The Apple iPad Trends
Since our first iPad trends report, published in October 2010, the device has
continued to break boundaries. As Apple’s most successful product in its first year
on sale, it would not be an exaggeration to say that the iPad has revolutionised the
personal computer market and the technology industry as a whole.
In just under a year on sale, upwards of 14.8million iPad’s have been sold around the
world, with 7.3 million being sold in the 2010 Christmas quarter alone.
“We are ring on all cylinders and we’ve got some exciting things in
the pipeline”
Steve Jobs, Apple CEO
• iPad is fast becoming the most popular mobile device
Morgan Stanley analyst Katy Huberty projected 16 million iPads would be sold in
the first 12 months alone. In fact, approximately 14.8 million were sold in the fi rst
nine months on sale. These gures, released by Apple, suggest iPad sales will in fact
exceed her predictions.
Previously, a Yahoo survey stated 35-44 year olds made up the greatest proportion
of iPad owners, but according to a Neilsen Company report conducted in December
2010, 25-34 year olds now make up the core ownership of iPads.
Adage have reported in January 2011 that 90 percent
consumer awareness amongst people surveyed. The same studies also found 21% of
18-34 year olds intended to buy an iPad.
According to figures published by the app store analytics company Distimo,
Gaming apps maintain the highest proportion of apps for the iPad, however they
do not account for quite such a high proportion of all apps. Gaming apps now represent
only 23 percent of all iPad apps.
• iPad is becoming a major gaming platform
The decline of Netbook sales reported in the Q1 ndings appears set to continue
in 2011. Acer’s sales manager has stated that this year “tablet launches will begin
a gradual replacement of Acer’s small laptop-style netback computers, in line with
market demands”.
• iPad is creating a netbook sales drop
Despite the unprecedented initial magazine app sales reported in the quarter
one report, the extremely high launch sales of a number of high pro le
eMagazines somewhat distorted their rate of adoption on the iPad as a whole.
More recent studies have shown that these gures have dropped after the initial
issues. Mashable.com has reported that sales performance of eMagazines on
the iPad roughly correlates with the title’s performance on the news stand, which
show a higher initial sales for launch.
• iPad is changing the rules of digital publishing
While there is no direct update to the research from Distimo, which reported the
average iPad app costs $4.67, they have released an encouraging report which
states that: “paid downloads increased almost 30% more than free downloads in
the top 300 in December 2010 compared to June 2010”.
• iPad apps are bringing in more revenue for developers
and publishers
• iPad internet usage is at a par with traditional PC’s
It was previously reported that 50 percent of the Fortune 100 were using iPads for
commercial use. Far more impressive figures announced by Apple now state that
over 80 percent of the Fortune 500 are currently deploying or piloting the iPad.
• iPad is becoming adopted for commercial applications
In the past 12 months, application downloads from Apple’s App Store have
skyrocketed. Figures published by Apple state that seven billion apps were
downloaded from the store in 2010 alone, with the achievement crowned by the ten
billionth download in January this year.
Such rapid growth of Apple’s app market in 2010 can in no small part be attributed
to the iPad’s popularity during the same period. According to research carried out
by The Neilsen Company, 91 percent of iPad owners have downloaded at least one
application for their device, with 63 percent of those downloading a paid application.
Apple’s App Store continues to
dominate the app store market
“Many are wondering if the app frenzy we have been witnessing is
just a fashion, and, like many others, it shall pass. We do not think so.”
Stephanie Baghdassarian,
Gartner Research
“The App Store has surpassed our wildest dreams”
Philip Schiller, Senior vice president of worldwide
product marketing, Apple Inc
“We estimate that Apple’s App Store… will remain the single bestselling
across our forecast period”
Carolina Milanesi, Vice President,
Gartner Research
The iPad’s popularity has no doubt been a factor in Apple’s continued dominance
of the app market. Gartner research found that 9 out of 10 app downloads of an
estimated 8.2 billion were from Apple’s app store.
It is therefore no surprise that the same research company are forecasting App sales
of $15 billion in 2011 – a fi gure that is nearly triple the $5.2 billion Apple made from
the App store in 2010.
Source: The Nielsen Company
While upfront payments for purchasing an app were the primary source of revenue
for iPad apps in 2010, research by the analytics company Distimo has identfi ed an
increasing trend towards revenue generation via in-app purchases.
“Apple will be the number one platform for a long time from a developer
perspective, they have gotten so many things right….And paid content
just doesn’t work on Android.”
Peter Vesterbacka, Developer,
Angry Birds
In-app purchases on free apps accounted for 15 percent of total
app revenue on the iPad. This figure was up from 7 percent in June
2010.
In-app purchases on paid apps accounted for 14 percent of total
app revenue. This fi gure was up from 5 percent in June 2010.
Distimo observed that developers were making a shift to free applications with
in-app purchasing as it allowed them to create revenue whilst harnessing the high
download rate of free applications.
This shift of both consumers and developers alike represents disappointing news
for the Android Market, where in-app purchasing remains unsupported. It may go
some way to explaining why Google’s Group Manager for the Android platform Eric
Chu, recently told a conference he was “not happy” with app generated revenue on
the platform.
The findings of this study are supported by research carried out by The Neilsen
Company, which found that iPad users were far more receptive to advertising than
users of other devices and that users were more likely to make a purchase as a result
of an advert on the iPad compared to any other device.
Source: The Neilsen Company
“Our iPad app is actually easier to use than our Web site.”
Han Yuan, Director of engineering,
platform business solutions and mobile at eBay inc.
As well as eBay, a number of retailers are hugely bene ting from the shopping
experience o fered on the device. Wine.com achieved over 8000 unique downloads
of their iPad app in the rst two months it was available. While Wet Seal, a retailer of
teenage girls apparel, has stated that whilst promoting back-to-school clothing, they
had close to 1 million out t views via the iPad app alone.
Forrester has examined the mobile tra c driven to its own retail site. It found that
45.5 percent of tra c driven from mobile devices was from the iPad.
“Publishers need to take digital seriously, they must make it the new
default for publishing, preparing for a day in which physical book
publishing is an adjunct activity that supports the digital publishing
business”
James McQuivey, Forrester Research
While 2010 will undoubtedly be remembered for the unprecedented success of the
iPad, it will also be considered the year eBooks (digital books) achieved success on
a major scale. Global sales of the eBook rose by approximately 400 percent and
achieved nearly $1 billion sales in the process.
In a year in which Amazon announced eBooks outsold paperbacks on its website in
the fi nal quarter of sales, ChangeWave Research indicates that the iPad successfully
claimed much of the eReader market from its more established competitors.
iPad is becoming one of the most popular eBook reading devices.
The growth of the iPad as an eBook reader appears set to continue into the decade.
An online survey conducted by The Bookseller in October and November 2010
forecast that eBooks would eventually be read primarily on tablet devices. Nearly
one third (31.8%) of respondents forecast that the iPad or devices like it would be the
most commonly used eReader platforms by 2015.
A survey by ChangeWave Research of 2,800 consumers suggests that these
predictions are well founded, and if anything, conservative in their forecasts, given
the projected adoption rate of the iPad as an eReader.
Since its introduction in April 2010, the iPad has established itself as the device of
choice for reading eMagazines and Newspapers in particular.
ChangeWave research found that iPad users are over three times more likely to read
magazine and newspaper content than owners of all other eReader devices.
The iPads dominance as a device used to read magazine and newspaper content is
even more impressive when compared to its main eReader market contender, the
Kindle. In a further study, ChangeWave Research found:
51 percent of iPad owners read newspapers on the device, while only
11 percent do on the Kindle.
36 percent of iPad owners read eMagazines on the device, while only 8
percent of Kindle owners do.
When examining the performance of the iPad in 2010, it is hard to conclude
that it has been anything other than an unmitigated success. It has surpassed
all sales expectations, driven record pro ts for Apple, and appears set to grow
at an unprecedented rate in 2011. It is also helping to generate revenue for
publishers, advertisers and retailers, in addition to being the consumer’s choice
of devices.
However, arguably the greatest impact of the iPad, is the shift it has engendered
in the technology industry as a whole. One must only look so far as the 100 or
more tablet devices debuted at the 2011 CES gadget show to appreciate the
transformative e ect the iPad has had on Apple’s competitors, hoping to take a slice
of the Apple pie.
For the iPad, the main issue of 2011 will therefore be in maintaining its market
lead, whilst making further in-roads in certain areas of the market. Publishing and
eCommerce look set to be industries in which the iPad will ourish in 2011, with
consumers and developers alike favouring the iPad above all other devices.
A number of commentators have shrewdly forecast 2011 as “the year of the
tablet”, however with rumours abounding about a possibly imminent iPad 2 release,
and speculation regarding the innovative features it may provide, all trends are
suggesting that 2011 may well in fact, be the year of the iPad 2.
