28 Comments

Summary:

Even the most bullish estimates for iPad sales were not bullish enough. I saw a lot of iPads across a hugely diverse population on my vacation, and this year we’ll see Apple take steps to maintain its market lead and battle Samsung for tablet supremacy.

ipad-zaggmate-7

Even the most bullish estimates for iPad sales were not bullish enough. In the holiday quarter (which is Apple’s first quarter for fiscal 2011), the company sold 7.3 million iPads, bringing the total to about 15 million iPads sold for 2010. (GigaOM Pro had initially forecasted about 7 million sold for 2010 and we were on the higher end of the spectrum.) I am personally not surprised.

I fell in love with the device the minute I got my hands on it. It has become one of the most used devices in my arsenal right now, slowly and surely nudging my MacBook into the background. The proof of the growing popularity of the device came during my vacation in Miami.

When I boarded the flight from San Francisco airport, I could see at least dozen iPads in my immediate vicinity. Of course, one could argue that I was on a flight out of San Francisco, which is very tech-savvy; people would have iPads and other latest gizmos. But there were still an awful lot of iPads. On the flight back, it seemed one in three people getting on the Virgin America flight had the Apple tablet.

Instead of the laptops, it seemed everyone had decided that they could not leave home without the iPad. Sure, it makes perfect sense to take an iPad on a trip. First of all, airport security doesn’t make you take it out of the bag, it is lightweight and it has a small footprint when working on it between airline seats. I slipped mine in my Mulholland Brothers’ Tote Bag.

When walking down the funky South Beach, I spotted many folks walking around with their iPads. Admittedly these are not fiscally challenged tourists, but I was just surprised by the quite visible presence of iPads. At the Pritikin Longevity Center where I spent most of my days, many of the program attendees had iPads although most were neither young, nor tech savvy in classical sense.

I could see a couple of very senior citizens were reading their hometown papers every morning on their iPads. This slice of Miami represented a diverse demographic  —  men and women – young and old.

Most people I talked to had two major use cases — checking emails and using their favorite apps to find restaurants. Keeping up with news was another popular activity. I was quite surprised that not many were using it to read books, check out Netflix or listen to music. Of course, I introduced some of my new friends to Angry Birds.

For me it turned out to be the perfect device for the vacation – I read 12 books via the Kindle app, watched three movies and downloaded a season of Mad Men to watch on the device before tuning out the Internet. And when I got bored, I played Angry Birds.

Given the speed with which iPad has found acceptance, it is pretty clear to me that Apple isn’t done just yet. (iSuppli forecasts that Apple will sell 43.7 million iPads in 2011.)

Sure there is more competition and some folks like our own Kevin Tofel feel that they want smaller tablets, but the fact remains that for now Apple has momentum. Apple Chief Operating Officer Tim Cook said as much during the conference call with analysts earlier this month.

Apple’s early start gives the company a different kind of leverage – scale is allowing it to ensure smooth component supplies, something of a challenge for its competitors such as Motorola.

According to the Gartner Group research firm, in terms of dollars, Apple is the third largest chip buying equipment maker in the world after Hewlett Packard and Samsung: Apple snapped up $12.43 billion worth of chips in 2010. That’s about 65 percent higher than the $7.52 billion it spent on chips in 2009 when it was ranked as the No. 4 buyer.

That kind of purchasing power ensures Apple maintains an edge over its rivals, especially as supplies for products such as display components tighten. I guess the only company which is able to (and most likely will) compete with Apple effectively is Samsung, which has a vertically integrated supply chain – it makes chips, memory, displays and even owns manufacturing facilities to assemble devices.

It would be fun to see Samsung and Apple duke it out in the market place. I am looking forward to 2011, the year of the tablet.

Related content from GigaOM Pro (sub req’d):

  1. Interestingly, I find the iPad to be both too heavy and too small to really replace a book in bed (I do use it for reading emails, news and tech book pdfs – it’s best for all of those).

    If the 2011 iPad is significantly lighter, I’m ready to plunk down more of my cash to get it.

    1. But when you are traveling it is a pretty solid single device to carry. I think that is what makes iPad more useful. I think the weight is going to come down in time.

  2. Somebody doesn’t seem to like your observation.

    1. Haha. This somebody (aka me) and about 15 million others don’t seem to care ;-)

      1. But, but a significant (coin example) of users liked what we tested. The numbers proof it!

  3. PROMISE: We will regret the long term effects the iPad’s censored and form-factor-specific internet will have.

    There’s no patent on QWERTY for good reason.

  4. Apple redesigned and redefined the tablet market that Microsoft envisioned a decade ago. You are seeing Ipad’s everywhere now. You will see tablets (non Apple) everywhere by end of 2011. Developing countries like China and India are not going to adopt Ipads however they will quickly adopt cheaper tablet alternatives.
    Remember when you only saw IPhones for years now all of a sudden you are looking at Android phones everywhere. Apple is great at innovating however at the end their closed eco-system and high margin will once again come back and bite them in their A**. History does repeat itself.

    1. Different times, different markets, different Apple – Betting you’re wrong even if the competition can get components :-)

    2. I heard that happened to the iPod too.

  5. Ballmer’s Boyz Monday, January 24, 2011

    I don’t know about all those iPads. I’m pretty sure that most of the world is still using Windows netbooks as their main mobile device after smartphones. The Windows netbook runs the best desktop OS in the world and costs about one-third the price of an iPad. The world loves cheap products and the netbook is one of the cheapest computing devices in the world. A Windows netbook does everything, including running the backbone plug-in of the the entire internet, Adobe Flash. A Windows netbook even comes with a keyboard which no serious computer user can do without.

    Apple iPad users are now called “hipsters” which is a derogatory term for Apple iSheep with more money than brains. Ninety-eight percent of current consumers using iPads are really going to enjoy the next wave of Windows Slates that Microsoft will be seeding to the smart consumer. Every Windows Slate will come with a stylus to boost productivity 1000% over iPad apps. The iPad user of today will be the Windows Slate user of tomorrow. In theory, Microsoft Windows is already winning the tablet race without one actual tablet product. Go, Microsoft.

    1. Never expected a Microsoft ad here….good try microsoftf, but only mr. Bakker will be aiding up to get one

    2. Really? C’mon, you can’t really believe that can you?

    3. Microsoft is junk. Desktop, servers, phones and tablets.

    4. “Ninety-eight percent of current consumers using iPads are really going to enjoy the next wave of Windows Slates that Microsoft will be seeding to the smart consumer. Every Windows Slate will come with a stylus to boost productivity 1000% over iPad apps. The iPad user of today will be the Windows Slate user of tomorrow. In theory, Microsoft Windows is already winning the tablet race without one actual tablet product. ”

      What a scream! Thanks, I needed a good laugh today:)

    5. Top trolling, mate! You’ve caught quite a few fish who really should know better.

      As for the iPad… yeah, let’s see what Q1 brings and if it’s more iPod Touch (i.e. mainly gift market with a seasonal spike) or iPhone (increasing growth curve over time).

      It’s nice bit of kit though.

  6. @Mo Hasan
    There are plenty of other computer manufacturers and yet Apple makes a good deal of money selling computers without having to be the largest computer manufacturer. Why should they have to be the largest tablet seller to be a valid competitor in the space? Closed systems (vertically integrated) are working just fine for Apple.

    @Ballmer’s Boyz
    Being insulting doesn’t improve your point.

    1. @slaws
      Apple will continue to be successful in the next couple of years. With all their cash and humongous market cap they are not going anywhere. However I believe Apple has reached their peak. In order to maintain the high expectations of the stock market and increased competition from HTC, Google, Microsoft etc they will have a hard time keeping up with the kind of margins they have been pulling off. At the end of the day it is all about global market share in the personal computing space. The horrendous working conditions of Foxconn (their manufacturing partner) is not going to help their cause either. Have you heard the latest? http://abcnews.go.com/Technology/man-show-spins-story-steve-jobs-genius-shocking/story?id=12743763.

      P.S. Still love my Iphone. Just stating the facts. No haters please.

      1. Stating Facts? Where?

      2. @PXLated. Global PC market share. Global mobile market share. Oh wait for it.
        .
        ..

        http://lmgtfy.com/

      3. Old facts don’t equate to your suppositions

  7. So much foolishness from people who think Apple must be Chevrolet or Toyota to be successful over time.

    How long has Mercedes been around?

    1. @eidard
      Auto industry has progressed at a snail’s pace. Look out your window do you see any flying cars? Mercedes survived because there were limited players and little innovation in that industry in the past 50 years. Tech industry on the other hand is progressing at break neck speed which makes it very hard for a limited premium market share company like Apple’s to survive in the long haul. Don’t believe me look at Android. It has literally killed Iphone’s smart phone market domination in less then a year. Next stop tablets.

      eideard. How many people know who is the current CEO of Mercedes? Do you? How about Apple’s CEO?. I bet everybody knows the answer to that. Steve Job totalitarian regime has a very high risk factor for a public company. Steve Job himself and his health. Do you think Apple can survive without Steve? I don’t.

      P.S. Love you Apple. Love you Iphone. Just stating the facts. My tip for you Apple. Diversify. There is a greater pie in the sky called “enterprise”. Tap into it. Consumer smucks like me will leave you in a heart beat but enterprises make better long last partners. Can I get a Amen. …A-hem…Microsoft…Oracle…IBM.

      Sorry about my foolish banter eideard.

  8. 15 million? that’s it? you would think more Apple fans would get it

  9. Just got back from a cruise last weekend. My father in law brought his iPad – he played games on it and we all checked our email when we pulled into San Juan. 3 of his 4 daughters had iPad touches + 1 friend had an iPhone 4.

    I saw a several iPads on the ship, but that number was eclipsed by mostly kindles and other ereaders.

    The irony is that I convinced my wife, pre marriage, in ’02 to go mac. She’s on her second mac laptop since then and doesn’t own any other mac products. I left my iPod classic on the plane (while trying to keep a 2 yr old from screaming) and probably won’t replace it with an Apple product – yet while I consider myself to have historied support of apple products, I’m not convinced that their products are necessarily the best value anymore for non-mobile people (like parents).

  10. For real! The iPad’s battery, more than anything else, is what makes it so darn magical. That and flash memory. You can carry a bookshelf in your hands from LA to JFK no problem.

Comments have been disabled for this post