The iPad is not about the device itself but more about the way Apple is redefining markets
The iPad is not about the device itself but more about the way Apple is redefining markets
There’s obviously been a lot of noise about Apple’s very recent announcement of the iPad device with many technology and in particular Apple devotees out there salivating like excited Shar Peis. For me though, my interest was piqued not in the device itself but about the business of Apple and in their ways that they continue to use emerging technology to redefine technology markets.
Firstly about the device. Clearly a clever piece of positioning sitting between the phone and the laptop with a clear roadmap. They’ve announced version 1 without a camera and without a GPS. The lack of GPS in particular is interesting but will no doubt come reasonably soon particularly with growth in location based news and services markets.
Apple have seen Amazon’s Kindle carve out a nice niche in the eBook space over the last few months in particular. Overnight this segment has basically disappeared. Bad luck for those Amazon folks who make a living out of the Kindle device but you didn’t need a crystal ball to recognise that they only had a limited window of opportunity. Apple’s tie up with 5 major book publishers will ensure that the Apple bookstore will only be a success in the same way iTunes has changes the music landscape.
Another market segment that may vaporise quickly is the Netbook segment. This is another area where manufacturers such as Asus, Acer and others have done exceedingly well. As with the Kindle I can see their days as being numbered. Just over 12 months ago my wife and I were considering a purchase of an electronic photo frame. I convinced her that for just a few dollars more a Netbook was the way to go. The screensaver would show all of our family photos, she could setup her calendar to run the daily family life, she could browse the web from the kitchen, play music etc. She now loves it and can’t do a whole lot without it. I can see the iPad creating a whole new segment in acting as the hub for family activity. Apart from doing all of the above as a really fun experience, you can add in reading books, newspapers, remotely running Apple TV, AirTunes etc. All of this would be run from a docked, touch screen device that could sit tucked away in the kitchen. Samsung was perhaps onto something when they put a PC in a fridge but it’s taken Apple to take that concept into a device for every home. I can see every Mum wanting one of these.
The other piece of the puzzle that interested me was taking the concept of the cheap and somewhat disposable app from the iTunes App Store and extending that into traditional desktop software. I’m now used to just paying a few dollars for an app for the iPhone and with the iPad, Apple is saying spend $10 for iWork, KeyNote and Numbers and Microsoft wants me to spend hundreds of dollars on MS Office?
Perhaps most tellingly has been Apple’s approach to exposing its products to entirely new segments. For many years, Apple dominated a couple of defined segments, particularly graphic design and education but had never been able to break into the more mainstream PC markets. The iPhone exposed many millions to the ‘Apple experience’ and this has subsequently driven demand for Apple Macs, Macbooks etc. I can see the iPad driving this even further.
Finally, the real marketing master stroke is Apple is taking advantage of the position and leverage that the iTunes store gives them. They can offer the iPad at such a price that the mass will want one. Once you’ve bought an iPad, you’ll have entirely new market segments transacting in the App Store with Apple taking a clip on everything. It would not surprise me if Apple is subsidising the iPad hardware to leverage this position further. Nice work Steve.
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