The next 100 million iPads

Having reached 100 million iPads shipped in 2.5 years the natural question is how long will it take for the next 100 million iPads?

The ramp of cumulative units shipped is shown below.


I also added the equivalent ramp for the iPhone. [The last data point for the iPad is based on an estimate of 16.5 million units in Q3 which may need revision depending on company reporting.]

The next 100 million will depend to a large degree on the success of the new iPad mini. To make an estimate we have to realize that there are several aspects of the tablet market which differ from the phone market and that therefore the predictive power for previous data is weak.

First, the channels are different. Tablets are sold as media consumption or “computing” products. They are not sold as communication devices. Therefore operators have few incentives to promote and subsidize them. They do participate in the distribution but not with the same level of commitment. That means less “push” and opportunity for discovery. Apple has an advantage in this case with their stores and brand value. The lack of operator engagement and lack of points of sale might be one reason why Android tablets have not ramped as quickly.

Second, for some competitors, the tablet itself is a loss leader and acts more as a terminal into an ecosystem rather than a product in itself. In cases where tablets are given away it’s possible that consumers might own one for each platform or ecosystem. This is similar to the game console model where the cost of the console is not a barrier to many avid gamers. This means that penetration of tablets can reach above 100% of users in some markets. Although network connections (i.e. SIM cards) can and do reach well above 100%, the number of phones in use by one person simultaneously is bounded.

Third, the lifetime of the product is as yet undetermined. Phones tend to last 2 years. This is due to evolving standards as well as high wear and tear and breakage or losses. Tablets are not as “mobile” and are less likely to be used and the basic functionality does not evolve as rapidly. It’s possible that replacement rates for tablets will follow more that of notebook computers than phones. Perhaps between 2 and 4 years. I suspect most iPads purchased are still in use today, including the first version. There will be some obsolescence from system upgrades, but the older systems will keep going.

Some of these aspects of the product could lead to slower growth and some to faster growth. That and the fact that it’s a completely new category with business and consumer and educational and vertical applications makes it a difficult product to forecast.

Having said that, the product is extremely resonant with buyers. The growth to 100 million is testament to that. The liquidity of the product, with no carrier locking and no pricing illusions means that it reaches all parts of the world quickly. So there is no obvious upper bound on the size of population who might buy it. The new price points and form factor may lead to a wave of new adoption, similar to the impact the iPod mini had on the iPod line.

There are still many factors that can slow growth, especially production capacity, but I believe that the iPad could growth between 50% and 80% which would mean 100 million more iPads could be sold by the end of 2013.

  • KirkBurgess

    The new iPad 4th generation and iPad mini both launch in 34 countries next week.

    That must be some sort of record for a new apple product rollout?

  • Sharon_Sharalike

    Does the 16.5M sales estimate take into account that they sold the 100 millionth “about two weeks ago” ? One analyst is claiming that indicates about 15M for the quarter, though he did not show his work.

    • I’m hedging because I don’t know if sold = shipped. The company reports shipped in its financial reports but Tim said “sold”. It’s possible they are the same thing.

      • Sharon_Sharalike

        Good point. Seems that at the very least there’s a narrow range for the quarter’s iPad sales.

      • Horace in your previous experience which is the number we should focus on or said another way; based on what you have seen and the 100 million mention; do you think this means Apple will report 15 million? Do you know the street estimate for ipad vs Apple guidance?

      • So you’re saying 16.5m shipped but ~15m sold through? If that’s the case, you believe they added about 1.5m to channel inventory which was at 3.2m by end of June.

    • Sharon first time I see you posted; do you think that apple will make or miss the ipad estimate for qtr reporting on Thursday? Looks like thy may actually beat the iphone number as verizon beat by 15% (iphone activations) and att beat by 10.8% (activations)

      • Sharon_Sharalike

        There are others who can say much better than I can, but obviously the iPad number is capped, so no upside surprise there. The phone may do slightly better if Verizon is a good indicator.

        However, if you are trying to gauge the market’s reaction on Thursday, I suggest that the number that will drive the market is not the results, but rather the guidance for the upcoming quarter. And that just might be a giant number.

        I’ve personally given up trying to play any moves. I’ve got my shares and I’m holding on to them at least until there’s a comma in the price.

      • That is my stance as well; and I agree relative to the december qtr guidance; I also think that the declining PC market is not being factored as much as it should be; Microsoft surface is likely to hurt windows pc sales with MSFT selling surfaces and people/companies not buying windows machines (by MSFT partners) but also once they see where the PC is going- they may then look at ipad if you get my point- finally i was struck by Tom Cook saying Apple had Apple was number one in overall laptop sales in US and the iMac was number one selling desktop

  • KitFR

    Despite its young age, the iPad looks rather mature to me, and the iPhone is well on its way. Immature products fail to meet their users’ needs. Early PCs were expensive and underpowered; early mobile phones were expensive and heavy; early smartphones had limited functionality and awkward inputs. Compared to these other devices, the first iPad seems to have sprung fully formed from the head of Steve Jobs. Cut the weight in half, double the performance, double the battery life: are these compelling reasons to upgrade?

    The one well known defect involves heavy-duty content creation; solving this would push the platform to the next level. Some killer app could also help show how this category might evolve. Until then, I feel the hardware and software are in balance with how I use the device. I love mine but cannot see myself upgrading for the foreseeable future. Hardware advances will not drive upgrades until human imagination stops being outpaced by Moore’s Law.

    I think mobile phones are also getting to the same point, with the differences being that subsidies encourage a two-year upgrade cycle for many users, and that the rough environment in which they operate leads to a shorter life.

    • Sharon_Sharalike

      One killer app will be when the iPad is more powerful than any current gaming console. At that point just add a couple of wireless controllers and a TV set and it’s the best gaming console, but only when you want it to be.

      That’s also a big win for the high-end game producers. They get direct delivery, no inventory, less piracy, the ability to patch flaws, sell extra content, and Apple’s 30% cut is less than they pay to the console makers.

    • vincent_rice

      iPad Pro – 14″ screen with iPad 4th gen internals – you heard it here first.

      • obarthelemy

        13″ Archos/Arnova FamilyTab coming up ^^ Apple will probably ape them, eventually.

      • vincent_rice

        “ape” them? Prejudiced and unjustified I would suggest.

      • areff2000

        How about a foldable screen: from A3 to A4…

      • people have enough trouble carrying the iPad 9.7″ for long periods of time, can you imagine how they feel lugging around a 14″ iPad.

      • Space Gorilla

        I haven’t heard a lot of complaints about ‘lugging around’ a 13 inch MacBook Air or the iPad. Talk about first world problems. Whaaaaaa my iPad is too heavy, whaaaaaaa…

      • Space Gorilla

        I said that when the first iPad came out, the bit about the larger screen 🙂 You’re absolutely right! I also want to be able to tilt my 27 inch iMac down and use a touch interface, but that’s a long way off. A larger iPad is the next logical step for Apple, non-retina of course. Look at the screen on the new iMacs for a hint. It’s just a matter of cost and scale, which takes time, so maybe a year from now?

    • Jeff G

      I agree with you on replacement. My first ever Apple product was iPad 2 in May 2011 and it shows no sign of under-meeting my needs. However, replacement is a smaller potential pool of buyers than the massive pool of non-tablet owners (aka competing with non-consumption).

      It also, then took me less than a year to buy my 2nd Apple product (iPhone 4s). To me, the killer apps are:

      1) Pages
      2) Numbers
      3) Keynote and Keynote Remote
      4) Camera & Photo Album
      5) iCloud

      I wrote a book on iPad. I was writing a book and I detest Word and also detest being bound to a desk. I also grew tired of lugging around a power source to charge computer (and had not made switch to mobile Macs yet, but I will). When I began writing, I Googled, “Can you write a book on iPad?” At the time, the consenus was “no”. This made me all the more determined to write it on iPad to see for myself. It was actually quite easy.

      Yes, the typing is slower, but it is made up for by instant on, autocorrect, enjoyable interface and the fact that I might be standing in line at Jamba juice, or have 2 minutes to edit while I wait for my daughter… and I use those 2 minutes. With any kind of computer, I just wouldn’t open it.

      These features, combined with iCloud, so that my documents all synch effortlessly means I don’t every have to worry about backing up, synching or loosing documents or data. That savings of time, effort and thinking is huge for me. It’s a killer app. I talk into pages on my iPhone 4S while I’m out for a walk. When I come home, the edits (or newly created content) are already changed on my iPad, and when I open that document, it opens to the same location I stopped working on via my iPhone.

      This is a long way of saying, non-consumption is the biggest pool iPad’s will be selling into for at least the next few years. Almost daily I show people things on their iPhones and iPads they didn’t know they could do. Their is an exodus in progress from traditional computers to tablets. The trend may or may not accelerate. My best guess is that it will hold fairly steady for a couple years.

      As more and more people become open to, impressed with and knowledgeable about smart phones, tablets and their capabilities Apple, and the iPad/iPhone Dynamic-Duo will be a prime beneficiary.

      My 11 year old just bought an iPad with her own money. So did my 74 year old Mom. I know people with multiple iPad’s and Apple products to complete their whole ecosystem. I know enthusiasts who are all to happy to get the new products just to play with them and get the marginal improvements. These are not the majority of people, but they complement the newbie purchasers to drive new iPad sales.

      It’s not the hardware, it’s the software/Apps, plus ecosystem, plus all the things it saves me time and clicks on. (Such as not having to download and update virus software, Or having Siri do things for me while my hands are multi-tasking on something else.)

      The killer apps are there for those who venture to find them.

      • obarthelemy

        Instant on (sleep/hibernate), autocorrect, and a nice interface are standard features of pretty much any computer these days.
        Cloud synching of docs is too, cf Google Drive, whatever MS call theirs, Dropbox, and a smorgasbord of others. Be aware that those are not backup solutions though: your data can disappear from the cloud at any time, the cloud provider takes great care not to guarantee safety/availability/confidentiality…and incidents happen all the time. Have a true backup, or better, a few of them, always stored in a safe place.
        Looking are your testimonial, it seems it’s not the hardware, nor the software, but the users ^^

      • Jeff G

        All good points you make. (I do other back ups too)

        I tried Evernote, Drop Box and compared to using them on my droid, document driven work on Pages and Numbers saves me time, effort, and lots of clicks! Maybe it’s cuz I’m new to Apple, but I’m enamoured with how much easier things are than they were in Droid and PC world

      • Noah Berlove

        It used to be that everything was available on Windows and you crossed your fingers hoping it would be available for Mac or Linux. Now I can not think of a significant tablet app that is not available for the iPad and I can not imagine what could come out for an Android or Windows device that did not have an iPad equivalent. Unless Apple does something insane to alienate developers, this is not going to change.

    • FalKirk

      The tablet market isn’t close to mature (over-serving the market) yet. Look at what Apple just did to the third generation iPad. They canned it after 7 months so they could double the speed and radically increase the LTE range. There’s still lots of speed increases, if nothing else, coming before we can call the tablet market mature.

      (We may be speaking of two different things but I felt that my point was worth expressing.)

    • obarthelemy

      I think maturity will come to tablets when
      1- they can truly replace most desktops. They already have the CPU/GPU power to do so, but lack the I/O, OS support and ecosystem. They need better docking options, better input support (keyboard and mice are superior to touch in a lot of cases), and better multitasking.
      2- they become more standardized. The desktop market matured when the Wintel PC came of age, allowing for a lot of choice, low prices, lots of hardware peripherals/expansions and software, without becoming beholden to a single vendor.
      Right now, tablets work OK as.. well, tablets. They have the potential to take over the whole computing market, but need to come down in price and become more versatile. The x86 Windows 8 tablets might get closer to that, if the Metro App Store fills up quickly enough.

  • obarthelemy

    I’m not really buying the “tablet as a loss leader” line that Amazon in particular and also Google (and also all the vendors in a Marrakech souk I was in last month) are hawking.

    There are rather nice 3rd- or 4th- tier 7″ tablets ( sold for less than Amazon’s and Google’s, and those are not loss leaders. I guess by tacking on nice overheads you can make it look like Amazon’s and Google’s “loss leader” line is not a straight-faced lie… only a shifty-faced one.

    I’m sure they need us to buy them to pay for their mothers’ surgeries, too.

    • xynta_man

      While the Kindle Fire or Nexus 7 aren’t products of iPad-callibre quality, you shouldn’t judge them compared to devices from “no-name” asian OEMs.

      These “rather nice” devices, like that Ainol that you linked to, are made god knows how and from what (sometimes they even use buggy “pre-production” SoCs that are given to them as samples), having horrifying levels of manufacturing and construction defects, almost no sigh of quality or reliability. And don’t even try to mention “support” or “warranty”, when talking about them.

      Those devices are basically aren’t engineered — random components are just thrown in together, held together with shitty build-quality (hence no R&D costs). Sure, they make great little devices for geeks to tinker with, but they are in no way even somewhat decent consumer products. Compared to them, even the first generation of Kindle Fire (which sucked) is a marvel of hardware and software engineering with exceptional level of quality.

      Also, there were numerous estimations that showed that Amazon was indeed losing money of each Kindle Fire that they sold, with one analyst even finding correlations in Amazon’s declining Kindle Fire sales with their improved financials.

      • YipYazoo

        Interesting perspective. Thanks.

        If I were considering a enterprise deployment of tablets in a company, educational institution or even K-12, the only candidate, based on precedence, is… are the Apple iPads. Not only because they are impeccably designed and manufactured, but they have what really counts. The apps, the ecosystem and the SUPPORT TOOLS necessary for such a deployment.

        MDM (Mobile Device Management) seems to be severely limited for Android – and I expect for Windows 8 RT – because the respective operating systems will be on multiple tablets of differing specifications and capabilities. Whereas Apple (and for that matter Research In Motion Blackberry devices) only have to contend with their own products.

        My point is we should not forget about business, education, government or other enterprise deployments of iPads, much less ordinary consumers. Indeed, I think the iPad mini is the perfect form-factor for younger hands and at a price-point affordable to many developed nations educational budgets.

        On a side note, I get sick to my stomach when I hear of news of notebooks distributed to students to K-12 institutions. Not that the deployment goes badly, it’s just the notebooks the institution can afford are nowhere near as robust as they need to be (like a Panasonic Toughbook). Tablets, specifically iPads, makes the most sense in the long run.

    • Simon

      Here’s the article xynta_man mentioned

      Like what xynta_man said the small Asian companies can get away by adding tiny bit of margin on top of BOM with cobbled up products heavily based on reference designs with very little software work. The large companies cannot do that.

      • xynta_man

        Yup, thanks – that’s the one.

      • obarthelemy

        I don’t see “little software work” and “products based on reference designs” as negative points. On the contrary, the more standard the hardware and the software, the better. Then again, I don’t see thinness as relevant at all for a tablet, either.

        I’m not sure Ainol in particular is that small, and it’s definitely not fly-by-night nor “no-name”. As I said, 3rd tier, 4th at worst. They’ve been doing tablets for years. I had a tablet from them at some point, and it was OK within its limitations (3hr battery, no GPS/BT) which were clearly communicated beforehand.

      • Tatil_S

        ” I don’t see thinness as relevant at all for a tablet, either.”
        Leaving aside the fact that most consumers find it relevant, marking you as out of touch, components for a thin tablet are more expensive. IPS screens are more expensive. Longer battery life requires a bigger battery with a higher price tag. If you are going to go against consensus opinion on margins and accuse some big name companies of lying, you need better evidence and a more arithmetically sensible line of reasoning than “the existence of 7” tablets of lower quality and BOM costs, that may or may not be making profits for their manufacturers, shows that Google and Amazon cannot be losing money.”

      • obarthelemy

        How many people commented that they *wouldn’t* buy the latest iPad because it was slightly thicker than the previous one ? What does that say about the real importance of thinness ? What purpose does thinness serve in a tablet ? How come the thinnest tablet is a failure ? Is there actually any correlation between a tablet’s thinness and its success ?

        I think you’re seeing correlation and causation where there’s only concurrency. The iPad is rather thin. Apple communicates on that thinness. People buy lots of iPads. I’ll need proof there’s any link at all between 1- or 2- and 3-.

      • Tatil_S

        Let’s not shift the argument. It is a fact that thinner components, longer battery life and IPS screens etc. cost more, whether you think it matters to the end user or not. Your original comment was that Google and Amazon are lying and they are actually making profit on the hardware, by pointing to third tier OEMs selling tablets at similar price points and assuming those companies make money. Yet, making a profit on tablets with cheaper components does not mean a higher quality tablet makes money at the same price point.

        Regarding size: Do you think customers look at a Macbook Air and say, “I’ve been looking for an aluminum laptop, but Macbook Pro has too many ports and one optical drive too many” or are they buying it “despite” finding the missing parts as limitation, but put up with it, because MBA is lighter and thinner? If dimensions and weight did not matter, why would they buy an MBA? Tablets at the same thickness and weight as laptops had been around for what, a decade, before iPad. They did not take off. Many many people have mentioned the weight of iPad for why they prefer dedicated e-readers for book reading. Are these proof enough, no, well, let’s see, iPod Mini had far smaller storage space than iPod classic, but it sold far more. iPod Nano had even less storage than a Mini, it became even more popular.

      • the importance of thinness in a tablet is not necessarily the thinness itself. It’s that making it thinner generally makes it lighter assuming all else remains equal.

      • vincent_rice

        “Then again, I don’t see thinness as relevant at all for a tablet, either.”
        – seriously? That’s a very odd statement.

      • obarthelemy

        how so ?

    • “There are rather nice 3rd- or 4th- tier 7” tablets (… sold for less than Amazon’s and Google’s, and those are not loss leaders.”

      In the words of Steve Jobs, those products are s**t.

  • theothergeoff

    one thing for smart phones is that there is often a carrier contract barrier of entry as a phone. People were locked into subsidy/contracts, especially those first 2 years in the ATT exclusivity era had to wait. There is a noticeable ‘knee’ in the curve at 6 quarters, which would be the confluence of 3G availability, app store availability, and the termination of many subsidy/contracts.

    The iPad was unencumbered by this, both in the US and global (as stated above, you don’t need a mobile network to use a iPad), as well as having a ready set of applications (skills as a ‘job applicant’), and it also came in at a price that was exceedingly competitive to the current tablet and laptop space (compared to the iPhone entry price).

    Thus I see the iPad likely flattening out sooner, although I sense it driving down the price of personal ‘computing’ to a level that makes its penetration much broader than PCs (a 3 iPad househould would not be unusual… a 3 PC household is/was extremely tech/nerdy)

    • “a 3 PC household is/was extremely tech/nerdy”
      I am not sure about that.
      All my friends have 1+ PC person in their house. That is, each person has his/her own PC and some have two (one personal and one supplied by their employer).
      I think the differentiation (between households with fewer PCs and those with more) is based more upon income than tech/nerdiness.

      • Stefan Popescu

        How many households have you seen where two or three years old kids have their own PC’s / laptops?
        How many households with kids as young as two or three who DON’T use Ipods/Ipads do you know of?

  • YipYazoo

    Horace, have you factored in the possibility the iPad mini could, in one form or another, be integrated into the dashboards of vehicles? And by this, I mean officially integrated by the manufacturers and allow controls like telematics, HVAC, sat-nav, entertainment, voice-control, etc.?

    Granted, many of the features I mentioned can be done via a iPhone, but the whole point is to have everything neatly and elegantly designed with the iDevice in mind… I like the convenience of dropping a pin, on a place-of-interest on my iPhone, then later hop in my car and conveniently find it as a choice of recent destinations on my vehicle’s iDevice. Or syncing new music/videos via Wi-Fi, thus giving into Junior’s instant-gratification need to see SpongeBob SquarePants latest episode NOW in the family’s SUV.

    • Bleakvision

      I have been wondering about this since the first gen iPad. Car Entertainment systems have terrible interfaces and lag years behind technologically.

      But if they used iPads they couldn’t charge 1200$ for a clunky, outdated navigation system with basic media functions and that “beautiful, high res” VGA resistive touch screen.

      • YipYazoo

        Well, I don’t know about that. Supporting a stand-alone device is one thing. But in this case, I think Apple would have to support this “Embedded iDevice” for at least ten years, the same as widely used embedded operating systems like Windows CE… Therefore, consumers should not expect to pay the same price as a stand-alone device. Indeed, I would expect consumers to pay at least a 50% premium.

      • Kizedek

        Why would it need to be “embedded”? Just provide a place for it to snap in place and sit, in place of the radio, etc. now. It could certainly be “bundled” with the car as an option — just as navigation and mileage computers are expected now.

        But if, anything, this would be cheaper for the car manufacturer and for the buyer, and be a real win/win all around. And why would Apple have to commit to any more support than usual, other than continuing to provide that form factor?

        First, the car manufacturer wouldn’t have to build or install a computer — Just a try or arm that holds the iPad. It would be up to the car manufacturer to commission and develop an app that talks to their car systems — that’s what should be given 10 yr. guarantee of support. The “car’s” iPad should be removable — that would give it far more value and functionality than one embedded and built into the car. You may well give your “car’s iPad to your child for the back seat in one year and get a new one yourself for the dashboard. And Apple already gives knowledgebase and forum support for hardware that is more than ten years old. If a car manufacturer preordered thousands of new iPads they will get a discount, not be charged a premium. Win win all around.

        I don’t understand your point at all… First you enthuse about iPads in a car as something new and wonderful, but then you see them “embedded” into a car much as some systems are now and this totally negates the value and functionality that using an iPad could bring to the whole concept and value proposition.

    • Stefan Popescu

      We are building automation software and parts of the application requires having an end user terminal – basically a kiosk type of device.
      Before the Ipad we had to use Windows XP embedded into clunky and overpriced tablet like devices and the cost was anywhere between $900 to $2000 /device or so. The end result was not beautiful and a nightmare to support. We were considering RIM’s Playbook to replace that at one point. But the Ipad mini will just rock. Beautiful + much much better device, support directly from Apple to the end users + beautiful, beautiful price…
      Your next car will be built for the Ipad mini – bye bye dashboard, DVD, radio.
      The only thing I’m missing in the Ipod / Ipad / Iphone is the FM tuner really …

      • “Your next car will be built for the Ipad mini – bye bye dashboard, DVD, radio.
        The only thing I’m missing in the Ipod / Ipad / Iphone is the FM tuner really …”


      • YipYazoo

        I certainly hope so, Stefan. It seems to make sense for Apple to get into vehicles, but it has to be said there is an incredible amount of work that needs to be done, including the realization that they will need to support the system for at least ten years. The same term support Microsoft does with the likes of Windows XP Embedded and Windows CE.

      • Noah Berlove

        It used to be that if you wanted to do anything custome like this, you were pretty much limited to Windows and often custom hardware. Just look at all the kiosks, POS terminals, vehicle mount computers, etc. Now you just need to encase an iPad and which is much less expensive than any of the old solutions.

      • Doesn’t this require jumping a lot of regulatory hurdles?

  • Laura

    Horace, do you have a view as to why Apple seems to always run into supply constraints whether its iPhone or iPad production despite all the efforts by Tim Cook and team to actively manage it, but Samsung doesn’t seem to have the same issues ? (and I believe Samsung has a bigger volume ?)

    • I wouldn’t be so sure Samsung’s volumes for any particular product are comparable to iPhone volumes, especially with the high end products more-or-less comparable to Apple’s. They sell more “smartphones” worldwide, but the data I can recall says a lot of those are much lower-end models than the flagship products. And they make a *lot* of models.

      Apple also seems to run into supply constraints mostly when they make use of new technologies that aren’t in common use (e.g., CNC-milled aluminum casings, new LCD resolutions and structures, etc.) The only comparable case I can think of for Samsung was their use of OLED screens, which they are the leading manufacturer for. And even there, their volumes were pretty small to start with, letting them ramp up the production lines.

      I recall discussions from a couple years ago about Apple being interested in OLED screens, but there simply wasn’t enough production capacity to meet the required volumes. (I also recall that some Android phones announced with OLEDs (LG?) wound up switching back to LCDs due to inadequate supplies.)

      So I think the answer here is that Apple tends to pioneer new technologies fairly frequently, which gives them a market edge. For Samsung, OLEDs *maybe* count as similar. I’m not sure how many OLED phones they actually sell in a year, though.

    • Samsung does not sell 30 million Galaxy S III in one quarter. The components that go into an iPhone (latest generation) tend to be custom-made for that product and not “off-the-shelf”. Samsung sells a broad spectrum of devices many of which use components from a parts bin that has been “commoditized”.

  • @Horace, I was interested in using one of your images in blog, I’ve seen others do this but I try and respect copyright. Tried searching your site for some usage guidelines but couldn’t find any. Is it cool as long as I provide a linkback?