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International Tablet of Mystery

One of the remarkable patterns associated with the iPad has been its growth rate. Looking at the ramp of the product relative to the iPhone and iPod touch reflects this sense of raised expectations:

 

At the same point in time, and adjusting for seasonality the iPad is outselling the iPhone by a factor of 3 and the iPod touch by a factor of about 5. This is also reflected in the installed base of devices, where the 84 million iPads sold through its first nine quarters is more than three times the iPhone base at a similar point in time.

Of course, the world of 2012 is different than the one from 2009 when 25 million iPhone sold. iPhones are available in far more points of sale and to many more buyers world-wide. But the interesting contrast is between the iPad and the iPod touch.

I’ve always maintained that the dynamic difference between the iPad and the iPhone is that it’s unrestrained (and unsupported) by the operator channel and all that it implies. The iPad is a pure computing product whose means of communication is unregulated. That means transparency in pricing and transparency in distribution.

But so is the iPod touch.

The iPod touch is a “nano iPad” (or as detractors put it, the converse of that.) So shouldn’t the iPod touch behave as the iPad?

We don’t know exactly how the iPod touch behaves. We don’t have specific figures on its sales. What you see in the charts above are my estimates for the iPod touch based on company statements that “about/above 50%” of iPods are touch versions. That and the cumulative sales totals that are occasionally reported.

However, we have received an unexpected morsel of data from the Samsung v. Apple trial that may help characterize the two products: US sales data. Having the US data and knowing/estimating the global data gives us an estimate of the international (ex-US) sales for all three products.

I indexed the three products to measuring quarters since launch. The pattern here is that the iPad diverges from the iPod touch in its international appeal. Since the iPad expanded internationally even faster than the iPhone, the issue is not only one of rapidity in appeal but also a qualitative difference.  The iPod touch seems to have stabilized at 50% non-US sales while the iPhone is between 60% and 80% outside the US.

The iPad reached 60% non-US sales in its first year. Its last quarter was 70% outside the US.

So what’s going on?

The characteristic value of the iPad is in its appeal to “computing non-consumers”. Computing has come to mean media consumption, education, communication and entertainment. These jobs to be done are casually done with much more ease on an iPad. The iPod touch can do these jobs as well, but not as comfortably. The iPod touch is “absorbable” by younger consumers and typically they have their hiring done by their parents. Those parents are less likely to indulge where incomes are lower.

But the universal appeal of the iPad is evident in its global visibility. Like the tasks it performs, the iPad itself is becoming less of a mystery.

  • obarthelemy

    I’m just back from a family holliday where all generation mixed (or collided ^^). What I observed:
    – Anyone over 40 wants a large screen. iPhones are too small, the 5.3″ Galaxy Note is OK-ish, but small and large tablets are much preferred. Readability is key, then ease of use. People actually prefer dumbphone+tablet is that range. I’m 100% sure a bigger tablet (12″ ?) would be a runaway success, especially with a yet easier interface full of widgets, though the “I goofed a little” (back) key, and the “I’m totally lost” (Home) key get a lot of love already.
    – 70+ people have mysterious issues with touchscreens, probably due to lower feelings in their fingers, or trembling, or hesitating, or.. ?
    – Kids don’t care, as long as they get games and movies. They’ll play and watch anything on anything. In any position too :-p
    – Teens are more partial to their personal iPhones. They want a personal device where they can hide their own stuff and not have to compete with adults for timesharing; and they like small and unobtrusive so they can be glued to it without attracting too much attention.
    – young adults use both. A lot.
    – nobody wants a regular laptop when there’s a touch device around (I know, I brought 2 of each, the laptops never got used, except by a cousin on a working holliday)
    – Apple has incredible mindshare. All smartphones are called iPhones, all tablets are called iPads. My Nook Color and Xoom 1 got called “small iPad” and “Black iPad”, nothing doing.

    I was also amazed at the misinformation and plain ignorance.

    One of my peers (40-50) wanted a large device to be able to actually see MMSes and pics from her daughter. An iEnthusiast sold her on the iPad, forgetting it’s not a phone so getting MMSes on it is hard. (clarification: MMSes are “multimedia texts”, popular in Europe because dumbphones w/o data contracts can send pics or even small videos that way, one at a time, usually for free since most contracts include those).

    Connectivity issues (Airplay/dlna, mass storage mode, hdmi output…) went fully over everyone’s heads. People will go to you Youtube to watch a video they already have downloaded on another device. Even connecting a BT keyboard to a tablet looked like magic. Nobody bitches at the horrendous amount of dongles iUsers have to carry about.

    • http://www.noisetech-software.com/Home.html Steven Noyes

      Your last sentence is interesting:

      “Connectivity issues (Airplay/dlna, mass storage mode, hdmi output…) went fully over everyone’s heads. People will go to you Youtube to watch a video they already have downloaded on another device. Even connecting a BT keyboard to a tablet looked like magic. Nobody bitches at the horrendous amount of dongles iUsers have to carry about.”

      You are right. Connectivity issues really go over people’s head 90% of the time. This is the attraction of Apple. Using AirPlay is much easier on the iPad/Apple TV than DLNA on the generic Android tablet and some TV; don’t even consider the average person setting up their own home media server. This all goes to your last sentence.

      “Nobody bitches at the horrendous amount of dongles iUsers have to carry about.”

      Now personally, I don’t own or use any dongles (unless you consider the charger a “dongle”) on my iPad and neither do any of my friends but I do know there are some out there that might prove useful at times. People understand wired connectivity much better than wireless connectivity. I would suggest the “dongles” actually make things easier to use for the majority of people. A single port and you have a dongle for “camera”. Another for “TV”. Another for “Charge”.

      I would change what you said and go, “Android people bitch at the horrendous amount of dongles a few iUsers have to carry about.” It is like saying “iUsers bitch about the configuration Android people have to do to use their devices.”

      • obarthelemy

        I’ve never actually used AirPlay so I don’t know how easy it gets, but dlna is a real no-brainer:
        1- start the dlna server on the machine that has the content you want
        2- start the client on the machine you want to watch it on
        3- on the client, select the server that has the content you want
        4- navigate by folder or content type till you get to what you want

        Indeed, physical dongles kinda make how to connect stuff more obvious.

      • vincent_rice

        See, you’ve lost 80% of the population already by saying ‘server’. They just don’t understand the concept.

      • Joe_Winfield_IL

        Airplay process:

        1. Open the media file or web browser
        2. Click the Airplay button
        3. Choose Apple TV

        See the difference?

      • http://twitter.com/handleym99 Maynard Handley

        Horace’s blog is not the place for religious wars.
        I just want to point out (on the assumption that you are an honest person, not a zealot) what the issues with your model are.

        I’m not convinced they are with what vincent_rice says, using the terms server and client ie with the language. I think they are more fundamental.
        (a) Always on: Why is there a need for steps (1) and (2)?

        (b) Navigation: This is a REAL killer. I remember using a WDTV a few months ago and thinking that it was just bizarre, like being teleported back to the nineties. The fact that I was expected to find content by dicking around in a file system rather than having it presented in some aggregated and sensibly navigated fashion was so retro.

        The point here is not that it’s hard to understand files and folders. The point is not that there are alternative navigation models on a WDTV (under the right circumstances, eg there is aggregation to a “library” of content on a locally attached hard drive).
        The POINT is that the system feels like it belongs ten years ago.

        In the first place PUSH content should just work naturally within every app. Compare the ease of getting Airplay content on an iPad to an Apple TV with Pushing from a DLNA device.

        In the second place LOCAL content on a DLNA device should be navigated through a nice browser, not through the file system. (Works this way on many DLNA devices, but you can never be sure what you’re getting.)

        In the third place, the model you trumpet, a PULL model, is the worst implemented of all. Compare how Apple handles PULL models, at first with access to “shared” iTunes running on other machines in your local network, now with Home Sharing. There is no talk of servers and clients. There is no visible file system. All you do is connect to a remote entity (by a single click), after which the remote entity is browsed like a local entity, and behaves exactly the same way.

        Yes, in theory the DLNA model and the Apple model have the same capabilities. And in theory “ls -la” and browsing in a Finder window show you the same information. But the bulk of humanity substantially prefers the latter to the former. (And prefers even more no Finder, no files, no folders, and the browsing of SONGS [not files] through a dedicated song browser UI.)

      • obarthelemy

        I’m at a disadvantage because I have very little experience with the Apple way. Maybe I’ m missing something, but the hierarchical (ie, folder) model seems the only workable one for me.

        I’ve got about 3TB of media, ie thousands of songs, hundreds of movies and hundreds of TV shows. I’ve tried tagging my CDs as I ripped them, so those are all mixed up in a single directory, but still manageable by navigating genres, artists… The Movies and TV Shows I mainly “got” untagged, and tagging them by hand after the fact would be a major chore. Going: Videos -> US Series -> Community is a very fast way to get a nightly fix of comedy.

        Apart of that tags vs trees issue (and I’m not even sure dlna couldn’t do tags), I think the main difference between the 2 systems is that dlna servers don’t autorun unless you set them up to, which I don’t, and that some call them servers and clients, other use other names. Maybe just searching would be a good way too, dlna does that, but in my case I get hundreds of hits, so meh.

      • http://www.noisetech-software.com/Home.html Steven Noyes

        Thank you for proving my point.

    • ronin48

      Lots of random hunches based on anecdotal data from a tiny sample are totally useless in several ways.

      • obarthelemy

        I don’t agree at all with that. I find deep embedding within a group of unsuspecting real users a lot more insightful than most market/user surveys.

      • ronin48

        What you “find” doesn’t matter unless you can draw statistically significant conclusions from relevant data. And you can’t from what you describe.

      • http://twitter.com/JohnDPMorgan John Morgan

        I found obarthelemy’s observations interesting and insightful. Qualitative research has a different, well, quality, to quantitative research and can generate its own insights. It’s these insights that are frequently the genesis of hypotheses that are then subjected to quantitative analysis. This kind of forensic observation often precedes quantification in the causal chain.

      • ronin48

        Well said but irrelevant and not applicable to the post in question. You can not say things like “Anyone over 40 wants a large screen” or “Kids don’t care…” or “young adult use both. A lot” without real data and real analysis. He went from anecdotal observation right to broad generalized conclusion many times. You must have missed that.

      • ronin48

        HELP HORACE!

        I give up. Can you please straighten these people out?

        The don’t even know what they don’t know.

      • Joe_Winfield_IL

        I agree that his observations are nothing more than what you say they are. However, @obarthelemy:disqus is a blog reader who is choosing to share his opinions within the community of Horace’s readership. This wasn’t a published survey to be sold as “market research.” I don’t think it needs to be subject to any intense scientific scrutiny; it was clearly labeled as observations from a family reunion.

        Further, the comment will elicit several responses and open an interesting dialogue. The fact that you can’t see that means that you don’t even know what you don’t know.

      • vincent_rice

        You are being a bit ridiculous – this isn’t a seminar or dissertation. The poster was providing a narrative to illustrate certain generalisations that one can discuss and either agree with or not. He is free to make whatever statements he wishes.

      • obarthelemy

        2 things:

        1- I was actually taught that product research is a 2-step process, where you first find out qualitatively what the questions/issues are, then quantify them and bundle them in segments. Anecdotal observation can be quite good at spotting issues/opportunities, such as: is there a market for large screen tablets; would top-notch wifi connectivity be a valuable selling point; is there a market for phone+tablet+contract bundles targeted at seniors

        2- It might actually be enough in some cases. Designing and implementing good market research is hard, expensive, and time-consuming. Most market research I’ve seen and subjected myself to is ridiculously biased and unreliable, so one might possible do actually better without it.

      • oases

        Are you Sheldon Cooper?

      • Walt French

        It’s a bunch of real data points, from an extremely small sample. Different than you usually get but much more interesting than “totally useless,” all the more from his allowing the data to tell a story, rather than imposing a model of what matters on a survey sample. Why the sour attitude?

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  • http://www.facebook.com/people/Luis-Alejandro-Masanti/1074106344 Luis Alejandro Masanti

    Footnote ‘[1]’ is missing.

  • KirkBurgess

    The negative growth of the iPod touch in your first chart is disconcerting – are iPod touch purchases being replaced by iPad purchases? It’s the most logical guess I have.

    • vincent_rice

      Disconcerting why? The iPod concept is on a natural downward curve. It surprises me how well the iPod Touch continues to do. One suspects the 7.85″ iPad will cannibalise the touch even further.

    • http://twitter.com/handleym99 Maynard Handley

      One reason for fewer iPod Touch sales is that iPod Touch is being crowded out.

      If all I want is portable audio, an iPod nano (either the newest one, or any of the older ones on eBay) is a better solution. Smaller, better UI for that single job.

      If what I want is the iOS experience (ie a small touch computer) then:

      (a) if I’m poor I land up with a hand-me-down iPhone, which has been detached from the cell network, from someone else. (I suspect this is a very common pattern. Younger kids that would have received iPod Touches three years ago now get Mom or Dad’s old iPhone when they upgrade.)

      (b) if I’m richer I buy an iPhone.

      (c) if I want more computer, I buy an iPad.

      Who’s left? Just not that many people.

      • GeorgeS

        Actually, there are a lot of people left. You seem to think that everyone is in the same situation you are. I just got a used 32GB iPod touch 3rd Generation. It doesn’t replace my phone–an antique Samsung flip-phone that still works just fine, but my Palm TX. Of course, I could combine the phone and iPod touch with an iPhone, but that would cost me at least $500/year more. As for a “hand-me-down” iPhone, where am I going to get one? There’s no one to hand it down, so I’d have to buy one. A used iPhone costs a lot more than the $130 I paid for the iPod touch, especially for 32GB. I will eventually get an iPad, probably used, too.

  • FalKirk

    “The characteristic value of the iPad is in its appeal to “computing non-consumers”. Computing has come to mean media consumption, education, communication and entertainment. These jobs to be done are casually done with much more ease on an iPad.”

    I know that this article is about the iPod Touch, but I think that the above paragraph is about as concise a summary as once could want in order to explain the success of the tablet.

    First, the tablet is not competing against traditional notebooks and desktops. It is competing against non-consuption – those jobs which formerly could not be done by traditional computers (for example, working on a computer while standing) but can now be with ease on a tablet. The tablet is expanding rapidly because it literally has no competition. It is introducing the power of a computer to a job where no computer had ever or could have have been before.

    Second, since these jobs were formerly not done on computers, and since these jobs involve tasks that are, in many cases, deemed to be less important than those done by traditional computers, the traditional computer advocates do not even consider them to be computing tasks. Tablets are “beneath contempt” and therefore beneath the radar.

    No, let me correct that. They are not beneath the radar. That would imply that they were undetected or invisible. Tablets are sneaking up on traditional computers and traditional computer advocates not because they are not visible, but because they are being purposefully ignored. We’re not blind to tablets – we’re shutting our eyes, turning our backs and insisting that they don’t exist.

    • http://www.tumblr.com/blog/his-divine-shadow His Shadow

      Tablets are sneaking up on traditional computers and traditional computer advocates not because they are not visible, but because they are being purposefully ignored.

      We can thank our perpetually wrong “analysts” at Gartner and IDC for that, given as they are to pronouncements seemingly designed to make the incumbents feel better about their chances going forward.

      • FalKirk

        “We can thank our perpetually wrong “analysts” at Gartner and IDC for that…”

        They are, in my opinion, just reflecting what the industry wants to hear.

  • crustyjusty

    The ability to download music is still problematic in many places in the world, where as the app store has been available in many countries since the iPad was launched. So, the ecosystem is much stronger, and I think that that can account for some of the rapid adoption. If the iPad came out and then the app store came out a year later, there’s no way it would see the same growth pattern. You can’t go to a physical app store and buy an app to put on the iPad.

    The iPod sold well because you could get content on it in other ways.

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  • unhinged

    One of many differences between the iPad and the iPod Touch is that the iPad can have 3G connectivity. This increases the geographical areas in which it can be used, thus providing more value.
    I would also argue that the iPad, with its bigger screen, provides more potential for use in business activities that the iPod Touch.
    These two points of difference in capabilities could explain the difference in sales.

  • KDT

    @Horace
    “We don’t know exactly how the iPod touch behaves. We don’t have specific
    figures on its sales. What you see in the charts above are my estimates
    for the iPod touch based on company statements that “about/above 50%”
    of iPods are touch versions. That and the cumulative sales totals that
    are occasionally reported.”

    Actually,

    Thanks to the Samsung v. Apple we do have precise numbers of iPod Touches sold….

    http://allthingsd.com/20120809/apple-vs-samsung-trial-forces-companies-to-open-up-the-books/

    • http://www.asymco.com Horace Dediu

      Those figures are only for the US.