iPad:One Year Later

Raven ZacharySmall Society

Web 2.0 Expo30 March 2011

Photo by Willis Lim

Raven Zachary

@ravenme

Before a line of code is written...

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A Show of Hands Photo by Nick Bilton

Photo by Jeff Christensen

Elisha Gray Teleautograph

Photo from Oberlin College Archives

Photo by Tobias Hilsen

• “An utter disappointment and abysmal failure.” (Orange County Design Blog)

• “Consumers seem genuinely baffled by why they might need it.” (Businessweek)

• “Nothing more than a luxury bauble that will appeal to a few gadget geeks.” (Bloomberg)

• “Insanely great it is not.” (MarketWatch)

• “My god, am I underwhelmed.” (Gizmodo)

iPad Announcement Commentary

Source: David Pogue, New York Times

Photo by Dan Nguyen

Photo by Randy von Liski

Is there room for a third category of device in the

middle?

Yes, but...

ExistingMarket

ExistingMarket

NewMarket

Far better at some key

things

WebEmail

PhotosVideoMusicGamesBooks

etc.

“Nobody needs a tablet. So why are we gobbling them up?”

- Brian X. Chen, Wired.com

• Video

• Web browsing

• Email

• Periodicals

• eBooks

• Games

• Social Networking

• Education

• News

• Music

iPad Usage Survey, wired.com

Sources: Various

2010 iPad Unit Sales Estimates

0

3

6

9

12

15

ACTUAL Jon Gruber Various Forrester Jason Snell Andy Ihnatko

Mill

ions

of U

nits

Shi

pped

The tablet is now a proven market. This is not a fad.

...and this market is impacting other markets.

Netbook Growth

Laptop Growth

Device Cannibalization

Tablets in Context

• 14.78m sold in 2010, during 9 month period (April on)

• Fastest selling consumer electronic device (before the Microsoft Kinect)

• More than every Tablet PC ever sold

• $9.5bn in revenue for Apple

• “Post-PC” Era

• Part of the iOS larger ecosystem

iPad Success in 2010

0

50

100

150

200

Q2 ‘07 Q3 ‘07 Q4 ‘07 Q1 ‘08 Q2 ‘08 Q3 ‘08 Q4 ‘08 Q1 ‘09 Q2 ‘09 Q3 ‘09 Q4 ‘09 Q1 ‘10 Q2 ‘10 Q3 ‘10 Q4 ‘10

14.79

7.46

3.27

000000000000

60.2

47.2

42.7

38.0

33.0

20.0

17.015.0

13.0

7.5

5.44.33.21.00

89.6

73.4

59.350.9

42.133.4

26.421.2

17.413.0

6.15.43.71.40.3

Apple iOS Units (in millions)

iPhone iPod touch iPad

Sources: iPhone & iPad - AppleiPod touch - estimate by Raven Zachary and Apple

160+ million iOS devices and growing

Mill

ions

of U

nits

Shi

pped

Sources: iPhone & iPad - AppleiPod touch - estimate by Raven Zachary and Apple

9%

54%

37% iPod touchiPhoneiPad

Apple iOS Market by Device

160+ millioniOS devices and growing

Sources: Apple, Nintendo, Sony

Portable Gaming Market (Total Units Sold)

0

50

100

150

200

iOS Sony PSP Nintendo DS

Mill

ions

of U

nits

Shi

pped

Since2004

Since2005

Since2007

(2008)

0

100000

200000

300000

400000

Apple Google Nokia RIM Microsoft10,00016,121

43,535

280,000

350,000

App Store Apps by Platform

Source: Various, Q1 2011 data

0

17500

35000

52500

70000

Apple Google Nokia RIM Microsoft00

019

65,000

App Store Tablet Apps by Platform

Source: Various, Q1 2011 data

Android Marketplace Tablet Apps

Source: Justin Williams, carpeaqua

CNN AppElectrum Drum Machine/Sampler

Speedx 3D Grocery iQ

Vendetta Online Google Body USA Today WeatherBug

Flixster AccuWeather Thumb Keyboard DrawFree

TouchDown DueToday Opera Draft Manager 11

QuickOffice NY Times Conqu

• “Thinner. Lighter. Faster. FaceTime. Smart Covers. 10-hour battery.”

• 2x CPU, 9x graphics

• Video mirroring

• Evolutionary, not revolutionary, but...

• Retained price points ($499 to $829)

iPad 2 Overview

• Low-res cameras

• No retina display

• Out of the box activation not available

• 18 configurations - color, network, storage

• No Flash support

• No 4G network support

iPad 2 Complaints

• Too early to tell

• Only 20 days on the market in the US

• Only 6 days in 25 additional countries

• 500k units first day estimate (source: Gene Munster, Piper Jaffray)

• Mall of America: line 3x

• 5th Ave Apple Store NYC: line 1.5x

• Demand > Supply

iPad 2 Sales Data

“iPad 2 isn’t just the best tablet on the market, it feels like the

only tablet on the market.”

- Joshua Topolsky, Engadget

That’s because the tablet wars have not yet begun.

0

3

5

8

10

Q3 ‘10 Q4 ‘10

0.3

0.1

2.1

0.1

7.3

4.2

Global Tablet Market Share

iPad Android Other

Source: Strategy Analytics

Mill

ions

of U

nits

Shi

pped

3%

13%

84%

iPadAndroidOther

Global Tablet Market Share - 2010

Source: Strategy Analytics

99.7% of people still haven’t bought a smartphone or tablet yet.

Source: RBC Capital Markets

The Competitors

• Not open source...yet.

• Limited hardware partners (Motorola, Samsung, LG)

• Delays will hurt tablet adoption

• “To make our schedule to ship the tablet, we made some design tradeoffs.” Andy Rubin, Google

Android 3.0 “Honeycomb”

• Android 3.0 (Honeycomb)

• 10.1” display

• Verizon partnership

• Retail distribution

• 4G upgradeable

• $599 / $799

• Release date: March 27, 2011

Motorola Xoom

“Motorola’s Xoom is iPad’s first real rival.”

-Walt Mossberg, WSJ

• Android 3.0 (Honeycomb)

• 10.1” and 8.9” displays

• Tab as family of devices

• Older generation in 2010 (2m units)

• Price TBD

• Release date: Summer 2011

Samsung Galaxy Tab

• webOS (Palm)

• 9.7” display

• Positioned for enterprise and consumer

• Touchstone sharing

• No cellular model

• Price TBD

• Release date: June 2011

HP TouchPad

• BlackBerry Tablet OS (QNX)

• 7” display

• Positioned for enterprise and consumer

• Runs Android apps in virtual machine

• Price $499 and up

• Release date: April 19, 2011

RIM BlackBerry PlayBook

Tiny!

...and everybody else.

...and don’t forget these guys.

• Custom hardware

• Excellent brand recognition

• Retail distribution

• Android Appstore

• Payment infrastructure (Apple has 200m iTunes accounts)

• Books, music, movies

• Content distribution rights for Kindle

• Can afford low to no margins

Is Amazon the real iPad threat?

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Apple iPad Motorola Xoom RIM Playbook Samsung Galaxy Tab Other

8%3%3%4%

83%

Tablet Planned Purchasing

Source: ChangeWave Research, 3,000+ respondents, Feb 2011

• A year later, iPad has serious competitors pending

• Rapid adoption of Android

• Margin vs. market share challenges

• Retail distribution impact is serious

• iOS 5 - software leapfrog?

• eReaders move into the tablet space

• Apple retains aggressive component discounts

2011 Tablet Market

• iPad 70-80% market share (IDC)

• iPad 68% market share, 29m units sold (JP Morgan)

• iPad 36.5m units sold (iSupply)

2011 iPad Estimates

One year with the iPad.(How did I do?)

Oops.

It is a laptop replacement (for me).It is not a computer replacement.

Developers and designerswon’t have this option as easily.

I travel lightly.

• iPad

• Power cable

• VGA connector cable

• Headphones

• Business cards

• Pen

• From 17 lbs. to 4 lbs.

• Airport security is easier

All day withno charge

A few hours +a power cable

Photo by David Wright

The art of café bathrooms

Home

Work

Travel

• Threaded conversations

• Unified inbox

• Still no filtering or rules

• Moved from POP folders to IMAP server folders

• Gmail web app for iPad is good

• Not a good power user app, prefer desktop

Mail

• Presenter mode improvements

• Presenter notes support

• Multitasking support

• Improved importing reliability

• Still not a great presentation authoring tool

Keynote

• iTunes sync

• OS updates

• Some websites (Flash and JavaScript)

• Some documents

• Printing (partially solved)

• Backup

Additional iPad Limitations

Always in my bag.

I have one at the office and one at home.

Always with me.

iPhone iPad Mac

PlayRead

Consume

WorkWriteCreate

ConnectAlertCheck

iPhone iPad Mac

Creating Mobile Apps Based on Behavioral Patterns and Specialized Platforms

Today, Next,This Room

Venturing Beyond the App Store

Tomorrow, 9:05am, Keynote Room - 3rd Floor

Redefining Zillow In A Mobile Era:When A dot com is No Longer A .com

Tomorrow, 9:50am, Keynote Room - 3rd Floor

Tablet Success

Tomorrow, 10am, Keynote Room - 3rd Floor

Cheating in Mobile

Tomorrow, 11am, Alcove 4

Touching Stories: Designing Digital Magazines for the iPad

Tomorrow, 1pm, This Room

Raven Zacharyraven@smallsociety.com

@ravenme (Twitter)

www.smallsociety.com

Th

an

k y

ou

!