18 Comments

Summary:

One analyst this week that Apple will ship between 45 and 48 million iPads in 2011. That’s a number that would a require some extraordinary shifts and macro-events in order to happen, and Apple needs much more than just the next-generation device to meet that figure.

ipad

Last week, analyst Brian Blair predicted that Apple would ship 45 to 48 million iPads next year, based in his check of the supply chain and the demand an iPad 2 would create. But as I discuss in my column at GigaOM Pro (subscription req’d), given what that number would require both from Apple and consumers, is such a number simply too high?

Below, I examine three ways in which the world would have to be different to reach a 48 million iPad market in 2011.

Near Complete Obliteration of the Netbook Category

Most people realize at this point that tablets are cannibalizing netbooks, but for their part, netbooks have held up OK in 2010. Today, estimates for netbook shipments in 2010 range from 30 to 36 million in 2010.

However, with some predicting netbooks to reach 35 to 45 million unit market next year, it’s hard to fathom a 48 million iPad market at that level. Instead of flat sales for netbooks, a 48 million iPad market would probably look something like this:

That’s what near obliteration of the netbook market would look like. Can it happen? Sure, but it probably won’t, at least not that quickly.

A Sub-$500 iPad.

While there has been lots of speculation lately about a 7-inch iPad, Steve Jobs’ recent comments on the topic should put those rumors to rest. This means a lower-priced iPad (starting at $500) probably won’t come anytime soon.

Why would the iPad need to have a sub-$500 model? Simply, because while people love Apple products, there is still such a thing as price sensitivity, and to reach the wider audience that 48 million iPads would require would, at least in 2011, require a lower price.

Android Tablets Bomb

The invasion of the Android tablets is set to begin, and while most of us predict the iPad will continue to hold the market leader position, there’s no doubt that some potential tablet customers would opt for an Android based device.

So can Apple do it?  For a company that continually exceeds expectations, 48 million iPads can’t be ruled out entirely, but such lofty numbers require too many things outside of Apple’s control (such as a disappointing crop of Android tablets) as well as those within (such as dropping the price of the iPad) to be likely.

Read the full post here.

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  1. 45-48 million seems a bit high, but I could easily see a number over 30 million for a couple reasons. I’d say much of the reason netbooks will still sell in large numbers, is cause they are considerably cheaper than the iPad. I think we will see a $300-400 iPad next year. Apple always lowers prices after a year of a product being on the market. They aren’t going to cut the price too much more than that, because it’s selling better than the iPhone did initially, and most people don’t want another contract. I don’t think Android is going to outsell the iPad the way it did the iPhone, simply because Apple’s being a lot more aggressive with distribution, and competitors are struggling to match the price. The iPhone initially was only available at Apple and AT&T stores. There’s also less of a carrier issue with the iPad, cause it’s largely a WiFi device.

    1. @ashwinkn – if Apple releases a lower-priced iPad, it would stimulate demand in a huge way. I am a bit skeptical that they will, but if they do, I agree that the higher-range estimates for shipments are achievable.

      1. I can’t see Apple doing anything on price while the competition is having trouble matching the iPad price even with smaller size screens. And, has Apple ever really lowered prices, don’t they usually just add more features for the same price?

  2. The replacement of netbook is just one component of the ipad story. No one with a laptop wants a netbook, but plenty of people with laptops (both business users and consumers) want the ipad too because it is used a little differently.

    Interestingly, the drivers for the use of the ipad in the enterprise is coming from decision makers in the enterprise even though many of them don’t have a business case, at least not yet.

    1. @Daniel – agreed, netbooks are only one part of the story. I would disagree w/you on whether laptop owners want netbooks – most netbook owners I know have a laptop and bought a netbook because they thought it was either a better travel-machine or wanted a small form factor device for simple web surfing and used their laptop for heavier-duty work.

      I do think we’ll see fairly large adoption of tablets in the enterprise, but it won’t likely be from information workers doing spreadsheets, but probably for those who are in the field (salespeople) or those focused on specific functions where a tablet would be good with a customized interface (dock, warehouse, etc).

      1. “most netbook owners I know have a laptop and bought a netbook”
        Geeks?

      2. @PXlated – no, not geeks. Business travellers, some in tech, some not.

        Another big market for netbooks is in families who want a cheap second computer. Many of these have laptops as well.

      3. Hmmm – Go to quite a few tech get togethers/seminars and I think I’ve maybe seen a half dozen netbooks at most – Mpls area. I’ve seen way more iPads both in tech and the coffee shops.

      4. @PXLated – tech conferences are high-income, early adopter haunts. Starbucks are high-income, early adopter and status-conscious haunts. Not surprised you’d see more in these locations iPads since, well, all of these are the primary demographic characteristics of iPad adopters at this early stage.

        Seeing more iPads in public isn’t indicative of the likelihood that someone may have a netbook, or a laptop and netbook, or all three.

      5. Well, they’re invisible I guess :-)

  3. Eddie Dillinger Monday, November 8, 2010

    As long as the iPad continues to sell in an upward momentum I see no reason that Apple would lower the price. The price premium of an Apple product is part of it’s allure, like carrying the signature item of the world’s affluent and technologically elite.

  4. I have a post on my website regarding this same subject. Here is a portion of it.

    “Analyst are predicting that 54.4 million tablets will be sold in 2011 with Apple iPads been around 36.5 million of those. One of Apple competitors ViewSonic put those number at 45 millions tablet sold and 22.5 millions of those been iPads. ”

    So the lower number still a staggering 22.5 millions and the highest number been the one reported here at 48 million. Their is a huge gap between both but still a huge number no matter what the scenario for a gadget most were predicting will be flop and even mocked.

  5. For Apple to sell 48 million iPads would mean the iPad has to accomplish what the iPhone was unable to do, stop Android.

    The iPhone had a tremendous lead and yet within a year of the Droid being released, Android has overtaken the iPhone in sales trends and soon in total sales numbers as well. The iPad being available in only one form factor and with very limited external support can’t hope to ward off Android tablets.

    The iPad looks great now because all the real competition hasn’t yet hit the market. That will happen soon enough.

  6. I agree that the iPad’s popularity is mainly due to Android not being in the game yet, but I imagine in another year or so Anroid and other companies will be able to leach enough of Apple’s innovations that they too can join the tablet market and then pass off all of Apple’s ideas and innovations as their own.

  7. I am 38. I never bought a computer for the house until 2003. My wife or I had a laptop from work if we ever needed a computer for home. Plus back think the idea of getting on a computer after 9-10 hour days at work was not appealing. Then I got a desktop in 2003. My wife stopped working back then.
    She took the reading stuff on the net back in 2007ish. So I bought a laptop so she could be more mobile around the house. Then we saw a netbook for $299. I was like heck I will give it a shot for just $299. Now she was even more mobile. But you still had the boot-up time and all the fun that goes with a PC. Plus typing on the thing wasn’t much fun, even though we don’t do much producing of material at home. But with having children at home an extra computer can come in handy.
    Then I bought an IPad this summer. It is the perfect device for what we use it for. Surfing, games and light email. Works great super portable with a great battery. Ease of use.
    To me an IPad never will replace a computer/laptop, but it is handy as ever. I never would have bought the netbook had the IPad been around first.
    I did pry it from my wife’s hand last week and brought it to swim practice with me. The kids there were drawn to it like moths to light. A laptop or netbook would have not done that.

  8. Chad Sakonchick Tuesday, November 9, 2010

    Did I miss something?

    “This means a lower-priced iPad (starting at $500) probably won’t come anytime soon.”

    iPads already start at $499, so there goes that argument.

    1. @Chad – we analysts like to round up :)

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