iPad Over iPhone
There are two popular memes that are responsible for most people thinking that iPhones are a bigger opportunity than iPads:
1) Nobody needs an iPad
2) Everyone uses a phone
Nonsense, I say.
As to need for an iPad, when did basic need determine product success? Did anybody “need” a flat screen TV, when they all had TVs already? The iPad does enough things differently than existing alternatives to make it a compelling product. And what gives iPad the opportunity to be the biggest Apple product ever is the large percentage of the population (nationally and globally) that could find the iPad compelling, for different reasons. Kids will love it for games, seniors will love it for ease of use, hospital users will love it for portability…the list goes on and on. It’s a universally useful product.
As to phone ubiquity, that actually works against the iPhone, since most everyone is locked into phone contracts that make switching difficult. The iPhone market in the US is limited because of AT&T exclusivity, and the phone is expensive (for a phone) for much of the international market.
If the iPad had been released a few years before the iPhone, the relative importance of these products would be easier to discern. It will take a few years for the iPad to overcome the iPhone’s head start. And each of these products will have a halo effect on the other. But the iPad will prevail as Apple’s number 1 product, just as it is already the fastest selling product out of the gate in Apple history.
I think part of the problem analyst have in determining the size of the market for iPad is the problem of categorization. We have these existing buckets which all the number crunchers use and they attempt to stick it in a existing category. For example the iPad is a tablet. Tablet PCs have always failed so let’s estimate 1M units in the first year. They have no clue how well iPad will sell but they need a guess. If the iPad was a smart phone then we have metrics on how fast the smart phone market is growing and we can guess market rate performance, but alas the iPad is not a phone. So is it a PC? It is next to impossible to determine the long term success of a product in the 1st qtr of release since we are in the early adoption phase, but the fact that the iPad is flying off the shelf now points to a fairly larger potential if the iPad reaches mass market status. Most tech product follow a S curve type adoption. So the fact we can move several million units points to a much larger target market.
It will be interesting to see where the iPad falls. Many of the Mac faithful have bought into this already. The challenge may be getting those not in the Apple ecosystem to buy into the iPad.
And as Pat wrote”...part of the problem…is…categorization.” This is a real challenge from a forecasting standpoint. Is it a Tablet, Notebook, a big iPod Touch. Currently, I think the closest would be a Notebook if only due to it ability to connect to the web via 3G/Wi-Fi. But as others have written, it is primarily a media consumption tool, not a media creator. This puts it into a different category than most PCs.
Yet, as I have seen with those in their 20s, most of the ‘work’ done on the computer to link to social networks. This is why many young adults are giving up the computer (unless needed for work), the landline phone, and home-based internet connection. Instead they are an iPhone (or other smartphone) to serve all of those needs. With a 3G connection, I can see the iPad fulfilling all but the phone better than an iPhone. So this will likely see strong sales among the 20 somethings, especially those not wanting to use ATT cellphone service.
“Once we roared like lions for liberty; now we bleat like sheep for security! The solution for America’s problem is not in terms of big government, but it is in big men over whom nobody stands in control but God.” ?Norman Vincent Peale
In a few years, say “Touchscreen” and everyone will ask “iPad, Macbook or iMac”.
Gaming is one area of the market where Apple’s idevices are having a huge sort of stealth impact. Since the Iphone is a smart phone and the Ipod an MP3 player, they were sort of hiding under the radar in all the statistics. I think it is obvious now that Apple is a force in the hand held gaming platforms and is no longer being ignored
Devices like the iPhone and iPod touch may have sparked a collapse in handheld game system sales in April, new NPD data found. The overall US console market’s revenue dropped 27 percent last month, but the Nintendo DS and Sony PSP accounted for 61 percent of the overall drop even though they represented just a quarter of all revenue. Nintendo was especially hard-hit as DS sales were cut by more than half versus a year ago to just 440,800.
The drop-off wasn’t explained by analysts, but the six-year age of both the DS and PSP lifecycles is widely recognized as an influence on sales.
However, recent signs have hinted that the decline may be attributable to the effects of media players and smartphones, especially those from Apple. The iPhone and iPod are already known to have damaged Nintendo and Sony revenue in the past year by leading many to either buy one of Apple’s handhelds in place of their rivals or to switch most of their game buying to the newer hardware. Nintendo may have privately singled out Apple as its only true threat in portable gaming where Sony is now strictly secondary.
Today I saw Jake Humphry who hosts the Formula 1 Grand Prix broadcasts for the BBC, holding an iPad on-air as he did interviews and kept the discussion going with his 2 colleagues. He was getting updates, notes and cues through it and he’d just take a quick glance at it as he gestured quite naturally while holding it. Better than an iPhone or netbook.
news, backstory, analysis and opinion for investors in AAPL at my blog relentless focus
As to need for an iPad, when did basic need determine product success? Did anybody “need” a flat screen TV, when they all had TVs already?
Funny story: I just visited some friends yesterday who won a flatscreen TV in a raffle. They’ve been trying to sell it in order to raise money for an iPad :D
(They don’t have another TV so I assume they’re finding the iPad more broadly useful)
I agree with your points. We just need to wait for applications to be developed for the device and push it into areas that no one has thought of. It will happen even faster than it did with the iPhone.
Roman’s story shows the pent-up demand for the iPad. :up:
One of the biggest misconceptions about the Apple iPad is that it is essentially a larger iPhone or iPod Touch (I?ve also heard the term ?iPhone on steroids? thrown around). This is simply not true: The iPad and iPhone are completely different beasts when it comes to hardware, software, and what you can do on each device. That said, the two devices do can perform a lot of the same functions: Both allow you to play games, browse the Web, send e-mail, watch videos, and listen to music.
(Next time you plagiarize PCWorld (Ginny Mies) or anybody else just to post your spam link you will be banned. -intruder)[ Edited: 21 May 2010 03:50 PM by Intruder ]