9 Comments

Summary:

Today, when you walk into a typical Apple store, you see clear demarcation of Apple’s two major product lines – computers & entertainment devices – which creates a brilliant retail experience. With the the iPad, I wonder, how will Apple re-organize this brilliant retail experience.

A few weeks ago, Apple decided to start taking pre-orders for its widely anticipated iPad. It’s one of those devices that, if successful, will redefine the computing landscape — much like its lil’ cousin, the iPhone. But there is an equal chance that the world may not be impressed with its brilliance.

Given how excited I’ve been about the device, many of my friends (and colleagues) are wondering why I didn’t order one. The answer is pretty simple: I want to write about the iPad launch from the point of view of a retail buyer. I plan to head over to the Apple store in San Francisco’s Union Square area on Saturday, stand in a line and see if I can actually get my hands on one that way.

Though what I really want to see is how Apple re-organizes its retail experience to fit the iPad. Right now, when you walk into a typical Apple store in the U.S., you get a pretty binary experience: Macs on one side of the store and iPhone/iPods on the other. Apple has used this clear demarcation of its two major product lines — computers and entertainment devices — to create a brilliant retail experience.

And soon it will add to the mix the iPad — which is not quite an iPhone and, well, definitely not a computer. So on which side of the aisle will Apple put this device? I think the retail display will pretty much define into which category the iPad falls. I’m hoping that it redesigns the stores entirely, carving out a whole new space for the iPad.

If it were up to me, I’d line up a single row of iPads, with their front and backs alternating. They’d be mounted on a transparent stand, so that from a distance it would look as though they (iPads) were floating in the air. Wishful thinking on my part, I know!

Morgan Stanley analyst Katy Huberty expects Apple to ship more than 6 million iPads this year, much higher than the consensus expectation of 3-4 million. She expects 2.5 million iPads to ship between March and May and about 750,000 more during the June quarter. Huberty points out that iPad suppliers are estimating that Apple will make between 8 and 10 million of these devices. She believes that a million iPads would mean about 25 extra cents a share in earnings for Apple.

I think Huberty might be underestimating the money-making potential of the iPad. Having played around with it for a whole 20 minutes, I can tell you that this device will make you spend money on content — apps or books or music or whatever — much more often than the iPhone, even though there will be a fewer iPads on the market. Given that Apple takes roughly 30 percent cut of sales, it could be another bonanza in the making for Apple.

Now back to waiting for the weekend!

Photos of Apple Store, Fifth Avenue, New York Courtesy of Apple Inc.

This article also appeared on BusinessWeek.com

You’re subscribed! If you like, you can update your settings

  1. How many of the same ad you going to put up today?

    Christ.

    1. I’m sure there are lots of netbook fanboy sites you would be happier at.

    2. James

      We have a sponsor which has done a site takeover which means it is one single ad vs multiple ads.

  2. Sanjay Maharaj Tuesday, March 30, 2010

    I personally think Apple will blow the projected 6 million ipad units. I agree that once you realize the value of the ipad, you will be downloading apps particulalry books and related contents

  3. Interesting — which “side” does the iPad go on? If either one, it’s probably a failure. If it’s somehow it’s own category, it will be successful.

    Anybody else think there will be pushback on iPad app prices? I wrote about this jokingly on my site because just 2 years ago who knew we could get Madden 2010 or iWorks for about $10 – $20. But, has the iPhone gotten us used to thinking that we should only have to pay about $1 – $5 for an app.

    1. I agree. I think in my opinion they should build a brand new retail experience to highlight why iPad is different. Anyway I don’t think they will be able to charge too much money for the Apps. I think between $1-to-$3 is the sweet spot and encourages a lot of random downloads. I see that is not going to change anytime soon.

      1. I have read surveys where respondents said that they want to do more browsing on iPads and I tend to agree with them. Simple/silly apps may not sell well on iPad. More useful and heavy apps will sell on iPad and these will tend to be more expensive. So, my bet is that the average price of apps that sell on iPad will be more than on iPhone or iPod touch.

  4. Quickthink » Blog Archive » Enter the IPad Wednesday, March 31, 2010

    [...] million IPads this  year (that is a 5 million spread). Om at Giga thinks it will be a big hit –  Here is a link to his [...]

Comments have been disabled for this post