted: 14 March 2010 06:03 PM #4

    roni - 14 March 2010 08:05 PM

    Consumers will determine what the iPad replaces or does not replace.  I will wait to hear from the consumers in quarterly sales reports.

    The iPhone largely replaced a laptop for me.  The iPad will do so more completely.

    The post was in response to claims the iPad isn’t a laptop replacement. It’s not from the standpoint of positioning and design.

    The fastest growing segment of the PC market is also the weakest to defend and protect - the netbook segment. In my view Apple has chosen to sidestep the netbook market and provide a much more enriching solution for consumers. Despite the volume there’s little money to be made in the netbook market and consumer-focused development is quickly moving away from PCs to eco-systems such as the iPhone OS.

         
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    Posted: 15 March 2010 02:19 PM #5

    DawnTreader - 14 March 2010 09:03 PM

    The post was in response to claims the iPad isn’t a laptop replacement. It’s not from the standpoint of positioning and design.

    The fastest growing segment of the PC market is also the weakest to defend and protect - the netbook segment. In my view Apple has chosen to sidestep the netbook market and provide a much more enriching solution for consumers. Despite the volume there’s little money to be made in the netbook market and consumer-focused development is quickly moving away from PCs to eco-systems such as the iPhone OS.

    DT, I like your choice of words (“sidestep”). Obviously, Apple is creating a new market (again), and the iPad is not a Netbook - but it *is* a netbook substitute (and, for some, a laptop substitute).

    Does anyone remember the first iPod shuffle introduction? Apple had already grabbed much market share in the high-end market (hard drive & flash) - and SJ proclaimed: “we’d like to go after the remaining mainstream flash market”. For anyone needing a refresher, highly recommended: http://www.youtube.com/watch?v=nqL3wUlRFD0

    Apple has made great inroads into the high-end laptop market with MB/MBP. Let’s see how they tackle the netbooks.

         
  • Posted: 16 March 2010 01:18 AM #6

    Roman - 15 March 2010 05:19 PM

    Apple has made great inroads into the high-end laptop market with MB/MBP. Let’s see how they tackle the netbooks.

    Outside of netbooks Apple pretty much owns the domestic laptop market. As roni suggests above, a broad cross section of consumers will find the Apple iPad an attractive product. But from a strategic point of view, I believe the iPad is designed to compete with netbooks.

    I was at big electronics store today. I can’t imagine using a netbook for anything other some Web surfing, email and I were inclined social networking activity. Other than that netbooks are underpowered and cheaply made. Netbooks also offer few monetization opportunities following sale. Do you really think most netbook owners are going to invest hundreds of dollars in software after purchase? If so, think again.

    Netbooks are nothing more than an awkward transition product between laptops and the migration to handheld digital devices such as the iPhone and iPad. Netbooks do nothing particularly well and are sold based mostly on price alone. For Apple the netbook market is where the money is for now and the iPad offers monetization opportunities that are almost unreal. Apple will monetize a market currently populated by cheap netbooks selling on price alone.

    Put an iPad next to a netbook and ask passersby which they would prefer to own. Most of know the answer already.

         
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    Posted: 16 March 2010 02:44 AM #7

    DawnTreader - 16 March 2010 04:18 AM
    Roman - 15 March 2010 05:19 PM

    Apple has made great inroads into the high-end laptop market with MB/MBP. Let’s see how they tackle the netbooks.

    Outside of netbooks Apple pretty much owns the domestic laptop market. As roni suggests above, a broad cross section of consumers will find the Apple iPad an attractive product. But from a strategic point of view, I believe the iPad is designed to compete with netbooks.

    Agreed - that’s why I linked to the video above. smile  With mp3 players, Apple first went for the high-end market, then continued to the low-end market. In PCs, they started with laptops, and now continue with a netbook replacement.

    I go to school in NYC and currently carry my MBP, which is bulky and quite awkward to open on the subway (and impossible to use during rush hour). When I get the iPad, I plan to read lecture notes on it, watch downloadable missed lectures, and more than likely take notes in class - not to mention browsing the Net and checking email. Some folks at school currently use a netbook, and I bet I’ll be more productive with the Apple gadget.

    I’m looking forward to consumers trying this product and recognizing that “touching” media (photos, video, music) and “touching” the Internet are fundamentally different experiences from using a clunky netbook. Then their complaints of “this is just a large iPod touch” will start to evaporate.

         
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    Posted: 16 March 2010 07:10 AM #8

    While typing this on a netbook, having preordered the iPad, I don’t expect to get rid of my netbook anytime soon. In fact, I’ve gotten rid of my 13” Macbook in favor of this 9” Dell. But I’m a geek - I *need* a small and fully functional computer.  I’m also an educator. I *need* something that is completely unobtrusive in the classroom, boardroom, living room. The laptop and netbook are VERY obtrusive in these situations. The iPad removes so much of what is annoying about laptops. Clacking keys, flipped up screens blocking other students, short battery life, incompatible software (flash, other plug-ins). In the world of evaluation, there’s a recent trend to simplify on just one question: Would you recommend this product to a friend? For Apple, the one question has been asked since the beginning, and always most loudly under Steve: Will this product simplify the world for the user?  When the pundits realize it is ALWAYS about the user experience, and always has been, they might do better at defining the market.

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    Posted: 16 March 2010 12:03 PM #9

    DawnTreader - 14 March 2010 06:21 PM

    The iPad isn’t intended to compete with laptops, it’s intended to compete economically with netbooks.

    For $500 shipped from Amazon, you can get an ASUS Eee PC t91MT. It’s a convertible tablet PC that includes a usable keyboard, multi-touch trackpad, multi-touch screen, and a stylus. It runs Windows 7 and has VGA out built in, along with a USB 2.0 port. You can use Windows Journal to take notes, or spend $150 on Office for Home and School ($108 at Amazon) and get the whole OneNote experience (along with all the other Office staples).

    That is a high end netbook. The low-end starts at $300 with Acer models that do all that stuff in a standard clamshell form except the touch/pen screen.

    The iPad does not compete economically with these at all. Sorry.

         
  • Posted: 16 March 2010 01:09 PM #10

    You list those features as if my Mom or kids would care!  That is not to say Windows 7 isn’t for you, just not my 7 year old. 
    :D

    But who knows, maybe consumers won’t choose the iPhone OS model of tablet computing that abstracts away things like the file system.  Or the ipad form factor that shaves off thickness and weight while matching or most likely besting battery life and speed.  Just remember that for the same $500 some may choose one experience over another based upon more than just a feature list.

    [ Edited: 16 March 2010 01:14 PM by alcatholic ]

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    Posted: 16 March 2010 01:14 PM #11

    Che Bosco - 16 March 2010 03:03 PM
    DawnTreader - 14 March 2010 06:21 PM

    The iPad isn’t intended to compete with laptops, it’s intended to compete economically with netbooks.

    For $500 shipped from Amazon, you can get an ASUS Eee PC t91MT. It’s a convertible tablet PC that includes a usable keyboard, multi-touch trackpad, multi-touch screen, and a stylus. It runs Windows 7 and has VGA out built in, along with a USB 2.0 port. You can use Windows Journal to take notes, or spend $150 on Office for Home and School ($108 at Amazon) and get the whole OneNote experience (along with all the other Office staples).

    That is a high end netbook. The low-end starts at $300 with Acer models that do all that stuff in a standard clamshell form except the touch/pen screen.

    The iPad does not compete economically with these at all. Sorry.

    But the iPad does not require costly antiviral software that may or may not work.  Word processing will cost $10 rather than $108.  The software is easier to use than full-fledged Windows.  A physical keyboard is not necessary for much of the work that people do, as the iPhone so elegantly proved.  A stylus is for Blackberry people.  Aside from that, the iPod proved that price alone does not drive buying decisions: elegance and ease-of-use are even more important.  Sorry.

         
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    Posted: 16 March 2010 01:19 PM #12

    alcatholic - 16 March 2010 04:09 PM

    Just remember that for the same $500 some may choose one experience over another based upon more than just a feature list.

    You don’t get a keyboard and VGA out from iPad for the same $500. You don’t get a stylus or USB at any price. The iPad is more expensive than the high end of the netbook market once you get the necessary accessories.

    Oh, and your 7 year old is way too old for pbskids.org, right? iPad no play the great educational Flash games there.

         
  • Posted: 16 March 2010 01:29 PM #13

    LOL!

    Windows 7, feature lists, AND Flash games?!  :D

    I’m on my iPhone so I can’t get into it right now, but honestly the iPhone taught us some interesting lessons about consumer electronics.

    Namaste.

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  • Posted: 16 March 2010 01:40 PM #14

    Let’s analyze Che Bosco’s ASUS Eee PC t91MT, which he says is a “high-end” netbook.

    Comments from Amazon.com:

    - The T91MT uses a resistive screen so it is never as responsive as the IPhone Capacitive screen.
    - I’ve notice while it is tablet mode, the processing power is restricted to only 800mhz.
    - The biggest problem here is still processing power. If you are running zoom while low in processing resources you will likely to make inaccurate zoom, going over the desired zoom level due to lag.
    - The battery life is reasonable to good; it runs down quicker in full performance setting, around 3hrs. (WOW, 3 HRS!! SWEET.) which is what I usually have it in due to the lack of processing power.
    - I installed the extra 2GB ram memory right away; it didn’t make much of a difference in terms of system performance. (HMM, THANK YOU WIN7).
    - In addition, a lot of online videos are unwatchable or choppy. Youtube content cannot be played in HQ and depending on the video some will be choppy even in LQ mode while in tablet mode.
    - Hulu has the same problems, more severe than Youtube since a alot of their video is in a higher quality format, Hulu is barely playable in netbook mode.
    - I will also mention Asus’s in-house software. The Touch Gate and Eee docking software are rather poor.
    - After a couple of weeks testing the T91MT, I can tell you that palm rejection is a lost cause. It is very difficult to write for longer than a few words on this net book, the palm rejection software distorts so badly that it is not worth turning on.
    - PDF magazine with lots of graphics can load slowly between pages and zooming can cause lag if you use the tablet mode, due to the reduced clock speed.

    Wow, I am going to run out and buy one now - NOT.  It’s all about user interface, and this proves that it will fall flat on its face.

         
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    Posted: 16 March 2010 01:42 PM #15

    Che Bosco - 16 March 2010 04:19 PM
    alcatholic - 16 March 2010 04:09 PM

    Just remember that for the same $500 some may choose one experience over another based upon more than just a feature list.

    You don’t get a keyboard and VGA out from iPad for the same $500. You don’t get a stylus or USB at any price. The iPad is more expensive than the high end of the netbook market once you get the necessary accessories.

    Oh, and your 7 year old is way too old for pbskids.org, right? iPad no play the great educational Flash games there.

    I see your point. Let me start by saying that for some users a netbook will be more appropriate, no one is trying to argue that the iPad will magically replace the whole category overnight. Above, looks like rezonate will be keeping both.

    However, with Apple’s products - especially the ones that create new categories - the feature comparison rarely works. Rather than competing directly, they create a substitute that’s often better (more convenient? more natural? just sleeker? all of the above?) than the products it may displace. For the risk of offering a very imperfect analogy, everyone used to complain that original iPod doesn’t have a radio tuner. In the end, it turns out it didn’t matter at all (and, in any case, iPod Touch now has Pandora). Then, people complained iPhone 3G doesn’t have a 5MP camera. Seriously? And now, you’re telling me the iPad lacks a stylus? Well, it also doesn’t have a mouse, that 30-year-old technology which I hate at this point. I don’t want a stylus, never did. Finally, there’s touch technology. Soon, touch and voice control will be the main sources of input.

    And speaking of the keyboard, rezonate brought up an excellent point: sometimes a physical keyboard is less desirable because it is distracting. In educational settings and business meetings it is clearly so. I’ve caught myself many times hating the person with loudest, clickiest keyboard in the room.

    Finally, as far as price is concerned, Apple always goes from the top and works its way down along the customers’ value perception by dropping the price. It’s a classic skimming strategy from Marketing 101. The netbook you mentioned is quite competitive with the iPad today, but may not be a year from now.