Will the iPad become an instant success story for Apple
A short note on the upcoming launch of the iPad in April:
The imminent launch of the much hyped iPad by Apple – scheduled for the beginning of April – is giving rise to much speculation about what its ultimate success in the market will be. Projections range between 2m and 10m units to be sold in 2010. In comparison the iPhone sold 4.7m units in the first three quarters of 2009. Apple is of course eagerly driving the hype before launch, last weekend delaying the shipment date to outlets to April 12th, although customers that have already ordered devices will still take delivery on April 4th. This announcement resulted in analysts speculating that the expected demand for iPads outstripped that for the iPhone, immediately driving Apple stock to an all time high of $236.80 at the end of March.
All the hype aside, however, and there are significant arguments against the iPad matching the success if its predecessor, at least in the first years:
- Unlike the iPhone, a device with a clearly understood functionality, the purpose of the iPad will remain unclear to most users, at least at first. It is a device which is clearly the first of its type – a computer larger than an iPhone but less powerful than a laptop.
- Similarly, the exact target audience is rather vague. At first glance it appears to be aimed at consumers who will use it during “down-time” – basically people at home on the couch who might be surfing the internet or reading a book. At this point it is fair to suggest that the iPad won’t significantly change user behaviour.
- As with the above points, the choices that users will make when leaving the house – whether to take their phone only or whether to take an iPad/laptop, might not be considerably effected. Other than the convenience of reading from an iPad on bus or train users might struggle to understand the real difference between a laptop and an iPad.
- Unlike the iPhone, the iPad will not be an attractive product for MNOs to market. The iPad will be able to connect to the internet through Wifi, and Wifi customers are not particularly attractive customers for MNOs. The iPAd will need to find other channels to market.
- The price of the iPad will range between $499 and $829, and most devices will be sold unsubsidized. Even though many people may wish to purchase the iPad, the fact that they will already have a smartphone and laptop will in many cases make the cost prohibitive and the device therefore extraneous to their immediate needs.
Make no mistake, the iPad is a very interesting and exciting new product – it offers users such a wide range of possibilities: browse the web; send e-mail; listen to music; watch videos; play games; read electronic books; use applications – but it is an all-rounder that is yet to find its market. This might happen eventually, but is likely to take longer than expected. Hence, if the iPad sells 5m units this year, which represents almost the number of what the iPhone sold in 2009, it would be a success.
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