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The iPad discontinuity

iPad sales were unexpectedly slow in Q1. Tim Cook explained it as follows:

iPad sales came in at the high end of our expectations, but we realized they were below analysts’ estimates and I would like to proactively address why we think there was a difference. We believe almost all of the difference can be explained by two factors.

First, in the March quarter last year we significantly increased iPad channel inventory, while this year we significantly reduced it.

Second, we ended the December quarter last year with a substantial backlog of iPad mini that was subsequently shipped in the March quarter whereas we ended the December quarter this year near supply demand balance.

We continue to believe that the tablet market will surpass the PC market in size within the next few years, and we believe that Apple will be a major beneficiary of this trend.

Tim Cook went on to say “over two-thirds of people registering an iPad in the last six months were new to iPad”

In a later discussion, Luca Maestri said:

As Tim explained earlier, our iPad results and the comparison to the March quarter last year were heavily influenced by channel inventory changes. Specifically, this year we sold 16.4 million iPad into our channel and sold through almost 17.5 million, reducing our channel inventory by 1.1 million units.

Last year, we sold over 19.4 million iPads into our channels and sold through 18 million, and therefore increased channel inventory by 1.4 million units. As a result, the year-over-year sell through decline was only 3% compared to the sell-in decline of 16%.

We exit the March quarter with 5.1 million of iPad channel inventory which left us within our target range of four to six weeks. iPad continues to lead all other tablet by far in terms of user engagement, size of ecosystem, customer satisfaction and e-commerce.

In a later Q&A:

Steven Milunovich – UBS Securities: Tim, I understand that the iPad is not as weak as it appears on a sell-through basis, but still it’s relatively flat over the last year in terms of sell-through. What are your thoughts in terms of why that is and can that accelerate with Office on the iPad going forward?

Tim Cook – CEO: It’s a good question. Let’s talk about iPad a little more than we did in the comments.

When I backup from iPad, here is what I see. It absolutely has been the fastest growing product in Apple’s history, and it’s been the only product that we’ve ever made that was instantly a hit in three of our key markets, from consumer to business including the enterprise and education.

And so, if you really look at it in just four years after we launched the very first iPad, we’ve sold over 210 million, which is more than we or I think anyone thought was possible at that period of time. It’s interesting to note that that’s almost twice as many iPhones that we’d sold in a comparable period of time, and over seven times as many iPods as we’d sold in the period of time.

So, I think it’s important to kind of to put that in perspective. We’ve come a long way very, very quickly. Looking at it by market a bit, which I think is important. I think Luca mentioned a little bit of this in his comments. In the education market in the U.S., we have a 95% share. So the focus in education is on penetration, is on getting more schools to buy and my belief is the match has been lit, and it’s very clear to the educators that have studied it is that student achievement is higher with iPad in the classroom than without it. So I’m confident we’ve got a really great start in education far beyond the U.S. now. This is happening in many, many parts of the world.

In the enterprise market, we’re seeing virtually all, 98% of the Fortune 500, they’re using iPad. We’re seeing – according to Good Technology who looks at activations of tablets – the latest data we have from them is that 91% of the activations of tablets in enterprise were iPads. So this is also an astonishing number and many of those enterprises are writing apps that are key proprietary apps for running that business, and this is great for that company because they’re more productive as a result of that. So once again, just like in education in a way, what we have to do in enterprise is focus on penetration, it has to be deeper and broader.

But in terms of having people begin the process, beginning writing apps, we’re doing a pretty good job of that. In the retail market, if you look at the U.S. as a proxy, the NPD numbers for March just came out a few days ago and we had 46% share and embedded in that 46%, there’s a lot of things in there that I personally wouldn’t put in the same category as iPad, and that are weighing the share down. It’s certainly a market we wouldn’t play in and in a type of product you would never see an Apple brand on. So, we feel like we’re doing well there.

Office; I believe does help. It’s very unclear to say how much. I believe if it would have been done earlier, it would have been even better for Microsoft frankly, there is a lots of alternatives out there from a productivity point of view, some of which we brought to the market, some of which many, many innovative companies have brought. But I do see that Office is still a very key franchise in the enterprise, in particular. I think having it on iPad is good, and I wholeheartedly welcome Microsoft to the App Store to sell Office. Our customers are clearly responding in a good way that it’s available. So, I do think it helps us particularly in the enterprise area.

The other things you look at on iPad that are just blow away its customer [satisfaction], is 98 [percent]. There is almost nothing in the world with a 98% customer sat and the intention-to-buy numbers look good with two-thirds of the people planning to buy a tablet or planning to buy an iPad. The usage numbers are off the chart, far and exceeding Android tablets, four times the web traffic of all Android tablets combined.

So, when I backup from all of these, I feel great. That doesn’t mean that every quarter, every 90 days is going to be a number that everybody is thrilled with. But what it means to me is that the trend over time – over the arc of time, that things look very, very good, that iPad has a great future. And of course the thing that drives us more than any of this are the next iPads if you will, the things that are in the pipeline, the things that we can do to make the product even better, and there is no shortage of work going in on that nor any shortage of ideas.

So when I backup from all of this, I can’t help but still be extremely excited about where we are. I think we did a reasonable job of explaining what we think the disconnect was between what we had expected, which we hit it at the high end of our expectation and the street’s view of this one. I believe the vast majority of it is that first thing was just channel inventory that maybe we should have been even clearer on last quarter to take into account. But I’m very bullish on iPad.

That’s quite a long set of explanations for was essentially was a flat quarter for the iPad. I can’t add more to this, but I do want to focus on the bold part of the quote above. “But what it means to me is the trend over time – over the arc of time, that things look very, very good”.

How can we see the long arc of time?

The tool I’ve used for this is the measure of penetration. Historically products which become “mainstream” or widely adopted follow an S-curve during that adoption. The curve is remarkably predictable given a limited set of points. I’ve discussed how the adoption of smartphones is predictable in the US, EU5[1] and how even particular platforms might be predictable in the context of rates of adoption.

We are fortunate that data also exists for tablets. The Pew Research Center’s Internet & American Life Project has published a short history of tablet adoption in the US. I’ve plotted this data and imposed an S-curve on the data which fits it rather closely.

The results are shown below:

Screen Shot 2014-04-30 at 10.49.58 AMIn the graph on the left, the blue bars represent actual measurements of penetration (18+) while the black curve represents a best fit for the adoption rate.

Note that I’ve added the launch dates of all the iPad models and sectioned the curve into adopter categorization on the basis of their willingness to adopt.

I’ve also drawn a dotted line on the point where we are in the present.

In the graph on the right I’ve also duplicated the data using the transform of penetration to log scale penetration/(1-penetration). This shows the relative fit of the data in a more visually comfortable way.

 

The usual caveats apply:

  • This is US only
  • These are adults only
  • The iPad is not the only competing product

Nevertheless, this is a fairly strong proxy for the market. First, because the US has been leading adoption of almost all consumer product categories in history. Second because adults are a representative sample of users and third because iPad is market share leader.

What the penetration data shows is an extremely rapid rate of penetration. In comparison with the smartphone, the tablet is rising much faster. This is shown below:

Screen Shot 2014-04-30 at 10.59.16 AM

 

They are likely to saturate at around the same time but the tablet started much later.

So how does this explain the slowing iPad sales?

It’s possible that saturation for tablets could come well below 100% and that we are on a different curve than the model above. However, the ubiquity of the product and broadness of appeal, even within non-consumer (i.e. education and enterprise) makes it difficult to reconcile. In addition, the penetration data is self-evident. It’s improbable that penetration goes to 42% as it just did, and then stops suddenly. These decelerations of adoption have been observed historically but they are usually explained by cataclysms such as wars and economic contractions, neither of which are affecting the US right now. If a product solves an important “job to be done” then it gets adopted in a predictable way by a given population.

The anecdotal evidence provided by the company and others coupled with the survey data collected for the population of US users implies that the iPad is solving numerous important jobs and is therefore continuing on a predictable trajectory and that a discontinuity has not occurred.

Management started by saying the iPad sales volume was not surprising to them and that they have not changed their long-term expectations. The penetration data seems to support their confidence.

 

Notes:
  1. And UK specifically and several broader global regions []
  • willo

    I think a lot of people expected Apple to do more with the iPad Air/iPad Mini retina launch.

    It was the first time an iPad used the same processor as the iPhone. (Not faster as before).
    It did not include TouchID (which many was hoping for)
    It did not make improvements on the front/back camera.

    As a result, I´m sure a lot of potential buyers decided to wait for the next generation iPad before upgrading.

    • http://twitter.com/LunaticSX Lun Esex

      “(Not faster as before)”

      The launch of 4th gen iPad with an A6X actually trailed the iPhone 5 with an A6 by two months. For those two months the iPhone actually had a more advanced processor with an A6 than the A5X in the 3rd gen iPad. Then afterwards the processor was the same except for the GPU in the A6X. In other words, not a really meaningful distinction.

      From this point on anyone who thinks the most recent iPad is going to have a processor more advanced or significantly faster than the one in the current flagship iPhone is likely to be disappointed.

      • willo

        Every time the iPad was released, it had a faster processor than the iPhone. That changed with the iPad Air.

      • StevenDrost

        I think your referring to a faster GPU in the A5X and A6X. The CPU speed was the same. It did not translate into better performance, just a adaptation to allow it to handle all the extra pixels. Your statement would be true for the first and second gen Ipads which had the A4 and A5 processors.

      • willo

        A6 vs A6X, 100mhz more clock speed, twice the amount of memory bandwidth and a much improved GPU.

      • handleym

        iPad Air has a 1.4GHz CPU, iPhone 5S has a 1.3GHz CPU.
        You may complain that the iPad’s CPU should be even faster, but it’s not correct to say that it’s “the same” CPU as the phone.

        A better criticism, IMHO, would be that the iPad Air shipped without TouchID. IMHO this was forced on Apple, a consequence of not having enough of the relevant HW available. (IMHO this same parts shortage explains a lot of how the 5C was launched.)

      • Mark Jones

        The iPad Air A7 can and does run at higher clock speeds (up to 1.4GHz) than the A7 in both the iPhone 5S & iPad mini w/retina (up to 1.3GHz). This difference has always been true — 1.4GHz A6 in iPad 4 vs. 1.3GHz A6 in iPhone 5, as well as for the previous processors (1GHz A5X/A5/A4 in iPad 3/2/1, respectively vs. 800MHz A5/A4 in iPhone 4S/4, respectively)

        See anandtech (dot) com iPad/iPhone reviews for more.

        EDIT: Lun Esex is correct though about the timing such that the fastest iPhone was faster than the fastest iPad from September to November in both 2012 and 2013.

      • http://twitter.com/LunaticSX Lun Esex

        Processor in iPhone 5: 1.3 GHz A6 – September 2012
        Processor in iPad (4): 1.4 GHz A6X – November 2012

        Processor in iPhone 5S: 1.3 GHz A7 – September 2013
        Processor in iPad Air: 1.4 GHz A7 – November 2013

        Two years in a row the iPad’s processor upgrade vs. the iPhone’s was: Not earlier. Not more advanced. Not the same speed.

        FWIW, the iPad (3) had a 1.0 GHz A5X, so for two months after the release of the iPhone 5 the iPhone actually had a processor that was both more advanced (A6 vs A5X) *and* faster (1.3 GHz vs 1.0 GHz) than the iPad’s. For all the public knew, this was going to be the situation until a new iPad launched six months later in the typical March/April timeframe. This doesn’t appear to have significantly impacted iPad sales at the time, though.

    • http://www.isophist.com/ Emilio Orione

      I agree, it is Apple itself that is treating the iPad as a secondary product with respect to the iPhone.
      The iPhone always has the latest technology first, and with TouchID the iPhone was the only one to get the technology.
      It makes sense since the replacement cycles are quite quicker for the iPhone and so the iPad can have a slower update cycle from Apple, but while current users wait more for the replacement in any case, new users could choose to stay with only the iPhone while they wait a stronger iPad.

  • http://www.isophist.com/ Emilio Orione

    Nor there is a strong competitor eating iPad’s sales, not even at the horizon.
    We continue to see android and windows tablets failure not success.
    The ecosystem is also without competition with very few android tablet apps and a great number of iPad apps, with a lot of quality apps.
    Without real competition, problems for the iPad could come only by new computing way of use, like using smartphone instead of tablets.
    Is this happening and slowing iPad’s sales, are smartphones good enough?
    I don’t think so, it is not the screen real estate that matters, it is the app, the software that satisfy use cases and iPads apps allows more productivity than iPhones apps.
    Perhaps Apple should differentiate even more the platforms, giving more computer power to iPads and more iOS features, iPhone for quick tasks, iPads for more in-depth work.

  • markwilcox

    Looks like this is where the growth went:

    https://twitter.com/BenedictEvans/status/461250510473789440/photo/1

    Decent looking copies of the iPad came faster. I’m not sure I could count how many times I’ve heard someone say they “got an iPad but not one of the Apple ones”. While the copies may have looked decent and cost less, functionally they’re a world apart.

    So the tablet market continued the growth trajectory but Apple’s share dropped significantly. Tim Cook is right not to consider many of the things counted in this market as really being in the same category. The question is can they successfully communicate the difference?

    The usage statistics show this explanation is quite plausible. Will people that bought a “non-Apple iPad” come back soon and rectify the mistake, or will they give up on the category for a while?

    • iObserver

      Take that graph with a grain of salt given that the only actual data points are iPad numbers. All the rest of the tablet numbers are estimates at best. At worst they are remarkably ill-conceived guesses passed-off as credible.

      • iObserver
      • markwilcox

        Actual numbers are unknown, the general theme that Google Android has sold more tablets than iPad (or at least a similar number) is not widely disputed I don’t believe. Nor is the fact that AOSP tablets have sold more than either of those. Some of these things are sub-$45 it’s not surprising they are selling quite a lot of them.

      • iObserver

        You place far too much faith on internet rumor. None of these things are known and when the light of truth occasionally shines on these sorts of things it turns out these estimates are wildly overstated. Additionally, many of these estimates are published by factually, indisputably biased companies who generally work for Apple’s competition.

      • markwilcox

        OK, Benedict Evans is one of the most respected mobile analysts – Horace has had him as a guest on his podcast. He’s using numbers from IHS, who would generally not be considered an OEM partisan rumour monger. If you think those numbers are based on internet rumour then nothing else will convince you otherwise. :)

      • iObserver

        I’m not going to debate the who’s who of analysts. What I’m saying is the only numbers on that graph that are known are iPad numbers. If you or anyone else can show me a single shred of factual proof supporting that graph or any other tablet sales numbers I’d be willing to entertain the idea. Until then it’s just a graph of real numbers vs. guesstimates.

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

        Some estimates of tablets shipped are based on the number/size of glass panels manufactured by suppliers.

    • alj_disc

      what are those tablets other than androïd, that are the majority and nobody has ever seen ? This graph is junk without verified sources

      • markwilcox

        Almost entirely non-Google Android. i.e. low cost Chinese ODM tablets using AOSP for the most part. If tiny number of surface tablets.

      • alj_disc

        came back when you have verified sources for that. Because so far nobody showed those. The point is that such a number of tablets should appear in many places like web usage and they dont.

      • markwilcox

        Pretending cheap Android tablets don’t exist or aren’t selling in large numbers because there aren’t any verifiable sources is burying your head in the sand. Benedict Evans describes them as “Dark Matter” because they are almost impossible to measure accurately (so many vendors, most of them not public companies even and so many channels) but lots of credible sources have worked on reasonable estimates. Many may be abandoned, many are given to children for games and video and many are indeed used as portable TVs.

        There is zero chance that the web usage share reflects the actual market share. The web usage share shows an important difference about who buys iPad’s versus these other tablets and what for but it doesn’t mean the others didn’t sell.

      • handleym

        Oh, they exist. Look at this sort of thing:
        http://www.phonearena.com/news/Tablet-priced-under-100-at-Walmart_id43354

        And that’s just in the US — there are vastly more in Asia. They all suck, they’re all basically useless except as a TV viewer. But that’s OK, since since that’s precisely what they’re bought for.

      • Walt French

        Meanwhile, let’s add up the number of Android® brands we DO know about. There aren’t that many partner companies and all the news is about AOSP/forked tablets undercutting Samsung on price.

      • obarthelemy

        Even GMS tablets undercut Samsung these days. Samsung have become the Apple of the Android world: very high quality/features (for their high end Tab Pro and Note lines), but outrageously priced (across the board, even their *not* high end straight Tab line).

        Asus, Lenovo, and LG are where it’s at for brand-name Android tablets these days. Sony if you really want looks and a name. Lenovo’s Yoga in particular.

      • orthorim

        Agree the graph is junk, just like those phantom tablets which may or may not exist.

        I like to personally see some evidence too and what I see is that there’s tons of tablets being used in public and 90% of them are iPads. The other 10% are Samsung. There’s also kindles but I wouldn’t count them in the same category – all the kindles I ever saw where ebook readers. Never seen a Kindle Fire out and about.

        This is what I see day to day on the street. Obvious conclusion is that something is wrong with that graph. I don’t know what – but it doesn’t fit with empirical observation.

      • obarthelemy

        Non-Google (GMS) Android.

    • handleym

      The tablet space is currently poorly analyzed because many of these devices are not direct competing.
      In particular many tablets (Android and most obviously “Other [which equals Amazon Fire]) are bought as TVs and eReaders. This is a fine job for them to do, and many iPads were bought to do those jobs when the iPad stood alone.

      However being adequate as a video screen is not the same thing as having a rich app ecosystem.
      To the extent this matters, iPad is playing a different game from the Android tablets. BUT DOES it matter? I remain unsure of this. My personal suspicion (but it’s only a suspicion, I have no data) is that it actually doesn’t matter that much, that most people buy tablets (including iPads) primarily for media consumption. The other apps are nice for occasional use, but they are not essential, and aren’t deal breakers.

      Things like MS Office are betting that I’m wrong, that people are willing to put up with the hassle and slowness of using a small touchscreen rather than simply use a laptop. Obviously my guess is that they’ll lose this bet, that in five years “productivity tablets” will be seen to have been a fad like netbooks. We’ll see.

      Assuming I am right, then, how does Apple compete? Not on apps, so by having better hardware than everyone else. A snappier CPU, a nicer screen, TouchID, a decent audio system (quad speakers, one in each corner, so stereo works properly in all orientations) etc. They are partway there, but not really committed. My hope is that they appreciate this soon and realize that they can no longer skate in this space purely on the strength of the app ecosystem, because that just does not matter for a large fraction of their would-be-buyers.

      • markwilcox

        I’ve been using a retina iPad mini for productivity related tasks as well as media consumption this year. It works well when mobility is more important than productivity. I sometimes use the tablet to write via a bluetooth keyboard, which effectively makes it a netbook.

        Apps in some categories make iPad’s clearly stand out and provide fantastic value. Kids educational apps are one area where iOS is miles ahead of Android. Audio apps of many kinds are another niche that is unlikely to see serious competition.

        All that said, I do suspect the iPad is going to be a significantly smaller business than the iPhone at saturation. For basic media consumption (e.g. web, video, eBook reader) it’s going to be impossible to sustain premium pricing and high market share.

  • claimchowder

    Is it even necessary for Apple to develop the iPad into a more widely adopted platform NOW? They have no real competition in the tablet sector they target (the high end). The only viable alternative (Android) has essentially no tablet optimized software and a very small range of enterprise applications.
    Customers have a limited amount of money to spend every year. It may be in Apple’s best interest to keep their powder dry for later, when more serious competitors to iPad eventually develop and smartphones are more commoditized than they are now.
    Then they can keep their competition at bay with whatever they are developing now, but aren’t showing to the world yet.

    • StevenDrost

      While it is true that there is no competition in the tablet space, I would say the true IPad competitor is the PC. In that context, the more roles the IPad can assume, the more powerful it becomes , the more potential customers.

  • El Aura

    Penetration is one thing, sales are another, as they depend on replacement cycles. which can be longer than for phones (certainly because there is no $500 incentive every two years, but also because the iPads are already good enough for a lot of people. Until very recently, Apple still sold the iPad 2 and it still sells the original mini, indicating that those designs are still very satisfactory for a lot of people. iPads also break less often than phones (which are carried around and dropped much more) and also less often than laptops as they have alomost zero moving parts.

    • Sam

      I had the same thought. Anecdotally, in my house someone upgrades their phone every year but were all still on iPad 2’s which were purchased not long after that model first came out. We’re early adopters, but by this point in the phone cycle I’d already upgraded once. Despite being skeptical of “phablets” I do wonder whether a bigger-screen iPhone will scratch the itch and leave the iPad 2 lingering even longer in the household. Schools and businesses are nice, but Apple is really about personal consumer appeal in order to get the volumes.

    • Fran_Kostella

      My understanding was that the iPad2 was retained so long specifically for the educational market, where they prefer to have the same model available for years. If that is the case then I would expect to see Apple always keep one model around for a three year stretch.

      I do agree that iPads are durable, we have a variety of them and my teenage son still uses the first version iPad to browse the web and watch YouTube, despite having the latest mini. I had planned on attaching the old one to a kitchen cabinet to do the same web/video tasks, plus serve recipes and to generally use it as long as possible. I love upgrading them to get the latest hardware, but I have so many now that some of them just sit around, unused, that I’ve decided to wait another year to see what arrives. If a new form factor appeared (say 13″ or much a much lighter version) I’d jump at it, but last year’s retina models never feel slow so it is hard to justify an upgrade right now.

  • handleym

    Everything Horace says makes sense, but, IMHO, he’s explaining something different from what analysts and similar business types are worried about.

    For a simple-minded business person (“how many units will be sold, at what profit”, the important curve is not the penetration curve but it’s derivative, which gives us the units sold per year. If we’re at fifty percent of the penetration curve, from now on annual sales go down each year, not up. That’s only to be expected, but non-growth makes baby Wall Street cry.

    The above simple equation is changed when there is rapid turnover of a product, but iPads do not seem to be susceptible to rapid turnover. They are extremely physically robust (less likely to be broken than a phone) and if their job to be done is media consumption than the 1st gen remains good enough for video, while the 3rd gen remains good enough for eReader. There’ve been various good reasons for iPhones to turn over about every two years, whereas with iPads I’d expect the turnover rate is already at three years and that’s only going to lengthen.

    Meanwhile adoption by the poor world (ie beyond the saturated US/Europe/Japan) is more difficult for a tablet than a phone because it’s more of a secondary device. If you can only afford to buy one compute device of some sort, it’s going to be a phone/phablet, not a dedicated tablet. This will change over time as all those people saturate themselves with phones and can move beyond subsistence computing, and that may be part of what gives Tim optimism. But that’s a multi-year play, it’s not something that’s going to affect the numbers next year.

    • obarthelemy

      Good points. Tablets also mostly don’t get stolen, whereas nice phones do at half (?) their rate of breakage.

      But mostly, I’m not getting requests for upgrades even from people on very old tablets – my brother’s iPad 1, my sister’s TouchPad, my mom’s Acer something-something that’s 3 years old with broken HPs (she’s mostly deaf anyway, so… :-p). Even I myself, I want to buy me a new toy, but I can’t possibly justify switching out my Galaxy Note 10.1 2012.

      Interestingly, what inquiries I’ve had are about Windows tablets, because everyone has a pet app that’s Windows-only (my mom’s antiquated DOS Scrabble, my sister’s bureaucracy-imposed lesson planning/grading/pupil tracking thingamajig), and most people’s tablet use is so basic (mail, internet, skype, angry birds…) that any ecosystem will do.

      Apart from that “putting a real PC inside a tablet”, I’m not seeing anything driving people to upgrade. Maybe H.265; or Data becoming cheap enough (subsumed into a phone’s contract ?) to warrant upgrading to a data-enabled tablet just to stop having to bother with wifi settings or tethering when traveling ? Even gamers are mostly not adjusting the tablet to the game (as they do for PCs), but the game to the tablet… Other than that, tablets fully replacing PCs maybe, but that involves good docking options, a “desktop mode” in OS and apps… Win8 has that, Android most of it, iPad emphatically none of it.

      Seeing how things turn out will be interesting. I’m betting, mostly, on commoditization. There’s a reason everyone’s focusing on wearables, not revolutionary tablets, as the next big thing.

  • orienteer

    Ben Thompson wrote the other day about the iPad not yet having it’s killer app, although he didn’t use the term, but was observing that the pad form factor and its true functionality and usefulness won’t be understood for some time, and will come into its own via the apps that realize this potential. What’s striking to me is that this potential might presently even evade Apple, just as did the potential of the first Mac for desktop publishing rather than as a smaller Apple ll.

    • DrewBear2

      There will be hundreds of “killer” apps. Some already exist for music, art, accessibility, etc. Cook noted that “…many of those enterprises are writing apps that are key proprietary apps for running that business…” The same is probably happening in education globally. Both enterprise & education are slow to fully deploy. This is barely year 5 in a 15-20 year product arc. Apple’s confidence is justified.

      If the iPad team needs to worry about anything, it’s the Mac & iPhone teams. The $899 MBAir (even cheaper for education) and 4.7″ iPhone will vie for customer’s dollars that otherwise might go towards iPads. Apple really continues to impress across the three major product lines.

      • charly

        By definition you can’t have hundreds of “killer” apps.

        Enterprise like multiple suppliers which makes IOS position hard in the long run. Education is cheap. Will end up with the cheaper android tablets

      • DrewBear2

        Yes, thus the quotation marks. The point is the iPad does not need a killer app. What’s the killer app for the iPhone?

      • orienteer

        Jobs said the killer app for any phone was making a call. But 7 years later it’s probably proved to be texting. New apps will change our perception of the hardware.

      • JohnDoey

        That was a 2007 phone, before App Store.

        How do you get WhatsApp and other texting apps on iPhone and iPad? App Store. App Store is the killer app.

      • obarthelemy

        except all OSes can install apps ? How’s that new ? That Apple gets to censor what you run on your own device ?

      • censor

        What’s new is integrated payment and licensing handling and trust that installing software is easily reversible and has a very low probability of compromising your data, etc. That Apple gets to censor what you run on your device is part of this very important feature, yes.

      • obarthelemy

        If they did it for security, yes. But they do it also to lock out competitors and for random content they object to. And, again, Android in its most common, non-rooted, PlayStore only flavor, does the same, but it also gives discerning users an out.

      • censor

        The “way out” also leads to a lot of security and privacy issues.

      • obarthelemy

        Agreed. it’s only for sophisticated users.

      • Nevermark

        I agree – no killer app is needed once a platform has a lot of momentum.

        The point of a killer app is to convince a hesitant market that something new really is worth getting, but neither iPhone or iPad had that challenge. Many people “got” why they wanted one the instant they were released.

      • charly

        The killer app for iphone was a kick ass browser. For tablets it is the browser & gaming. But Android has that also and is much cheaper

      • JohnDoey

        If the Web is the killer app and Android also has it, then why do iPads represent over 80% of tablet Web traffic?

        If games are the killer app, then why buy an iPad at all? Windows has games.

        The killer app on iPad is App Store. Take it away and the whole iOS plafform collapses. iPad becomes as useless as an Android tablet. iPhone becomes as useless as an Android phone. There would be no reason to buy the Apple devices.

      • obarthelemy

        App Store is only killer because it is mandatory to install any app. Nobody answers “the App Store !” to the question “what do you do with your iPad ?”. That’s equivalent to saying Windows’ killer app is the app installer….

      • obtuse

        You’re probably being deliberately obtuse but obviously that was shorthand for the apps on the app store, and not the store itself.

      • obarthelemy

        If the killer app of iOS is that … it can install apps… that’s been a feature of OSes since… OSes appeared, since that’s pretty much what they’re for.

      • obtuse

        It can install apps from a pool of the highest quality mobile applications, and do so safely and reversibly.

      • obarthelemy

        Ditto Android, and, on the desktop MacOS and Windows. If *that* is the iPad’s killer app, it has a BIG problem.

      • obtuse

        Depends what you understand to be “highest quality” and “safely” and “reversibly”. Why did apps not really exist for desktop operating systems previously? Most people didn’t install any software.

      • charly

        Android has games, Windows does not have games (when used as a tablet)

      • DrewBear2

        “The killer app on iPad is App Store.”

        Yes. To be specific, the iOS App Store. Android tablet apps have NOT caught up to iPad apps.

        If you are in the 5% geeky minority, maybe you can optimize an Android or Windows tablet for your needs. But for the 90+% average consumer, the iPad’s UX and app options are better.

      • JohnDoey

        The killer app for all iOS devices is App Store. Whether a user recognizes it or not, in almost every case, they buy an iOS device to run App Store.

      • obarthelemy

        this is like saying that an OS killer app is that it runs apps. Not.

      • JohnDoey

        The apps on iPad and Android are a different kind of app. This is not said enough. Android apps are Java phone apps — iPad apps are native C/C++ PC apps. Enterprise wants PC apps, not phone apps, on their tablets.

        The way you can have hundreds of killer apps is is you out them all inside one killer all called App Store. It is the App Store app on iPad that is its killer app. Same for iPhone, which sold 6 million units before App Store was released for it, and a bajillion units after App Store was released.

        Apple changed the rules. Catch up.

    • obarthelemy

      From looking around me, no killer apps but 2 killer features:
      – portability (duh !) and all-terrain use (by terrain, I mean sofa, bed, poolside, bathroom, bus/metro/train/plane/café… where breaking out a laptop is a pain)
      – no admin nor training required. I get weekly calls about issues with the family’s desktop PCs, and barely any calls about issues with the tablets (apart from “How do I connect to my friends’ Wifi” ^^); and training is summed up in “this button takes you to the beginning, this button takes you back a step”, oh, and “here’s the power switch”, apparenly that’s an issue, I often put a sticker on the bezel to mark its position.

      • Kaleberg

        I like your definition of terrain. (I’m slouched in my couch as I type this.)

      • Kizedek

        Kind of catchy, too…
        “Terrain is where breaking out a laptop is a pain.
        Like, when I slouch upon my couch, now that’s terrain.”

    • JohnDoey

      The killer app on iPad is App Store.

      For a musician, App Store enables you to turn an iPad into a songwriting studio within about 5 minutes, with no risk of viruses and almost no risk of malware, and no I-T work. Safe, easy, cheap, fast. For every other human endeavor it is the same: 5 minutes or so and you have an art studio, writing studio, business PC, flight manual, Autistic communicator, video player, and so on and so on. All because of App Store.

      In theory, iPad could come out of the box with only the App Store app, and Safari and so on could be in App Store. The other built-in apps already being installed is a convenience. The killer app for all iPad users is App Store. Any app you personally need, as easy to buy and install and maintain as an iPod song. No I-T support required.

      This is the same as how the killer app for iPod was iTunes Music Store. Not one particular music album that all iPod users bought. Everybody did not buy an iPod because Beyoncé’s latest album was iPod-only — everybody bought an iPod to install their own personal custom collection of music to suit their own personal needs. Same as there is no one 3rd party app everybody buys an iPad for. They want their own collection of apps, chosen from the killer App Store app.

  • obarthelemy

    Or maybe it’s not about tablets in general, but about the iPad in particular having a hard time justifying high prices
    – in the face of Android tablets that are usually markedly cheaper (especially with more storage for more sophisticated users, and at the low end), offer more varied specs (pen, battery, form factor, phone, multi-windowing…)…there’s very little an iPad can do an Android can’t, and a lot Androids can do an iPad can’t;
    – and in the face of Windows tablets that support a very entrenched entreprise ecosystem.

    Also, no subsidies to hide Apple’s inflated prices.

    • Walt French

      Pretty sure that the iPad has been the high-cost tablet in the non-Intel tablet space, from Day 1. Your constant harping about its value (really, what does it do for you?) might be relevant to the circumstances if it had suddenly changed, or if the competitive landscape had suddenly changed.

      In fact, other data (from Creative Strategies’ Ben Bajarin, perhaps channeling IDC) *suggests* that while Apple has essentially flat-lined in trailing 4-quarter sales vs year-ago 4-quarter sales, those stats for the overall “tablet” marketplace are off 25%. With iPads a fair share of the overall market (and the stats are *truly*awful*), others would have dropped a fair amount.

      That would be the case if e.g., Amazon satisfied almost every customer who wanted a Kindle Fire, and sales have gone to a trickle. Or, if all the white-label tablets were used, and not recommended to friends. If people took a shot at Surfaces but had bought them to be an innovative laptop, finding them quite a step down as a laptop, and not really very useful for all the iPad type (specialized-for-touch or high-mobility) apps. Of course, Surfaces are such a tiny share — the last estimate I saw was fewer than 1 million in the just-ended quarter) that their sales don’t matter for these purposes, one whit. Or, of course, if IDC only has the faintest of clues about how many tablets were sold; sigh.

      Once you look at VERY different sales patterns — and patterns that are not complementary, suggesting consumers switch from one brand to another—I start thinking that “tablet— is too generic a description to be useful for penetration or market analyses. Some are bought simply to be children’s distraction/toys/movie players. Some are high-school workstations. Some are Amazon consumption end-points. Some are dedicated menus in airports. Some are pilots’ Electronic Flight Bags.

      The (original!) Law of Large Numbers suggest that all these different uses can be treated as a total, with little quirks in one or the other offsetting. I think otherwise. Maybe it’s smart to look at world car sales in total despite huge price differences, but that market has very few units in the high-price category to distort the rather stable average near the median. Tablets, however, started with the high-function, tablet-first iPad, was followed by a slug of very unsuccessful HP, BlackBerry and Xooms, then shortly after experienced a wave of very-low-cost tablets that anecdotally are mostly used for videos; finally well-designed and somewhat more ecosystem-complete Samsung and Amazon tablets showed up.

      Horace’s water-glass = kitchen-pot = bathtub = swimming-pool (they’re all water containers so they should be analyzed together) rejoinder, I’d split the category into three*: media-only, browsing-oriented and app-centric. The first two have complete ecosystems of SD cards and wifi connections; the last requires bespoke software and is the category closest to my interests; I acknowledge it probably has the fewest units today but expect as the consumer market matures, will pick up converts from the others. Of course, I don’t see data organized my way, but I believe thinking about it in these categories is helpful.

      * A fourth might be “generic office worker” and Microsoft should own this market. A report I saw today suggests that while office workers mostly want iPhones, 200 million of them want a Windows tablet. I mention this for everybody’s general mirth and mockery.

      • charly

        Tablets didn’t start with ipads. Ipad was the first mainstream successful tablet but there were many who tried it before (some not even that unsuccessful)

        Those 200 million will find out that there is no windows 8 tablet software and that it really needs Android (or IOS) compatibility layer

      • obarthelemy

        That’s exaggerated. Windows tablet software is mostly there, and what’s missing is more than made up for by the ability to run legacy apps/games.

      • why

        Why does nobody buy them, then?

      • obarthelemy

        6% share (that’s more than a fifth of Apple’s… not the same, but not an order of magnitude different, either), 20% growth in volume in q1 2014 (Android is up 50%, iPad is flat). Since they’re a very late comer, I’d give it a bit more time.

      • why

        They’ve also had high-profile models very publicly written-down and dumped below cost, so it’s hard to conclude anything from market share in a given quarter.

      • obarthelemy

        Indeed. Thank you for pointing that out.

      • why

        And, not to mention that your own link showed their “market share” is flat.

        http://www.fonearena.com/blog/102062/android-reigns-with-65-8-of-global-tablet-market-share-in-q1-2014-report.html

      • obarthelemy

        which is hardly a surprise with Android up and iPad down. Windows up, but less than Android -> share flatish.

      • Walt French

        That’s the quarter after a major revamp to the product line. Let’s take a look at a longer history, if you can help… I couldn’t find a good timeseries of estimates, and Microsoft is almost as tight-lipped as Samsung about releasing sales numbers of the RT and Pro.

      • obarthelemy

        I’m fairly sure Windows tablets are moving towards OEMs instead of MS. The chatter these days is about Asus (their $350 tablet + netbook !), or HP and Dell models at the higher end, not about the Surface, and not at all about the RT (either dead, or will come back once it’s fused with Windows Phone I guess).
        Maybe Entreprise is more MS-leaning than enthusiasts’ forums, but even forums are mostly populated by professionals.

      • obarthelemy

        Also, there’s a lot of lag, because apps need time to show up, and businesses decision cycles are longer – and Windows tablets make most sense for businesses. Worthy Windows tablets are just now coming out…

      • charly

        Legacy games without using keyboard/mouse is worthless. What is missing is the tablet games

      • obarthelemy

        But, that’s the thing: you can plug in a keyboard and mouse, say for serious gaming, where they are required. I’m still waiting for a nice Civ game on tablets ^^

      • Walt French

        At the instant you plug in or bluetooth your favorite mouse or keyboard, you’ve transformed that pretty nice tablet into a sub-par ultrabook. You’d do that if you really wanted a tablet (aka a keyboardless netbook) for enough circumstances to make up for the lousier netbook experience that goes with it. For example, watching videos of Federal Reserve news conferences (yeah, dull, dull, dull), I see quite a few reporters with a keyboard on their iPad. It’s not as if nobody does that sort of thing. But I’m guessing that Logitech isn’t doing a huge business in ‘em.

        There may be those use cases, but I’m not seeing that people who are so particular about good ergonomics and performance, would try to bridge what looks like a pretty big gap. Most people would pick one primary use or another and get the tool that does a fine job on that set of tasks, and possibly buy a second device if the other need is so compelling.

      • obarthelemy

        We’ve had the same situation with laptops and desktops: many people have switched to laptops full time, even when at a desk/table, either with a complete desktop setup to plug into (external monitor(s), keyboard, mouse, LAN, speakers, drives, printer,…), or nothing at all, or anything in-between, making do with a sub-par desktop functionality, performance, and/or with a very ugly setup. Might be a cost issue. Might be a practical issue (taking data back and forth, managing OS+apps… is a pain)….

        I’m sure we’ll see the same thing again, now with tablets and laptops and even desktops. Not everyone, but a significant proportion. Let’s face it: most non-pro uses don’t justify the expense and headache of more than 1 device, and many pro uses don’t either.

      • Walt French

        I made that laptop-only switch a while back and have it working well enough I haven’t felt the need for a tablet. Many others will go straight to a tablet. Those that do, probably won’t have a lot of legacy PC stuff that they want to bring with them; the PC—>tablet transition seems more jarring than I remember the desktop—>laptop one.

        Helps that I now prefer my laptop keyboard & trackpad to the standard-issue HP desktop’s peripherals I use at work. That’s kind of the opposite from the tablet world where you’d need to carry extra, loose peripherals to cope with the legacy apps that might be getting a little long in the tooth by now, anyway.

      • obarthelemy

        I guess keyboard and touchpad are a matter of habit or taste. I still miss trackballs, I probably should get one again, and I’m addicted to MS’s huge curved keyboards (a firm, clicky one would be even better ^^).
        I’m also very used to several screens: 2 on the PC, plus a tablet, plus a phone. That’s my daily driver, the tablet has replaced a 3rd screen. My brain probably hasn’t quite caught up to the concept of overlapping windows, so I need to splatter things within sight, or at least have low-priority windows peeking out from below more active windows. Also, big screens.
        In the end, my laptops are gathering dust 99.9% of the time. That may be a self-fulfilling prophecy: I don’t use them much, so I get them on the cheap side and they’re not nice, so I don’t use them much…
        My next project is to try and move more work to the tablet, but 10″ is darn small, and the 12-inchers from Samsung feel way overpriced. I’m also intrigued by the Windows ones. We’ll see.

      • Space Gorilla

        I have to say, I’ve been using a hardware keyboard case with my iPad 2 since the iPad 2 came out, and I love it. The combination of angled touchscreen and hardware keyboard is very comfortable to use. When I use my mouse on my iMac now it feels clunky. At client meetings I often make the mistake of trying to touch a laptop screen (clients usually have Windows laptops), and I find it annoying that I have to use a trackpad (ugh). Why can’t I just touch the screen and make it go like my iPad!

      • obarthelemy

        Most recent Windows laptops do have a touchscreen.

      • Space Gorilla

        Key word *Windows*. No thanks.

      • obarthelemy

        Oh, Apple… nah, I won’t comment ^^

      • Space Gorilla

        Whatever troll. I’ve used Windows plenty, the more I can avoid it the better. Microsoft lost me as a customer a long time ago. How anyone with taste can enjoy using Windows is beyond me. Life is far too short to not enjoy the tools you use.

      • obarthelemy

        Indeed. Like.. touchscreens ? :-p I’ll stop trolling now, promise.

      • Space Gorilla

        A touchscreen alone isn’t enough. It would seem all your taste is in your mouth.

      • obarthelemy

        On the other hand, the moment you rip off you ultrabook’s keyboard… you’ve turned it into a piece of trash :-p.

        People who, for whatever reason, prefer a single device to 2 of them, and see “tablet mode” as important, have no choice but to go tablet + keyboard. Or Lenovo Yoga (I think there are Android and Windows versions of those)), but those add other issues.

      • Walt French

        Legacy apps need a good keyboard and mouse. Surface tablets have passable ones, but then aren’t at all good for using in bed, on an airplane traytable, on the train or on the can.

        Microsoft tried, and failed, to create a market for touch-centric apps, by creating the Surface RT. But there’s very little — anything?—that you can do on an RT that you can’t do on any number of cheaper or more powerful devices; they have no reason to exist without a good collection of apps. Writing Win8.1 apps might be easier now, but the market share still isn’t there to support much work by developers.

        So the quick take on Surface is that the Pro is a very well-specced netbook—small screen, fair keyboard; modest disk—that are a bit lighter than an Ultrabook or MacBook Air that has many advantages once you’re already at a desk.

      • obarthelemy

        Legacy apps need good kb+ms **support from the OS**; the actual keyboard and mice are up to the users, Surface will take anything you fancy via USB or Bluetooth, on topof the mobile MS accessories.

        Indeed, Windows weak spot is actual tablet use. MS’s deep pockets will have to compensate for lack of punters for a good while… MS won’t give up anytime soon though.

      • charly

        Using an OS2 strategy would work by making Nokia Android work on Windows 8.1. Intel windows 8.1 tablets are cheap

      • charly

        Legacy apps also often need the extended virtual keyboard and not the standard windows 8 keyboard

      • Space Gorilla

        That report about the 200 million workers and Windows tablets is 15 months old.

      • obarthelemy

        Indeed, the value proposition has not suddenly changed. The competitive position has changed progressively though. As Apple mentioned in their own memo, competing ecosystems have caught up. Where 3 years ago Android tablets where inferior (no good parts left to build them with), had no tablet OS, no tablet apps, and no socially-valuable brand nor sexy design, all those issues have been fixed by now. On the other side of the spectrum, Windows tablets (which are not all Surfaces), for all their drawbacks, can do jobs no other tablets can, and run legacy apps. iPad has mostly stayed put while the competition was moving rapidly.
        I’m still trying to work out tablet market segments. Content creation (what you call app-centric ?) is sure one, which probably could also be called pro or prosumer. As for Media, Social, and I’d add Games, Communication, and Education uses, I’ve never seen a single instance of a “pure” user, it’s all mostly a bit of everything with different emphasis. And actual use seems to have little impact on tablet choice, with some people on the latest iPad Air sometimes mostly playing Andry Birds and reading Twitter and TMZ; and some people on 2-year-old $100 clunkers using them to remote admin servers and touch up photos or websites.

      • JohnDoey

        > media-only and app-centric

        You are talking about iPods and PC’s.

        There really should be a 7-inch “iPod video” but Apple has chosen not to do that. Likely to avoid confusion between that product and iPad. The same confusion we see everyday in the I-T press as they compare Android tablets (iPods) with iPad (a PC.)

        Right now we have one (1) tablet PC and that is iPad. The Microsoft Surface was an attempt to establish a second tablet PC platform. No Android vendor has made a legitimate attempt to establish a second tablet PC platform because Android lacks many basic PC features, like native C/C++ apps, basic security, centralized OS updates, a hardware abstraction layer, and standardized 3D API.

        The confabulations and pretzel logic we have seen from I-T press as they try to pretend iPod-class Android devices are PC’s in order to gin up drama and page views and pull in Samsung ads is like a death rattle for the entire I-T press. All credibility has been lost.

        The most basic PC feature is running native C/C++ apps because that is what all the PC apps are written in. Not Java (feature phone apps) and not HTML (Web apps.) That is why the Linux media player app VNC took one month to port to iPhone/iPad and 2 years to port to Linux-based Android. That is why there are MS-DOS apps and Unix apps and Windows apps on iOS: they are all native C/C++ apps and that is what iPad and iPhone run.

      • obarthelemy

        You fixation on “native” C/C++ is is misdirected:

        – language is of little relevance. I’d be hard-pressed to say which language my *desktop* apps are written in.
        – many language compile to C/C++ as a (sometimes optional) intermediate step. Does that make them “native” at some point ?
        – not all PC apps, by far, are written in C/C++. Most Mac apps are written in Objective-C, a lot of Wintel apps are written in Java or some .NET language (C#, VB…) or even pre-.NET languages.
        – iPad’s preferred language is Objective-C, not C nor C++
        – Language has very little impact on the end product. There are good Visual Basic (that’s worse the Java in you book, right ?) apps, and bad C apps.
        – “Native” doesn’t mean anything. All languages are either compiled or interpreted (or a bit of both) into native code.
        – Use of APIs, libraries (Unity, for gaming, works on iPad and Android, for example), garbage collection (iOS and Android both do that at the OS level) is very similar across the board.

        The proof is in the pudding, not in the recipe.

      • Walt French

        You make a good point. But in the phone space, the little CPUs are fighting for all the performance they can get. Consider my java-based network stock portfolio optimizer, with which I check a couple dozen institutional accounts every day for conformance to my strategy. The interface actually *IS* a bit sluggish, but it hardly matters; I mostly run it in batch mode each morning to pick up dividends that’ve been received, etc., and determining what stocks should be bought with the new cash, given policies, strategies, etc.

        The actual real work is performed by a couple of network servers running a highly optimized math program (CPLEX), … written in C because some of the larger portfolios aren’t deemed good enough until the server has thrashed on it (the problem is NP complete) for 20 minutes or so.

        That work would bring a phone to its knees; even the UX, were it written as casually in java, would be ugly.

        Desktop apps and phone apps are different. Phones are all about immediacy and responsiveness; quick start/pause/resume cycles. The higher performance specced into most high-priced Android phones substitutes nicely for the java overhead, and the Dalvik VM is fine software, but native software is still quite the deal.

        Meanwhile, tools such as Adobe’s that translate code into Apple’s language, are never used in performance-sensitive applications; they rely on having the OS’s underlying graphics routines doing all the heavy lifting. Even Google recognizes the overhead that their VM can impose on sensitive routines, and provide a “native” functionality that unfortunately is very CPU-specific as implemented.

      • obarthelemy

        I’m guessing your Java apps are interpreted and the JVM is launched when the apps needs it ? Both are not the case in Android: the latest version can compile code at install time, and the JVM is always-on.

        Languages, whether C, Java, Obj-C, VB… are all pretty much on an equal footing: performance depends on a) the coder b) the compiler c) cycle-hogging features such as garbage collection, memory protection, context saves… that are a language- or OS- intrinsic (iOS or Android both have the same policies regarding those; ditto Java and Obj-C, which is a melting pot of C and.. SmallTalk…for the java-like features: objects…)

        To make a whole argument that compiled Java is inherently, in all cases, lacking or inferior to C just doesn’t make an ounce of sense (to start with, because iOS is Obj-C, a whole different beast). As you say, most apps are developed with cross-platform toolsets (as far away from “native” as you can get) anyway; and then well-written, well-compiled Java code has no reason to underperform. I’ve yet to hear a single developer complain that Android is too slow. I even remember an HTML constultancy that made proof of concept FaceBook app in pure HTML5 to show off their HTML nous.

        Even further, once you compile on the device at install time, you get a chance to optimize to the exact hardware the app is running on. On the contray, having the apps be pre-compiled code either forces a one-size fits-all approach, or fragmentation into several binaries in the app store itself.

        I’m sure we all have bad memories from sucky Java apps. The interpreted, badly-written, run-time-JVMed ones that are *not* in modern platforms. I also have bad memories of C apps crashing whole computers… and it seems Obj-C apps crash several times more than Android apps ^^ (http://www.forbes.com/sites/tomiogeron/2012/02/02/does-ios-crash-more-than-android-a-data-dive/)

      • Walt French

        I understand that Androids run java VERY well. That said, there ARE significant language differences on mobile.

        A recent post about BlackBerry’s deprecation of Adobe AIR was a reminder how that cross-platform effort ended up a tough outcome. Adobe changed directions, and it was a problem for developers who’d hoped for a nice cross-platform solution.

        I *believe* one such app is Kenken, available on Android, iOS and the web in very similar interfaces. On the web, it requires Flash; I believe it uses AIR for mobile. I just ran it again and despite the multiple updates and iterations, the app STILL has an erratic UI — taps are poorly recognized when I choose a square to answer; once the tap IS recognized, it sometimes brings up a little popup chooser; sometimes not. Looking at my systems monitors, it appears that elementary play (hints, music etc off), it takes up a slug of CPU for a VERY modest game with no active animation.

        I don’t know precisely how it’s implemented, but it seems pretty obvious that there are big differences in basic app quality, responsiveness and CPU load, all tied to some common implementations.

      • obarthelemy

        While looking for objective performance benchmarks (for stuff like UI elements creation, scrolling…) I found that, which is unrelated but interesting: http://gamasutra.com/blogs/GreggTavares/20130619/194639/Android_vs_iOS_Game_Myths.php

        Still looking.

      • weakproxy

        What a bizarre article, in which they show zero data about the relative economic performance (only very weak proxies like install base and conversion rate) but make bold claims about it.

      • obarthelemy

        Actually they say that conversion rates and spend per converted user are similar… what more do you want ?

      • weakproxy

        Show me the part of the article that shows that “spend per converted user [is] similar”? I don’t see that supported by any of the slides. And of course, showing the delta in conversion rate is not at all helpful; if the conversion rate is 1% then a 0.4% delta is large, for example.

      • obarthelemy

        listen the the talk + read his answers in the comments.

      • obarthelemy

        You should try and forget that the conclusion is not the one you’d prefer, and just realize what that data is: interesting.

      • weakproxy

        I don’t prefer any conclusion, it just didn’t say what you claimed it did. If I were to express a preference it would be for this guy’s free-to-play trash game not to make any money at all.

        The data from two games is obviously not particularly useful to anyone, anyway.

      • obarthelemy

        It does, again, listen to the talk and read the comments.

        And it is, one in-depth story is more insightful than global stats, especially re: causality and self-fulfilling prophecies.

      • weakproxy

        Again, the article didn’t say what you claimed it did. Perhaps the video and comments do.

        “And it is, one in-depth story is more insightful than global stats, especially re: causality and self-fulfilling prophecies.”

        Obviously spurious assertion.

      • obarthelemy

        Yep. Sorry for reading all of it and clicking the links…

        Also, stats are not better than in-depth. Indepth gives insight, quantitative validates them (or not). But understanding starts with in-depth.

      • obarthelemy
      • Space Gorilla

        I believe that 200 million Windows tablet report is over a year old. Gruber linked to it. So we can see today that ‘report’ didn’t come to pass.

      • Walt French

        Thanks for pointing it out. I hadn’t noticed. Yes, general mirth and mockery; Gruber stands high on that scale.

      • DrewBear2

        “…’tablet’— is too generic a description to be useful for penetration or market analyses.”

        Same goes for “smartphone”.

      • Kaleberg

        I almost never use my Kindle anymore. I bought an iPad Mini. It does Kindle, and it does a whole pile of other stuff.

    • JohnDoey

      iPad starts at $299 just like all other PC’s. Comparing iPad to a $100 Android video player only obscures your view. It’s like comparing a Windows notebook to a portable DVD player. Both are clamshells with screens and optical drives and batteries, and there the similarities end. If you want to run full-size native C/C++ PC apps, your four choices are iPad, Mac, Windows PC, and Linux PC. Period. And they all cost about $299 to start. If you only want to run video, there are dozens of device types starting at $100. These are very different product categories.

      • obarthelemy

        The $130 Asus MemoPad HD7 (for example) is good for way more than watching videos. It’s of good quality, good performance, good screen, good battery, good looks… and as Apple themselves say, ecosystem has caught up.
        The “Android video player” myth fails to capture that actual good brand-name tablets with similar if not superior functionality cost about half as much as an iPad. Unless you fall into the very narrow categories of stuff only iPad can do (I’ve been inquiring about those for months now, list is… music creation. that’s it)

      • sales

        “The “Android video player” myth fails to capture that actual good brand-name tablets with similar if not superior functionality cost about half as much as an iPad.”

        How are they selling?

      • obarthelemy
      • sales

        Nothing in this report suggests these Android tablets are “good brand-name tablets with similar if not superior functionality”. Please follow a discussion on your own talking points.

      • obarthelemy
      • sales

        Samsung don’t release sales numbers, and the third party estimates of sales were found to be very unreliable during the Apple vs Samsung trials, with the actual numbers coming in well below these estimates. Even if the numbers are accurate this article itself says that “The devicemaker saw strong growth in the budget and mid-range market”, so the claim that these sales are of tablets that are “good” and have “similar if not superior functionality” is suspect, unless you believe every tablet Samsung sells fits this description, in which case we differ irreconcilably.

      • obarthelemy

        Please do tell how Samsung’s even entry-level tablets are not “good” and don’t have “similar if not superior functionality” ?

      • usage

        “Unless you fall into the very narrow categories of stuff only iPad can do (I’ve been inquiring about those for months now, list is… music creation. that’s it)”

        The focus on feature checklists is leading you astray. As we see from dozens of different datasets, even basic functionality like web browsing shows large usage gaps. Why is nobody even browsing the web on these other tablets? How much of their time are they spending on them? They may be cheap, but they don’t appear to be delivering the same value to the people who use them.

      • obarthelemy

        “stuff only iPad can do” is not about features, is about jobs to be done. I’m still taking contributions besides “music creation”, if you have any.

      • usage

        If a feature exists, but the interface and experience is so bad that it isn’t used, then it doesn’t create value. Android tablets aren’t clearing this hurdle for even basic tasks like web browsing, as mentioned.

      • obarthelemy

        Keep telling yourself that. While Android’s share keeps rising.

      • usage

        How do you explain these gaps to yourself? What are you telling yourself here?

      • usage

        Or, as an analogy, if what you hire to get your job done turns out to perform below expectations, you might find yourself firing it and making a different hire in future.

  • mk maersek

    I would expect the final penetration percentage to be lower because for many people the larger smartphones will serve as a tablet, so the line between tablets and smartphones will difficult to decide. I don’t see people in countries with limited disposable income springing for both a smartphone and a tablet.

    • JohnDoey

      But iPhones are more expensive than iPads, both in retail price and service plan. And an iPad can replace a TV and PC with little or no compromise. For me, if I had only one device it would be iPad mini.

      • obarthelemy

        You mean Huawei X1 ? :-p Wait, that’s me. Pondering my next tablet’s size: once your phone is 7″, even a 10″ tablet is not much of a difference. 12″ seems a lot though.

      • charly

        Ipad replacing a TV with little compromise? In what world?

    • KirkBurgess

      Its important to note the lack of wifi in the home for the vast majority of emerging market consumers. The lack of home landline based Internet access leads to no wifi. An iPad is vastly crippled without a wifi connection, and emerging market customers can’t afford a separate tablet wireless subscription for a cellular iPad. This is why phablets are more popular than tablets in emerging markets, even with a smaller screen they are infinitely more useful because of their always on Internet connection. This also explains why the vast bulk of emerging market tablet sales do not show up on web usage stats – it’s because they simply aren’t online. They ARE just glorified video & games devices with content sideloaded or downloaded at Internet cafes.

      Assuming the USA trend is representative of future emerging market penetration is not an assumption I would,make at this time.

    • obarthelemy

      There’s a continuity now, phones are anywhere between 3″ to 7″, and tablets from 7″ to 12″; and most data-enabled tablets even have phone function, and some people do use that…. a 10″ phone ^^
      The distinction is mostly one of use, the devices are mostly the same, especially now that tablets are going thin-bezelled too.

  • Sylvan

    Could it be possible that the adoption of tablets has transitioned from a rapid s-curve formula to a slow s-curve formula mid product cycle? This could be because the later adopters are having trouble with the price and seeing the utility of the product. If so we would still eventually get close to 100% adoption.

    • Walt French

      The logistics “S curve” is a great model for what’s happening in the real world, but when it doesn’t fit the data, we’d do well to understand the data better, not try to patch up the formulas to get the data to fit.

      A simple physical process that follows the logistic pretty well is spread of an infectious agent in a homogenous population that bounces around randomly. Say that any time an infected person bumps into a non-infected one, there’s a 1% chance of passing it along. So new infections as a share are some multiple of the percent already infected, times the percent not-yet-infected.

      Regards technologies, the populations are very heterogenous, with different susceptibility to catching the fever, and the random-encounter part is ridiculously incorrect, too—in any day I, for example, am at least a hundred times more likely to encounter an iPad being used than a farmer in Indonesia.

      For really big-picture purposes, or for understanding tablets vs PCs, the problems might be quibbles, and a couple quarters of stumbling off the curve won’t matter. All models are wrong but some are useful. But I think that any deviations are best understood as showing us how the model is wrong.

      To my mind, the JTBD is morphing very rapidly with tablets—the cheap ones were at first, almost completely focused on media-consumption (more flexible DVD players, if you will) while the slightly pricier ones were quick NYT/Kindle readers, with surfing and email on the side. Only once you get up the income scale to where somebody is employed as a knowledge worker do you have the need for GoogleDocs/Microsoft Office/iWork; these functions are both aimed at a limited subset of the population and also not sufficiently advantaged by mobility to overcome the crummier typing/display limitations — aren’t yet competing asymmetrically.

      By all accounts, only a small fraction of tablets are used for spreadsheets and long-form writing, while almost ALL corporate PCs—half of all PCs—are used for that class of task. Vertical apps are still being developed for tablets, so it’s unsurprising these tasks are off to a slower start. But I think that segment is nearing take-off, mid-range adoption. This, versus the media-reader/player market in the US might be nearing ITS saturation level, and the internet-centric players duking it out with cellphones: always-with-you versus easier-to-read when you sit down for a few minutes.

      One of the great features of the logistic function is not that different sub-markets, with different adoption rates, add up neatly into an aggregate S curve. So I think it’s natural to see little bumps and glitches, and my interpretation is that they’re showing us the trifurcated use-cases I just outlined above and elsewhere.

      And what does that show us? Apple has lost the low-income $150 video-player market (by not playing). It is at a price disadvantage and slight quality advantage for people wanting a range of browsing, tweeting, etc., so has a relatively low share where price-sensitivity is highest, and is popular (in eg the US) where customers want assurance of quality. And it has both BEEN successful and is still working hard — exactly all its ads and developer efforts are aimed at—to build up the iPad as an application platform for high-value usage. This is where it will continue to be most successful and profitable.

  • Judgeman777

    Esteemed commenters, can anyone tell me at what point in the diffusion of innovation paradigm was the iPad released based on the above graph? Innovators (2.5% or less) or Early adopter 2.5 to 13.5? Thanks!

  • JoNo

    I wonder how the longevity of the iPad may affect its rate of growth. For example, I have an iPad 2 that I acquired for work purposes and it has served me very well – to the extent that I don’t feel the need to upgrade to a newer model. And I still see others in business toting iPad 1s (though this is becoming rarer). Compare this with the cycle of replacement that you find with the iPhone, which tends to be at least two yearly due to carrier contracts. There appears to be a more relaxed curve in innovation around the iPad device itself than with the iPhone – fewer built-in redundancies if you will. Is there a way to strip out the number of repeat purchasing from the figures to compare how iPad and iPhone are moving through the population?

  • Kaleberg

    Judging from the article, it is quite likely the iPad is on track towards saturation. The analysis makes sense and the numbers look realistic. Tablets are on the march, so I keep seeing them everywhere. I was at a hair place and they had iPads stacked with the magazines in the waiting area. I was visiting wineries near Walla Walla and half of them had iPads for explaining wines and handling wine sales. I keep expecting them to show up at the local farmers’ market, though they’d have to have a scale to make that work. A friend of mine has one to follow sports scores while watching the game on his big screen TV.

    I fully expect Android tablets to outsell Apple tablets at some point. The problem is that when people spend their own money, they tend to buy Apple gear because of the “nice” factor. (Joel Garreau introduced “nice” in “Edge City” to explain why New Hampshire never caught on with upmarket sorts the way Vermont did.) Worse, those “nice” lovers tend to spend more money on applications, music, movies and the like. Needless to say, that spending encourages developers to build for the platform.

    If I were Hertz and putting a tablet in each rental car or McDonald’s putting one at each table, I’d buy Android. I’d be buying millions of them, so I could squeeze the pricing and not have to pay for things I don’t want. I’d be using bespoke software, so I wouldn’t have to worry about the lack of applications. If I wanted music or video, well, I’d be big enough to commission my own or cut a deal with the producers. Meanwhile, my wage slaves would be saving their pittances of a paycheck to buy Apple.