iPad Cannibalization of Mac Sales

  • Posted: 07 March 2011 10:33 PM #61

    Mav - 07 March 2011 11:38 PM

    I’d be especially interested in how many iPad owners don’t yet have an iPhone.  It may be a modest number, but iPad + smartphone combo owners who don’t have an iPhone for whatever reason may be reconsidering in droves.

    The entry-level iPad specifically addresses the customer tier that’s interested in an ebook reader and other content but is wary of a data fee. You might be surprised by the number of iPad owners that don’t have an iPhone or other smartphone. We might all be pleasantly surprised by the number of iPhones that are sold to customers who with an iPad. Ultimately the big score is when these customers migrate to the Mac.

         
  • Posted: 07 March 2011 11:47 PM #62

    FalKirk - 07 March 2011 10:39 PM
    BillH - 07 March 2011 05:30 PM

    The iPad is the product that finally made the light bulb go on for the silent majority.  Up until then they could rationalize that a desktop was a desktop or a laptop from Dell was roughly equivalent to a Macbook.  The difference between an iPhone and a Blackberry was not understood by many at the beginning.  The iPad as a concept was easily grasped and their was nothing like it anywhere but Apple.  Capitulation is taking hold.  It’s a beautiful thing.

    A great point. A seriously great point.

    Thanks Falkirk.  It would have been even more coherent if I could get that their/there thing right.  :(  One other megatrend that is seriously working in our favor is the focus that consumers have on these types of products.  When I was growing up we were all focused on audio equipment which segued to cars and then homes and then kids.  The younger generation isn’t nearly as obsessed with audio or cars the way we were and seem to devote a great deal of their disposable income to all things Apple.  Likewise their parents are retiring and leaving the iT department behind and in many if not most cases abandoning Windows and it’s security/administrative issues behind.  It will be interesting to see if the mid 30’s to mid 50’s follow along.  I wish we had some demographic data of how sales split out by age group per device.

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    Posted: 08 March 2011 12:03 AM #63

    How long after the March 11th iOS 4.3 update before we see an apple iphone 4 + ipad 2 ad? (Where its showing the wifi ipad using the iphone wifi hotspot internet connection.)

    Or would this non-plus the carriers too much?

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  • Posted: 08 March 2011 12:05 AM #64

    iOSWeekly - 08 March 2011 04:03 AM

    How long after the March 11th iOS 4.3 update before we see an apple iphone 4 + ipad 2 ad? (Where its showing the wifi ipad using the iphone wifi hotspot internet connection.)

    Or would this non-plus the carriers too much?

    It’s also a complicated message in a 30 second spot in which Apple wants to keeps things elegant and simple.

         
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    Posted: 08 March 2011 12:57 AM #65

    BillH - 08 March 2011 03:47 AM

    ...their parents are retiring and leaving the iT department behind and in many if not most cases abandoning Windows and it’s security/administrative issues behind.

    I wasn’t sure in which thread this would best fit, but Bill’s comment about security sorta kinda touches on this.

    The Android Market allows people to remotely install new apps on to their Android smartphones while browsing the site on their desktop computers.

    “While being able to browse the Android market via your browser on your desktop and push apps to your device is a great win for user experience, it opens up a dangerous attack vector. Any XSS vulnerabilities in the Web market allow an attacker to force your browser into making a ‘Post’ request that triggers an app installation to your phone,” Oberheide wrote. “Since there is no on-device prompt or confirmation for these ‘Install_Asset’ requests pushed to your phone, an attacker can silently trigger a malicious app install simply by tricking a victim into clicking a link while logged in to their Google account on their desktop or on their phone. The malicious app delivered to the victim’s phone can use any and all Android permissions, allowing for all sorts of evil behavior.”

    Let’s see if I can connect this to Mac sales.

    I assume most of the millions of Android users are also Windows users. If this security issue recurs, some of these people could become wary of both the Android Market and the PCs they access it with. The obvious solution would be to buy an iPhone and a Mac.

    Do Windows & Android deserve a Mac halo for this?

    *Sorry, DT. I’ll get back in the cat herd now.*

         
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    Posted: 08 March 2011 02:00 AM #66

    AT - I could be completely wrong on this, but I think DT is actually making a “short-term” comment.  As in, an iPhone/iPad purchase for a PC user may soon lead to said PC user making the biggest purchase not long down the road by moving to Mac.  A Mac sale sure helps with the quarterly numbers (just like them VeriPhones, DT! wink)

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  • Posted: 08 March 2011 02:20 AM #67

    adamthompson3232 - 08 March 2011 04:29 AM
    DawnTreader - 08 March 2011 02:33 AM
    Mav - 07 March 2011 11:38 PM

    I’d be especially interested in how many iPad owners don’t yet have an iPhone.  It may be a modest number, but iPad + smartphone combo owners who don’t have an iPhone for whatever reason may be reconsidering in droves.

    The entry-level iPad specifically addresses the customer tier that’s interested in an ebook reader and other content but is wary of a data fee. You might be surprised by the number of iPad owners that don’t have an iPhone or other smartphone. We might all be pleasantly surprised by the number of iPhones that are sold to customers who with an iPad. Ultimately the big score is when these customers migrate to the Mac.

    DT,

    I agree with you to a certain extent as the Mac has Apple’s highest ASP. However, isn’t the value of converting someone to the iPhone ultimately more profitable than converting them to the Mac (obviously it would be ideal to do both)?. The reasons I suggest this are higher margins on iPhone and more rapid refresh cycle. I think I read something from Deagol or Asymco that average phone refresh is 18 months. If Mac refresh is roughly 3 years the iPhone is far more valuable than Mac due to the higher margins. Of course, this example is contingent upon repeat iPhone purchases which may not always be the case even though I do think iPhone is the stickiest phone on the Earth.

    Just my two cents. And as I mentioned, it is of course ideal to convert as many people as possible to both Mac and iPhone and the halo effect of all Apple products makes such a scenario very, very common.

    at, when a consumer buys a Mac it changes their perspective on personal technology as well as their future technology buying habits. The PC era is over (or as I say it the PC-centric era is over). When a consumer “completes the circuit” and becomes a Mac, iPhone and iPad owner Apple has a customer for the next several years with bi-annual iPhone upgrades and most likely an iPad upgrade cycle as well. The Mac is at the center of the digital life with the iPhone and iPad playing important and mutually supporting roles.

    Look at it this way: iPhone owners may use a variety of PCs. But how many Mac owners do you think move outside the Apple product environment and embrace other branded devices when an Apple product is available for purchase?

         
  • Posted: 08 March 2011 02:31 AM #68

    adamthompson3232 - 08 March 2011 06:25 AM
    Mav - 08 March 2011 06:00 AM

    AT - I could be completely wrong on this, but I think DT is actually making a “short-term” comment.  As in, an iPhone/iPad purchase for a PC user may soon lead to said PC user making the biggest purchase not long down the road by moving to Mac.  A Mac sale sure helps with the quarterly numbers (just like them VeriPhones, DT! wink)

    Makes sense to me. It’s just incredible to me how many explosive product lines Apple has going right now. Sure, you can put all their products on a single coffee table. But that one coffee table would include a few of the best selling consumer products of all time. Most companies can only dream of having one mega hit product. Apple is currently in the early stages of 3 (iPhone, iPad, and MBA) with many other incredible products (MBP, iMac, ATV, etc…) nipping at their heels. Has Apple (or any other company in the history of the world) ever been firing on all cylinders like Apple is right now?

    You can also buy all of those products (an iMac, iPad and iPhone on a subsidized contract with money left to cover the monthly contract fee) for the same amount of money in non-inflation adjusted terms I spent on a Mac and Apple printer in 1987.

         
  • Posted: 08 March 2011 02:32 AM #69

    Mav - 08 March 2011 06:00 AM

    AT - I could be completely wrong on this, but I think DT is actually making a “short-term” comment.  As in, an iPhone/iPad purchase for a PC user may soon lead to said PC user making the biggest purchase not long down the road by moving to Mac.  A Mac sale sure helps with the quarterly numbers (just like them VeriPhones, DT! wink)

    Give me the net increase in domestic iPhone units sold, not the number of units Verizon sold.  grin

         
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    Posted: 08 March 2011 02:42 AM #70

    DawnTreader - 08 March 2011 06:32 AM
    Mav - 08 March 2011 06:00 AM

    AT - I could be completely wrong on this, but I think DT is actually making a “short-term” comment.  As in, an iPhone/iPad purchase for a PC user may soon lead to said PC user making the biggest purchase not long down the road by moving to Mac.  A Mac sale sure helps with the quarterly numbers (just like them VeriPhones, DT! wink)

    Give me the net increase in domestic iPhone units sold, not the number of units Verizon sold.  grin

    Trick question!  Unknowable answer!

    But c’mon.  You and I both know for this quarter, it’s almost 100% incremental.  I’ve gone over why before in other posts.  I say a net add of at least 2.2 million iPhones.

    It’s a “cheap trick” of sorts, more of a nitro boost than refilling the tank, but thanks to the veteran iPhone 4, Verizon will play a significant role in what I think will be the highest iPhone sales quarter ever, by quite a margin.

    [ Edited: 08 March 2011 02:46 AM by Mav ]

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    Posted: 08 March 2011 02:44 AM #71

    adamthompson3232 - 08 March 2011 06:37 AM

    Does anyone see Apple’s long-term (1-3 years) GM % expanding even if ASPs on some, or most, product lines come down a bit? I do.

    It’s a safe bet, if you think about it from one point of view:  Continued explosive iPhone growth making the margin mix richer.  The unknown:  What exactly iPad margins are.  I will say this, the longer Apple “gets away with” $130 surcharges for cel data connectivity (and we all know so much of that is sweet, sweet profit), the better iPad margins will become over time.

    [ Edited: 08 March 2011 02:46 AM by Mav ]

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    Posted: 08 March 2011 04:51 AM #72

    Mav - 08 March 2011 06:44 AM
    adamthompson3232 - 08 March 2011 06:37 AM

    Does anyone see Apple’s long-term (1-3 years) GM % expanding even if ASPs on some, or most, product lines come down a bit? I do.

    It’s a safe bet, if you think about it from one point of view:  Continued explosive iPhone growth making the margin mix richer.  The unknown:  What exactly iPad margins are.  I will say this, the longer Apple “gets away with” $130 surcharges for cel data connectivity (and we all know so much of that is sweet, sweet profit), the better iPad margins will become over time.

    I think the $130 price point for the data connectivity is a interesting thing, it’s most likely a result of marketing necessity more than anything.

    Apple has chosen a $100 difference between capacity levels ($499, $599 & $699), and due to a psychologically proven consumer choice phenomenon - apple had no choice but to price the cell data upgrade at least $20-$40 away from those price points, either more or less, to avoid buyer confusion and potential non-consumption.

    I don’t think we will see a reduction in that $130 rate, unless it drops by $60 to the $70 price point to avoid being near the wifi only models price. And I can’t see apple doing that unless it sees credible, shipping in volume competition with built in 3G arrive at close to the wifi-only ipad price points.

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    Posted: 08 March 2011 10:33 AM #73

    iOSWeekly - 08 March 2011 08:51 AM
    Mav - 08 March 2011 06:44 AM
    adamthompson3232 - 08 March 2011 06:37 AM

    Does anyone see Apple’s long-term (1-3 years) GM % expanding even if ASPs on some, or most, product lines come down a bit? I do.

    It’s a safe bet, if you think about it from one point of view:  Continued explosive iPhone growth making the margin mix richer.  The unknown:  What exactly iPad margins are.  I will say this, the longer Apple “gets away with” $130 surcharges for cel data connectivity (and we all know so much of that is sweet, sweet profit), the better iPad margins will become over time.

    I think the $130 price point for the data connectivity is a interesting thing, it’s most likely a result of marketing necessity more than anything.

    Apple has chosen a $100 difference between capacity levels ($499, $599 & $699), and due to a psychologically proven consumer choice phenomenon - apple had no choice but to price the cell data upgrade at least $20-$40 away from those price points, either more or less, to avoid buyer confusion and potential non-consumption.

    I don’t think we will see a reduction in that $130 rate, unless it drops by $60 to the $70 price point to avoid being near the wifi only models price. And I can’t see apple doing that unless it sees credible, shipping in volume competition with built in 3G arrive at close to the wifi-only ipad price points.

    Agree, also the folks likely to ask for 3G are more willing to pay the difference for the added mobility.  One new issue is the $20 per month hotspot plan.  If ATT or Verizon were ever to go month to month it would make the 3G units less attractive for many smartphone users.

    I think the days of the $100 price point based on flash are numbered.  If NAND trends as expected we should get to $1 per GB in the 2nd half of this year and most. folks don’t need 128GB of memory in a tablet especially with streaming and the cloud gaining ground.

         
  • Posted: 08 March 2011 01:53 PM #74

    This thread is about the cannibalization of Mac sales. Gigaom has a nice piece on why “The MacBook Air Succeeds as Apple?s Post-PC PC” here.

    Apple?s redesigned MacBook Air is selling very well…having reached 1.1 million units shipped in its first quarter of availability. That would make the new MacBook Air one of the most successful Mac launches of all time.

    The MacBook Air may not be a tablet or a smartphone, but it might actually be more post-PC than any of these other devices, including the iPad. Plus, it stands as the best possible bridge available to help make the transition from PC to post-PC as painless as possible.

    ...it uses all-flash storage, has no built-in optical drive and the vast majority of its hardware design details were dictated by the need for portability, instant on, and battery life. Often, the MacBook Air capably stands in for or excels at tasks for which one might otherwise use a tablet.

    As with the iPad, the MacBook Air is less about what it?s made up of and more about what you can do with it.

    ...according to Jobs? articulation of what constitutes a post-PC device, (the MacBook Air) fits in much more comfortably with the iPad and the iPhone.

         
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    Posted: 08 March 2011 02:18 PM #75

    Sidenote:  Again, I am endlessly amused by sales and GM statistics for individual Apple products being thrown around like fact.

    You know Apple’s GM.  You also know the unit sales and revs of iPhone, iPad, total iPod (with some granularity), Mac by desktop/laptop, AppleTV, etc.

    You do NOT know how many MacBook Airs were sold in a quarter.  Wanna cite estimates/rumors, fine.  But please stop pretending like you actually know the true answer.

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