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The iPad: Apple's Next Gold Rush

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Related GigaOM Pro Research Report (sub req’d): Forecast: Tablet App Sales to Hit $8B by 2015

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63 Responses to “The iPad: Apple's Next Gold Rush”

  1. I couldn’t help it. I couldn’t decide, so I pre-ordered one each of the three RAM complements with G3. Stopped at Best Buy to look at the newly-arrived WiFi ones Saturday. Bought one of each. So I will have six iPads after the FedEx guy leaves in a couple of days. I have a Kindle 1,2, and DX also.

  2. Paul Calento

    Apple is creating new markets … and even volume purchasers (probably a secondary market for a consumer device) are interested. Today, Seton Hall announced that they’re issuing iPads (and Macbooks) to all incoming freshmen ( New use cases and market opps will probably pop up within days of the April 3rd launch.

  3. Om, even for you this is preposterous. To many joe blow consumers in the world these days to even remotely fall for this less is more steaming pile of underwhelming hardware. That alone kills off the 120 mil possibility and Im not even going to get into the evolving censorship mess with the app store approach.

    They may hit 120 mil in sales if they can make them break often enough to convince gullible america to fork over money for new ones. Which ironically is their business model anyway isnt it? Pishaw, (tosses this brick on the macTV heap)

  4. judson

    In 2 years the desktop will be dead. Apple is creating a new metaphor for ui’s. They (Apple) are transforming into a consumer electronics company for the 21st century.

  5. yasser khan

    i believe it, im thinking about selling my macbook and using the ipad as my mobile computer since i have a desktop at home. i dont need anything really high powered for the road. email, keynote, office, music, video. i think a lot of people will consider doing the same especially as second 3rd generations come out

  6. ddorent
    1. On the cumulative sales figures.
      Newly purchased iPods are often, if not entirely, come at the expense of an old iPod.
      It will be the case with the ipad.
      Obviously, it is wrong to project app store revenue as if every cumulative ipad sold count as an app buyer.

    2. On iPad’s sales projection. its totally off.
      Unlike the iphone, The ipad will have sever competition from the very start.
      Cheap eReaders on the one hand, More capable windows 7 tablets on the other hand.
      More over, Michael wolf, the GIGA OM analyst, has mentioned gaming on the iPad as one of the reasons for it’s ridicules growth projection.
      Its true but only at the short run. As xBox live integration into the windows phone 7 will be huge and will dwarf the iPad, and eventually even iPhone mobile gaming marketshare.

    the iPad will be a flop. this giga om post is ridicules.

    • Will all you who can’s see why this will change things cry into your huge pillows when it succeeds? Or will make some excuse like “Steve Jobs has mind control”. You probably thought cell phones had limited uses when they came out. Right?

    • @ddorent – What makes you think I wouldn’t factor in churn? :)

      My app forecast looks at only active installed base, not total cumulative sales, when forecasting app store revenue. That’s forecasting 101 :)

      I couldn’t disagree with you on point 2. The iPhone faced RIM, Nokia, others in the smartphone market, which was already a tens of million unit market. the iPad faces no real volume competition in the tablet space.

      And Xbox Live is a great differentiator for Microsoft in gaming, but its carryover on phones is not going to as significant as you’re predicting. In a social gaming, app-store world, Xbox Live (which I am a big fan of, btw) is not as relevant. Most casual games are going social, and app stores are becoming the new storefront and discovery mechanism for gaming.

  7. PhilNoir

    Sorry, Om, but those are crappy sources. As far as I can tell, the 240,000 figure came from something called Investor’s Village, which is tracking “order numbers submitted by volunteers,” though we have no idea if the order numbers track sequentially. Wall Street Journal breezily said orders were in “the hundred of thousands” with no supporting documentation. I don’t need say anything about Engadget, do I? And yes, I’ll be in line on Sutter Street to pick up my iPad on Saturday.

  8. hehehe guess someone is being paid by apple to do some fuzz!
    the ipad wont sell more than 10 millions and thats a optimistic prevision.
    netbooks are way better than this, at least you have full OS to run the software you want without paying for every new app

  9. As editors, aren’t you in the least concerned about your false pictoral representation of the iPad in this story? Your main graphic obviously misrepresents the bezel width as much narrower thanf the actual iPad.

    I prefer your fake photo to the actual iPad, but still, I don’t guess you want to have an Apple lawsuit on your hands.

  10. Chris K

    On the other hand I definitely see the potential of the Ipad. And that’s why I pre-ordered one.

    Couch surfer, document/book reader, paper saver and media player…

  11. Chris K

    I get nervous when too many peg it as a sure thing.

    And I am usually the one pointing out how Apple designs great products.

    Some big barriers to overcome though.

    As Albert said, the tablet is going to be #3 on the list behind a smartphone and computer. IS there even a market for it? Is there a market at a $500 pricepoint?

    And as for gaming it is never going to be the ultimate gaming machine when it lacks buttons, analog stick and dpad… And it could very well prove awkward to hold on the couch with one hand while simultaneously trying to tap the screen with the other.

    True book reading aficionados could very well find the screen too hard on the eyes.

    People that want to get work done could very well find the touchscreen too annoying and the software too limiting.

    Basically the thing could end up a $500 jack of all trades, master of none while also being 3rd on the list behind smartphones and a computer.

    • “. . . the tablet is going to be #3 on the list behind a smartphone and computer.”

      Or #2. The need for a smart phone goes way down if you have another device that does most of what it would do.

      The phone on the iPhone is was my least needed feature. There are advantages to having a separate phone, like never accidentally running the battery down while playing games. The GPS and and an (affordable) 3G connection are my most desired features for the iPod Touch. The screen size is screen size is more problematic. It makes the device far more usable, but at the expense of portability.

      Yes, a netbook does more, but it doesn’t do anything particularly well. At least not the Apire One that I have. Even typing, one of the biggest complaints about the iPad format, is a pain. My hands are not small. I’m betting, with real money no less, that what the iPad will do it will do well.

      Of course I’m not the typical user that most seem to be predicting. While the web and email are a big part of what I’ll do what really has me excited are the apps and books.

      I don’t expect to be productive, but I do like to keep track of things. Bento and Numbers look to be great portable data solutions. I’m also expecting that ToDo, or another decent GTD app will take advantage of the iPad’s bigger screen.

      I agree that the iPad is not the ultimate ebook reader. The battery life is less than optimum. Though I should point out that the 10 hrs that Apple specified was for video. Book reading, at least normal ebooks, should be somewhat less demanding. And I read for hours a day on a computer screen. For me at least, the lack of e-ink is only a power issue.

      What the iPad will have that other ebook readers don’t have is options. The Kindle is Amazon and some third party DRM free books. The Nook is the same with Barns and Noble. The iPad will have iBooks, Amazon, Barns and Noble, and other publishing options. At least for the moment it looks like iPad is the goto for content choice in ebook readers. And unlike the oft maligned masses I do like my books. I’m not much of a magazine reader anymore (my abode is too small to support the stacks of fire hazards), but that could change if publisher come even close to living their current hype.

      No matter how spiffy an ereader’s specs it is junk without content.

      Yes, pre-ordering an as yet to be proven 1st generation device in an unproven market is risky. But you know, most really fun things are just a little risky.

  12. Some of you say that Apple is solving a problem that people don’t know they have. If you have taken a basic marketing class, you will know that this is how some of the most popular products have come to be (microwave for example).

    Obviously Apple is doing something right if close to 500,000 of these devices have been pre-ordered before it has even come out. Look at the iPhone and iPod Touch. People have had negative thoughts about it since day 1. They have now sold over 75 million of them.

    My main point is that people can list all the “flaws” about this device that they want, but Apple is going to sell tens of millions of these.

    • Matt W.

      The PC makers – Dell, Sony, etc – would trade places with Apple in a heartbeat. Compare stock, growth outlook, customer affinity, technological influence & control, etc.

    • Looks like you haven’t written a line of code in your life.

      Try to write a transactional web app using only Html 5, CSS and JS. Then write the same app using Flash and compare the development times.

      This is the same reason Java is far more popular today than C++, even if C++ is more ‘performant’.

      I see that you fit into Apple’s target market very well :)

  13. Constable Odo

    I think the price of the iPad will have to drop before it gets the type of traction in numbers you’re talking about. There are far too many cheapsters in this world who refuse to pay more money no matter how good a product is. All those netbook users out there are basically buying into a very low-end platform to save a few pennies and therefore justifying it’s value. Apple would have to get the iPad’s price down to the $300 range to make the cheapsters feel they are getting close to their money’s worth. Maybe iPad refurbs will hit that price level by the beginning of next year when new iPad revisions are released.

    I think that Apple is going to have to compete against very cheap Android tablets the same as what the iPhone is running into. Low-priced Android tablets from dozens of Chinese companies literally flooding the tablet market. Some will be good, others will be junk. It won’t matter to the cheapsters as long as those tablets cost about $150-$200. Those companies will have poor customer support but it won’t matter. Low initial cost is the only thing that matters to these type of users. These tablets will easily outsell the iPad throughout the world, especially in the poorer countries. Cheap will always take market share from quality. Apple’s iPad will still make the most money from whatever market share it has.

    • Odo,

      More expensive does not always equal “better”, especially when it comes to Apple. Personally, I’m quite happy with my Android phone. It’s less expensive than the iPhone, I get great customer support and I don’t have Steve Jobs acting as my nanny telling me what apps I can and can’t install on my phone. Android tablets may well offer a similar experience for me.

      Why I Don’t Want An iPad

      • Steven

        Wow Tommy, way to miss the obvious. Netbooks don’t even have a touch screen, which is the primary feature of the iPad.

        Android only became a success after the iPhone, and is very similar in most ways. I’m a big Google fan, but there’s no way it would be as popular if Apple didn’t make the mistake of limiting iPhone to a SINGLE CARRIER in the US. That, and that alone is the main driver of Androids popularity. Nearly no one would have bought a Droid next to an iPhone.

    • What you’re forgetting is people are already paying this much for an iPhone, they just don’t know it. The iPad price is unsubsidized, but runs quite close to what free market prices(eBay) for latest generation iPhones these days. If people are falling all over themselves to buy iPhones at this price, I doubt they’ll have a tough time finding consumers. Per say the pricing is quite competitive with the Kindle or a decently equipped Netbook.

  14. if the iPad had Flash on it I would beleive the numbers but me and my friends wont buy this piece of hardware without having the full internet experience… its missing Flash and Steve Jobs is just lazy and greeedy

    • Matt W.

      Apple’s edge is in providing a superior user experience. If they fail do to that, they become just another ‘Sony’ making slightly more cool hardware than the rest. Pretty much everyone other than Apple has decided to pile on features and software they think people want, THEN (maybe) clean it up and polish it later. Slapping Flash onto a mobile device would be an example of this.

      IMO, Apple is not lazy – Adobe would do the engineering for free – Apple realizes that Flash movies would make it impossible to guarantee a quality user experience. All other HTML content says “here I am, here’s the idea of what I should look like”, allowing the renderer (Safari) to place it based on the user’s screen and other content. Flash says “I MUST have a footprint of X by Y, and I MUST NOT be shrunk, and what I do in there is my business – don’t ask and don’t tell”.

      Yes, it’s a tradeoff – people like you are pissed about a lack of Flash, but lots of other people are using iPhone’s, not missing Flash and – whether they realize it or not – enjoying a maintainably good user experience that would be impossible with Flash in the mix.

    • I’m actually glad it doesn’t have Flash. I think Flash is cumbersome and overrated, a tool for Web designers/developers who are too lazy or inexperienced to use HTML and CSS to code for modern Web browsers.

      As for Steve Jobs, he might be greedy, but he’s definitely NOT lazy. Apple will shake things up with the iPad. I’m looking forward to seeing how it all plays out over the next year or so.

  15. I simply love this new thing from Giga OM. The blog is getting better and better. Keep up the good work OM.

    I am also not surprised to see the statistics here considering the fact that Apple is going to be without competition for a long time just like iPhone. And every other year they will keep getting better and better.

  16. This is the kind of self fulfilling hype wheel that almost guarantees a success for Apple – and failure for any other new entrant – regardless of whether the product warrants it or not.

  17. Really?

    You think they are going to sell 100 Million+ iPads by 2015? That is the most ridiculous thing I have ever heard. 30 million iPads a year?

    I mean are you kidding me? Are you on this planet?

    • Ed

      120 million total iPads over six years = 20 million units a year.

      Just to compare >> 33.4 million Netbooks sold last year and about 40 million in 2010. The iPad sales are going to be single digit millions in 2010 and slowly grow.

    • In January 2010 Apple announced that since the iPhone was launched in June 2007 over 75 million iPhone OS devices (iPhones, iPod Touches) have been sold (probably several million more now).

      Apple sold about 9 million iPhones last quarter (3 months) representing a 100% unit increase from year ago quarter.

      For some quarters (e.g Christmas) it is estimated the iPod Touch is outselling the iPhone (so a no phone device can sell).

      Surveys show that buying interest for iPads is higher than the first iPhone.
      the 240,000 pre-order number doesn’t include reservations for in store pickups. Some estimate reservations equal pre-orders i.e perhaps 400,000 plus in total.

      Selling 20 million iPads a year in the future is optimistic but not impossible.

    • I am with you Ed.

      I don’t get all this bullish feeling about the iPad. People love notebooks because they are amazingly cheap little portable computers that offer similar functionality to their desktop/laptop counterparts, functionality that users are familiar with. I don’t see them at all in the same category as tablets.

      The iPhone has been tremendously successful because there was a huge void in terms of cellphone usability that Apple has been able to fulfill magnificently.

      But to me the iPad, is a solution to a problem that most people don’t know they have, if they have it. There are some serious red flags that people are ignoring. Apple seems to be touting this thing like something you are going to be able to do work on? Basic ergonomics of the device seem to indicate otherwise. When are we supposed to use the iPad? when we are in the couch, when we are travelling, when we are in .. the bathroom? the iPad is going to be competing with two existing devices in those areas, laptops/netbooks and cellphones.

      You will still need a laptop/netbook and a cellphone for sure, who will ‘need’ and iPad on top of the other two too? Some but not everybody. If Apple is successful luring those people who don’t regularly use computers to get an iPad Apple may be into something big, but that is a really big ‘If’

    • @Ed – I was the analyst who did the forecast, so a few points:

      First, the tablet market as whole will benefit from its ability to eat into many existing large-volume markets. The obvious ones are netbooks, e-readers, and – of course – the media player market (like the Apple Touch).

      Gaming is going to be very significant. I think Sony and Nintendo have to be extremely worried, as portable gaming volumes are already getting hit hard by the Touch, and I think we’ll see the iPad eat into that market in a big way.

      Built into my assumptions is also a believe Apple will reduce prices over time, which will significantly increase volumes as well.

      Again, it’s a cumulative number over a nearly six year period (end of 2015), so the numbers are entirely reasonable and overall, are significantly less than other high volume device markets such as the netbook market, and on par with shipment volumes from single vendors such as Nintendo with the DS, a device with a much narrower set of applications and, hence, total available market.

      • This is the first editorial I’ve read that I have to agree with. I can’t believe how many people are not seeing the big picture. I showed the Apple tours video to a number of neighbors and they flipped out and are now purchasing one.

        A friend of mine who is technologically challenged, and who I shopped with for his laptop two years ago, still to this day needs tech help. His main interest was web surfing and email. He saw the Apple video and within minutes he was convinced and said “now THIS is the way it should be – finally!”. When he saw the ibook demo, that put him over the edge.

        As for gaming, I totally agree. It may not catch on immediately with 360 crowd of young men who are obsessed with Call of Duty, but older gamers (who can afford another device) will certainly be “eying” the pad. Those who don’t own an iphone or itouch do not realize the game potential on this unit and think it’s only meant for casual games. Have you seen some of the touch/phone games that have come out this year? Now imagine what will be done on the ipad. This will be the ultimate machine to play RTS and RPGS on. What about two player games on opposite sides of the pad; There’s so much potential. I’ll be honest, I play with my iphone games more then my PS3. At my age, I have no time to memorize button layouts on a control pad, and feel the need to scream over a headset after a hard day of work (especially with a 12 year old on the other end).

        The ipad will have universal appeal – just like it has with its ipod/phone/touch.

      • Patrick


        You analysts are full of bull. You can’t predict what will happen next quarter let alone next five years. The blindfolded chicken has more chance of finding a corn seed on an acre than all of you analysts combined are capable of “predicting” the future.

        Analysts should leave the their jobs to proctologists and find a real job that is beneficial for the society (if they can find one that is).