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The iPad is merely incidental to the rest of the ongoing discussion.

filed under , 4 April 2010, 18:12 by

The new drool-worthy gadget and media darling (The Tablet from the Mount, delivered to Jobs direct from a burning bush) is the iPad.

Woot. iPad.

so.

yeah.

##

let me insert here that I feel a loss whenever I have to blog about business (last post included) and I’d really much rather talk about mecha and panty shots, but apparently that’s not the hand I, as a blogger, have been dealt. If someone else with the requisite knowledge would care to tackle these topics in my stead, I’d be eternally grateful. anyway:

##

The iPad does everything my computer does (almost) but it does it Apple-style, so it’s slick and pretty. And touchy, in that it’s a big touch screen. And that’s about it.

I don’t need another computer (I’ve bought both a new netbook and laptop in the past year; and while I really, really want a new computer what I want is a 17” monster laptop with full keyboard—incl. numeric keypad—and enough raw power to leave even the largest L-Ion battery packs gasping after a scant 2 hours away from a power socket — this also means I’m really not the iPad’s target market).

The iPad is pretty. And it’s Apple, so I’m sure it works. But everything the iPad (or iPhone, for that matter) does, outside of GPS, I can do from any one of the three laptops I currently own— OK, so one of those isn’t a laptop, it’s a netbook, and the oldest will soon be passed on to my Mom, who has a fine desktop but wants a computer to use on the porch, when the weather is nice (or to use when Dad is hogging the desktop, which is often). But right now, when Apple is launching the iPad? I’ve so many portable computers I’m giving at least one of them away. I’m not Apple’s market — and there are a whole lot of people like me.

So this isn’t really a question of hardware, or a revolutionary new computing world:
it’s 60s style Mad Men product positioning. It’s a matter of marketing, unit sales, market share, and perception.

##

Let’s go back a bit, and weigh the perception and actual unit sales of a number of other handhelds, some considered successes, others (which still sold in the millions) considered failures.

and by hand-held, that’s exactly what I mean: the Nintendo DS plays games—lots of games—and does it exceptionally well, but doesn’t make phone calls. The iPhone plays games and makes phone calls, and a whole lot else, but I didn’t see a port for Chrono Trigger come out on the iPhone so obviously there are some trade-offs, features for performance. The PSP plays games and movies (in the close-to-useless UMD format) and can even make phone calls via Skype — or so I’ve been led to believe, but you don’t hear about the PSP owner who threw away his cell phone.

The iPad is a skosh bigger, but in function and application, it’s just another handheld.

Obviously, if one wanted to really judge a new handheld device, one can look at a whole menu of what’s possible: cellular phone service, wifi or 3G or WiMax connectivity, graphics performance, processing power, flash memory storage or SD card slots or micro hard drives or any combination of the three, real stereo speakers or a headphone jack or both, AM/FM Radio (or Satellite Radio for that matter if they don’t go out of business), digital TV Tuner (though not Satelite TV as I’ve never seen a dish smaller than a pizza box), GPS, accelerometers, cameras, microphones, keyboards or no, touchscreens or no, USB ports (or FireWire or eSata or USB 3.0 for that matter), Bluetooth, inductive charging, or even crap like speech recognition, the ability to scan a document to text just by taking a picture of it, or a handheld with either a flux-capacitor enabled time travel circuit or a hyperspace uplink to the main Hitchhiker’s Guide to the Galaxy servers…

I’ve a $60 “MP3 Player” (list price was more than $60 but that’s all I paid for it) with 8 GB of storage, a mic for live audio recording, an FM tuner—and the ability to record those FM broadcasts for later playback, and a USB port so I can charge it from my laptop, or even in a pinch use it as an auxillary USB thumb drive.

& I’ve a digital camera… that’s a camera.

And both of these devices have a lot of functionality that the new iPad doesn’t. Both plug into my netbook — Adding up the cost of netbook, Sansa Clip, and Panasonic Lumix I’ve still spent less than an iPad (with $50 to spare, even for the cheapest iPad) *and* I can go into a convention (and assuming I can find a wifi signal, somewhere) I can not only record audio interviews, take cosplay photos, and write articles for my website on an actual keyboard, I can post all that crap to the internet and look like a Blog-Star doing it. (with $50 left over for at least one bar tab)

If all I want to do is browse the web I need less. If I want to play games I can get a refurbed DS for a lot less — and I can play Chrono Trigger.

Even if I want to make a phone call: I can get a phone, a 1 year (pre-paid) service contract and the first 600 minutes (at least) for $99 bucks from at least three vendors.

So far, all the Apple has going for it is a big horking touch screen and not much else.

##

Yes, I’m being hard on Apple. The iPad is pretty, and it’s a fine piece of engineering besides, but it’s still a toy.

Play games, watch movies, browse the web: sure, fine, it’s perfect.

Get work done? Photoshop, video editing, writing anything longer than a tweet? Nope.

OK, so not many of us work online, what about casual computer use? Say you want to rip a CD to MP3 (or your codec of choice) — nope, not an option. Say you want to watch a DVD, not just online streaming (lagging, fragmented) video — nope, not an option. Say you want to email photos of the grandkids’ latest exploits to Grandma: not an option via USB *or* SD card slot.

I’m not talking about heavy lifting here, this is Saturday afternoon, common computer stuff.

No optical drive, no USB, no card readers makes the iPad a lot less than a netbook.

##

Say you want to read books in bed. Fine. Get a book. …or get an e-reader — or — get an iPad… hey, have we found the killer app? Reading books in bed, you don’t even need a booklight ‘cause the screen is backlit! woot!

Yeah, fine. Of course, I watch videos in bed, browse the web, even write blog posts — dragging a ‘whole, heavy laptop’ into bed isn’t the chore it can be made out to be. (even without a lapdesk… though a $30 lap desk is one of best investments I’ve ever made)


[imagine me in this otaku nest rather than me just taking a picture of it — OK, so that was harsh; imagine Brad Pitt using a laptop in bed]

What’s wrong with a hinge, and a keyboard, and a screen that stays up at an optimum viewing angle, hands free, by itself?

##

All my arguments (if they can be upgraded to that level; call them observations) will do little to change anyone’s mind on the iPad.

There are those who will buy (or who have already bought) this thing in the first week of release: They are the True Believers, and when Apple is declared the new state religion they will be the geniuses, templars, and inquisitors that make up the rank and file of the new ruling theocratic class.

There are those who had $500-$900 just knocking around and they’ll spend it this month on an iPad, rather than shopping the Sharper Image catalogue.

There are some who will be tricked, and who will like the new device but who would have been just as happy with a netbook or laptop. (…at these prices, we’re really talking laptop)

There are the gadget nerds and tech geeks who buy new stuff just because. They bought the Apple Newton, and can’t wait to get an iPad.

Quite a few folks will buy one; but will the iPad change the world?

##

Before the Tablet from the Mount, there was the Jesus Phone:

The Best estimate I’ve seen (from Wikinvest: see AAPL, iPhone, iPhone unit sales) is that Apple has somewhere in the neighborhood of 21 Million active iPhones, and has sold 60 Million iPhone Apps.

I’d like to note that the iPhone is still only one-sixth of the “smart” phone market — and that 16-18% of the market obviously isn’t a bad place to be as apple continues to make money hand over fist (2009Q4 profits of $1.7 Billion dollars)

(and it seems at least half—possibly more—of the country has a much better phone than mine)

See: Information Week, Mac Observer, Apple Insider

Business analysis from random websites is really more of a miss-than-hit proposition though [heh.] so we really should go to first sources to sort this out:

Sales, per Apple Prime:

Q1 2010
3.36 million Macintosh® computers
21 million iPods during the quarter,
8.7 million iPhones™

Q4 2009
3.05 million Macintosh® computers
10.2 million iPods
7.4 million iPhones™

Q3 2009
2.6 million Macintosh® computers
10.2 million iPods
5.2 million iPhones™

Q2 2009
2.22 million Macintosh® computers
11.01 million iPods
3.79 million iPhones™

Q1 2009
2,524,000 Macintosh® computers
22,727,000 iPods
4,363,000 iPhones™

Q4 2008
2,611,000 Macintosh® computers
11,052,000 iPods
6,892,000 iPhones™

Q3 2008
2,496,000 Macintosh® computers
11,011,000 iPods
717,000 iPhones™

Q2 2008
2,289,000 Macintosh® computers
10,644,000 iPods
1,703,000 iPhones™

Q1 2008
2,319,000 Macintosh® computers
22,121,000 iPods
2,315,000 iPhones™

Q4 2007
2,164,000 Macintosh® computers
10,200,000 iPods
Quarterly iPhone™ sales were 1,119,000 iPhones™ in the quarter, cumulative fiscal 2007 sales at 1,389,000.

[™ and ® Apple Computers, as they seem to insist on it.]

##

Yeah, I know you can’t be bothered to do the math, but I hope your eyes didn’t glaze over; here are the totals for the 10 quarters (2½ years) since the launch of the iPhone:

42.5 Million iPhones. That’s going to be a world-wide number (though the initial iPhone launch wasn’t world-wide, it is now) and that’s total sales; doesn’t include folks who upgraded over that 2 year period.

at the same time: Apple sold 25.6 Million Macs and 140 Million iPods. (while I think the doubling of iPod sales in Q1 2010 has a lot to do with the availability of the iPod Touch, there’s a lot to be said for $99 iPods too)

The US population is at 309MM at the moment (and always rising) but we’ll use the 309 number for the mathy-bits that follow:

If each iPhone purchase represents a unique & active subscriber then 1 person in 7 in the U.S. owns an iPhone. Actually, it’s about half that (per links cited above) so overall iPhone holders represent only 1 in 15 U.S. citizens. Which is about the same ratio overall as the Greater New York Metropolitan Area compared to the rest of the United States.

That’s the overall iPhone market; and we’ll come back to that later.

Compare to the Nintendo DS, which has shipped 40 million units in the same 2½ years and which has to date, apparently, sold 125 million units world-wide — though only 45 million total to the US. That is to say, there are at least as many DS units out there as iPhones (and up to 6 times as many), but no one geeks out about how DS is a paradigm shift — and I’d also like to note that a Nintendo DS is much more likely to be passed on to a younger sibling or relative (or sold, via Game Stop or eBay) while a used and obsolete iPhone, well, isn’t.

Also the Sony PSP, considered by many to be both a failure (in comparison to the DS) and something of an only-sony-PS-completist-or-hobby-gamer gadget, but which has in fact sold 17 Million units in the US. (and benefits in the same way as the DS from the secondary market)

SO: 17 million units is a ‘failure’ if the platform also fails to capture the popular imagination, while 22 million units (just 30% more) is a success if it is ‘popular’, even if it underperfoms and does less — while a system half as capable that just plays games will sell more than twice as much as either – if the games are good.

##

Let me change gears from electronics, where the best I can do is look up stuff on google and wikipedia, to publishing where I suffer the same limitations but can speak with more authority:

A lot of hay has been made in the past year with Kindle comics and iPhone Comics. [we’ll set to one side that neither Amazon or B&N has been willing to part with actual unit sales numbers for their e-readers, which means it’s a lot less than 20 Million—a lot less—if you ask me, but without responsible corporate reporting, here we are]

Let’s look at the numbers discovered above: iPhone ownership (between 22-42 million, depending), overall population (a pretty solid 309MM at this point, no arguments), the DS ownership (40MM), the PSP base (17MM), the unknown Kindle base (5 Million, 10? —I’ll be charitable and call it 10) and who knows what else for the rest: a half million nooks? That’d be 100,000 units sold each month since it was announced. A half million Sony Readers? More? Less?

While B&N is a sleeping giant, with a lot of potential (said the B&N employee, so get your block of halite) even if nook is making headlines, it’s nothing compared to the rest of the handheld market. Kindle is actually changing behaviors in some (small) publishers, and is a new factor to reckon with for all of the majors — their response differs, though the big news this past quarter is that they are now willing to engage. The DS is a non-issue, even with the new DS XL and an announced package of (public domain) ebooks coming out. If anyone besides me ever mentioned the PSP in the same sentence with “electronic books” this would be the first time I’d heard of it.

But even before the iPad launched it’s been ‘e-book’ and ‘new media’ and ‘death knell’ while simultaneously being a ‘renaissance’ and ‘new publishing model’ and all that crap you can get away with, blogging about rumours and wishes when your purported ‘topic’ isn’t even an extant device yet.

Cory Doctorow (at Boing Boing) has had the best post [so far] on why you shouldn’t buy an iPad, with a sideline in why it won’t work as advertised for publishers.

I’ll back off of the gloom and doom [though, disclaimer: I don’t use iTunes and have never felt the lack] and we’ll instead consider Apple and iPad’s victory over the mainstream media, tech blogs, and public opinion as a fait accompli: The iPad/iPod Touch/iPhone are now our new default platform, and we’d better abandon our antiquated 19th century models and welcome our new 21st century overlords.

Sure, fine, whatevs. That United Apple Platform is, at best, only 44 Million (one person in seven, in the U.S.) and while it will grow, how do you get your product out to the other six?

In practical terms, and until Apple sells a buncha more iPads, you’re limited to the operational iPhone base (21-22MM) which means your market at launch is just half — and if your media is graphics intensive or otherwise relies on the larger format and interface of the iPad, your market today is effectively nil, no matter how many people just bought iPads, as you need to clear your app past Apple gatekeepers first and then you need to sell it.

I’m sure some Apple nerd will chime in on the comments, “But you’re forgetting about factor X or constituency Y! Your numbers are off!”

Of course my numbers are off: only a fraction of the Apple user base, no matter how we define it, is interested in books, and of that a fraction of a fraction wants digital comics, and of that it’s a fraction of a fraction of a fraction interested in digitized manga. (There’s still money to be made here, even on the fringes: ask Yamilla – but a niche of a niche of a niche isn’t the best way to replace a moribund, five-century-old publishing model. 44 Million Apple-gadget-loving-Apostates aren’t going to change the publishing industry either.) iBooks as an iTunes-analog only takes us so far as well: iTunes is fine, but a lot of us would prefer to shop a website as opposed to download an application and the walled-garden approach failed at the beginning of the web revolution (after some initial success); I predict it will fail again (though Apple stands to make a lot of money in the interim)(and Apple will likely survive, where Prodigy and AOL failed).

There are trends bigger than Apple, the iPad, and e-books — and bigger than publishing and printing technologies, too:

Ideas will out. Art is more basic than speech.

Print is under attack for the first time in 569 years. …but the whole of human knowledge and culture is more than just print. The foundations are shifting; but it’s happened before and likely will happen again and it took centuries the last time and if we manage to find a new ‘normal’ mode in less than a century we’ll be doing quite well. And I only bring this “paradigm shift” up as a topic of conversation to immediately shoot it down: the cultural tide began to shift when the web launched, the fall of media (or their transformation) also began decades ago: the iPad is neither revolutionary or a ‘game-changer’ in this much longer shift; the dialog began long ago and Steve Job’s iPad is just chiming in at the last minute with a eager adolescent’s admonition, “Hey you guys, you guys, what if we tried this?” and if it does in fact work, kudos to Jobs/Apple, but you’re showing up in the fourth quarter with just 2 minutes left on the clock: we’ve been playing this game for years and the outcome has seemingly been foretold since the first 5 minutes of play.

The Internet is the game changer; in as much as the iPad facilitates access to the internet, it’s part of that revolution. Anything that takes us back to 1992, in terms of access or content, is just a speedbump, soon to be overcome and just as easily forgotten.

I see more potential in the Google Chrome OS (software, applicable to any number of devices) than in yet another Apple hardware handset, no matter how spiffy, as the iPad is just an iPad, and can’t scale past the number of iPads sold.

##

Here’s numbers:

If you want to sell crap on the iPhone/iPad (rather than just generically sell stuff ‘on-line’) you are in fact limiting your potential customer base; rather than 309 Million U.S. inhabitants, or the estimated 800 Million English speakers world wide, or an even greater number who’d be interested in your work and willing to translate it, the Apple User base is just 22 or so million; 1 person in 15 [in the U.S.]. That’s like just selling to folks in New York. If we’re being generous, it’s like selling to just the folks in New York and L.A. — sure, it works, and you’ll make a little money and the critics will notice you: but do you really want to restrict access to just 40 million potential customers — or restrict access to just those customers who have already spent $500 of their discretionary income just to get through the door?

If your answer is ‘yes’, well, good luck and Gods bless. It’s one business model, certainly. But there is bound to be another model that engages the other five-sixths of the U.S. Market (and even merely in English) another half-billion customers besides.



Comment

  1. “…as the iPad is just an iPad, and can’t scale past the number of iPads sold.”

    That’s the best point I’ve read yet. Anything else I could say would just rephrase what you said.

    Comment by Kenny Cather — 6 April 2010, 11:03 #

  2. I’m far more likely to buy the DS XL for myself ( as the kids already own a lite and i version) and read books off of that. I have a cheap cell phone and a good camera. There is nothing the ipad or touch for that matter can offer me. I’d only be wanting more. Actually a full tilt boogey Windows based laptop is more to my liking. This is probably heresy from a person whose kids go to the elementary where the Woz sent his son.

    Comment by madrona — 7 April 2010, 21:23 #

Commenting is closed for this article.



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