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According to Revenue Estimates, Apple’s Future is the iPad

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Apple (s aapl) turned a few heads when it declared itself a “mobile device company,” but sales of the iPhone and the iPad have shown that really, that’s exactly what it is. In 2011, it’s poised to become more of an “iPad company” than anything else.

That’s because, according to a research note by Ticonderoga Securities analyst Brian White (via Forbes) based on supplier information, Apple is planning to sell 45 million iPads in 2011. In case you’re more concerned with dollars and cents, that translates to roughly $30 billion in revenue.

Which, if you’re counting, is nearly as much as the company made from all its products in 2008, when it made around $32 billion. It’s not too far off its total for 2009, either, when it took over $35 billion, with a good deal of the difference between the two years being made up by the iPhone.

The Mac has traditionally been Apple’s biggest revenue-generator, with 44 percent in 2008, and 37.7 percent in 2009. The iPhone has been steadily gaining significance in the revenue picture, going from only 5.7 percent of total in 2008 to 18.5 percent in 2009. But that’s nothing compared to what the iPad has and will accomplish.

The iPad is already the fastest selling electronic device ever, and with anticipated sales of 7-10 million iPads since its introduction through the remainder of the year, Apple is on track to make between $4.5 and $6.7 billion in revenue this year alone. That’s close to what the iPhone made in 2009, and the iPad hasn’t been available for the whole year, and has only just seen an expansion of its retail availability to more of Apple’s secondary channels.

Even if Apple doesn’t hit 45 million iPads in 2011, more conservative estimates still put the iPad in a place of prominence regarding revenue share. White’s own prediction of 21.8 million iPads sold in 2011 puts revenue at $14.7 billion, which would’ve exceeded the Mac share in both 2008 and 2009. No matter how you break it down, it looks like the iPad will become Apple’s central tent pole.

If Apple’s business is mostly iPad, then you can bet that Apple’s focus in 2011 will be mostly iPad. And that’s a good thing, both for consumers and developers. iOS will get plenty of attention, meaning more APIs, performance improvements and continued refinements in the App Store review process. Apple will also make translating the iPad’s success across its lineup of product offerings. We’ll see more touch tech, better portability and more aggressive pricing across the board.

The iPad hasn’t only succeeded where many thought it would fail, it’s also become the core of Apple’s business virtually right out of the starting gate. Apple will shift its priorities to capitalize, and those operating in the iPad ecosystem are the ones who stand to gain the most.

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17 Responses to “According to Revenue Estimates, Apple’s Future is the iPad”

  1. The thing I disagree with about this article is that it assumes that while the iPad sales will grow, that the rest of Apple’s product line will stay flat.

    The iPad as a major growth product? Absolutely!
    The “central tent pole”? No.

    The iPhone will remain the central device in Apple’s product line. In 2011 we will see the iPhone introduced on multiple US carriers (not just Verizon, but probably on all of the major carriers). The entire iOS ecosystem will grow by comparable scale to the iPad. I expect the percentage breakdown between iPhone and iPad to remain consistent. Also, the most overlooked product is the iPod touch, which Apple makes a killing off of, but is always overshadowed in the press, first by the iPhone now by the iPad. Cumulatively, the entire iOS product line will continue to grow as a percentage of Apple’s revenues. But the Mac will also benefit from a halo effect, though not enough to keep pace with the iOS products growth.

  2. Gaurang

    Yes I have an iPad and I love it. And I think most people really dont know what its capable of. Its basic feature set of browsing, email, photos, videos, books, etc is very good, but as you keep adding apps, you increase its utility manifold. iPad’s OS is the most fluid/smooth OS I have ever seen on any device, and that makes it a pleasure to use.

    But I dont think it can sell 45 million in a year. I mean, really. Its really a rumor — i dont think apple will expect to sell so many. Esp they will have more competition also next year. No doubt iPad will sell really well — but not 45 million. Thats just too high. There’s no basis for this number.

  3. It is real simple. The IPad is the best computer in the market for consumers of computing. It is not necessarily for people producing something. The growth in computing is consuming not producing. We now consume more than we produce.

  4. Others may be interested in research findings we just presented at CTIA’s iPad and Tablets Conf. More details at

    Highlights – among those surveyed (n = 400; smart phone and feature phone users; sample balanced by age and gender)
    – 1 in 2 interested in purchasing a Tablet; interest is equally high across all age groups and gender
    – Significant # (1 in 5, of HH’s with children) interested in purchasing a Tablet for child in HH
    – Only 1 in 4 “very familar” with Tablets – lots of new buyers will be entering the category and learning about tablets over the next few months
    – Of 9 benefits examined, highest interest in benefits related to usability (durability; viewability; instant-on; etc.)
    – Top activities for which Tablet most likely to be used: Social networking (70%); e-mail; look up information; search; directions/map; visit websites/surf the internet
    – “Sweet spot” on pricing – $200 (median response to question “price that’s such a good value you would definitely buy”) to $350 (median response to question “price at which Tablet would start getting expensive but you would still consider”)
    – Preferred brand for Tablet – Apple leads by a wide margin (69% rate as “ideal”); next 4 highest rated are all PC OEMs; Mobile OEMs tend to be rated in the middle to lower end of range

    Dr. Phil Hendrix, immr and GigaOm Pro analyst

  5. I couldn’t agree more with this. According to my web logs the Apple iPad has very quickly dominated “mobile” visitors to my site, although after chatting a pal with an iPad I think most of these mobile users are in fact sitting on their sofas and surfing while watching tele. I am really tempted to get one myself now, although that will only make me lazier!

    What is more interesting is how Apple seem to be using sudden popularity to spring board themselves into the Internet advertising game. Interesting times ahead.

  6. I never thought that iPad will be that popular, but time and again, it has been shown that you cannot predict the market, esp. the digital one!

    Hopefully, Apple will continue to improve the iMac & Macbook as well!

    I just don’t see what the iPad’s got that the Mac Book Pro doesn’t have!

    Maybe it is just me!

    • The problem with your thinking is you assume it’s a zero sum game. It’s not. What makes the iPad great has nothing to do with what the MacBook Pro has or doesn’t have. Only an idiot would think one replaces the other.

      It’s like expecting a person who owns a bicycle to not need to own a car.

  7. Yes, the ipad is wonderful, but I hope that Apple continues to support and improve their computers as well. I run my whole business, Sandra Dee’s Photography, on my Apple Macbook Pro! Aperture for image editing, Iphoto for favorites storage, Aperture and Keynote for video presentations, iweb for my website, garageband for homemade songs for youtube…… the list goes on and on. Trying to compete in the Lexington ky photography market is very difficult, but my Mac made website appears to be doing very well. An Ipad could not be considered for business use. So please, apple, don’t forget those that love your computers!

    • Sandra, I think quite the contrary. The article does not say the Mac is not a profitable business. It’s still bringing cash to the bottom line. The Mac is growing. As long as this is the case, don’t worry at all. Apple can afford having multiple priorities. Also, what if these priorities start merging? For instance, Mac OS could borrow features from iOS and vice versa. I think the next computers could benefit from a Mac OS/iOS integration that will only make them better machine. 2011 will not only be the year of the iPad but also the new Mac OS.