In this third trends and statistics document, we will look at Apple’s current and projected position in the market and display that although Apple is set to face increasingly stiff competition; all signs suggest that the device will continue its tablet dominance for the foreseeable future
1. The Apple iPad
Trends and Statistics 3 November 2011
Brought to you by web and iPad publishing specialists
2. Apple iPad - Trends & Statistics “
“
The Apple iPad did to the tablet PC market what the
iPhone did to the smartphone market: re-invented it
Gartner.com
Going into 2012, The Apple iPad and The Apple iPad 2 find themselves in an
ever-increasing pool of competitors. The market Apple created in 2010 has since
grown to become one of the key components in the technology industry, with
hundreds of tablet devices now available.
As a result, a notable shift has taken place in the analysis of the device’s success
as a product. Where it was once examined as a standalone product, it is now more
regularly judged against its competitors.
While this mode of analysis has changed, statistics and trends relating to Apple’s
iPad and iPad 2 still remain almost unanimously positive - Apple are on course to
sell 46.7 million tablet devices this year, 4 times larger than their Android Rivals.
In this third trends and statistics document, we will look at Apple’s current and
projected position in the market and display that although Apple is set to face
increasingly stiff competition; all signs suggest that the device will continue its
tablet dominance for the foreseeable future.
“
“
The tablet market continues to be summed
up like this: the iPad and everything else.
And everything else doesn’t amount to much
Cnet
1
3. 1 The iPad is currently untouchable
as the leading tablet device
In our last report , we suggested that
the iPad’s most significant impact
would be the creation of an industry
almost overnight. At that stage of
2011, competitors were scrambling to
develop and release their own devices
that they hoped would rival the iPad’s
supremacy. This developer battle has
perhaps become the defining issue
of the technology industry during
the latter months of 2011. For Apple,
the good news is that their market
domination has persisted throughout.
According to the IDC, Apple’s tablet market share actually rose to 68.3% of the worldwide
market, up from 65.7% in the first quarter. During the same period, the number of devices
sold by those operating an Android system fell to 26.8% from 34.0%. Considering the
number of devices using an Android operating system, Apple remains way out in front
as the world’s most popular tablet device.
Current share of tablet marketplace by operating system
5%
27% Apple
68% Android
Blackberry
Source: IDC Market Intelligence
2
4. The customer base established by the iPad appears unlikely to erode as well. According
to a U.S tablet survey by Robert W. Baird, 98% of current iPad owners that are
considering a second purchase are looking at another iPad.
There are several factors for both the market share and customer loyalty of the iPAf,
however put simply, the iPad and iPad 2 offer users the best hardware, the best software
the most Apps, and now with iOS 5, the iCloud. New devices which do not have these
4 components integrated in one ecosystem will continue to suffer when compared to
Apple’s devices.
Tablet Planned Purchasing
Who is the manufacturer and what tablet device are you planning on buying?
August 2011
100%
85%
80%
60%
40%
20%
4% 2% 1%
0%
Apple Samsung Galaxy RIM Motorola
iPad Tab Playbook Xoom
Source: ChangeWave Research
3
5. 2 Tablet devices are here to stay
Although making a significant impact on the technology industry, the tablet market
in 2011 is still in its relative infancy. The ‘newness’ of these devices has prompted some
detractors to label the tablet boom a passing fad, however forecasts from industry
analysts predict year-on-year growth of the tablet device, with the iPad and its
follow-up devices maintaining their position as industry leaders.
Tablet Sales Predictions 2010 - 2015
400
Device Sales (Millions)
300
Gartner
200
IHS
100
0
2010 2011 2012 2013 2014 2015
As the graph illustrates, both Gartner and IHS have predicted a similar trajectory for
the tablet industry, with huge yearly increases leading to approximately 300 million
worldwide tablet sales recorded by 2015.
During this time, several notable milestones have been predicted for the industry.
Research by Social Cast predicts that in 2012, more tablets will sell per year than
notebook laptops, and that by 2014 one in five US consumers will own a tablet PC
(currently 8 per cent of Americans own a device).
4
6. “
“
We found that tablets appear to be taking
incremental dollars away from PC’s
William Power, Analyst at Robert W. Baird
Significantly, analysts have been quick to emphasise that the iPad will retain its
position as the leading device throughout this period. Gartner forecast that of the 326
million tablets sold in 2015, Apple will sell 148m iPads. While this is a smaller share of
the overall tablet market, it would remain far and away the most popular tablet device,
and remarkably, the most popular operating system, with Android sales projected
at 116.4 million.
Tablet Planned Purchasing
Who is the manufacturer and what tablet device are you planning on buying?
August 2011
100%
85%
80%
60%
40%
20%
4% 2% 1%
0%
Apple Samsung Galaxy RIM Motorola
iPad Tab Playbook Xoom
Source: ChangeWave Research
5
7. 3 Magazines are set for a
huge sales boost on the iPad
“
“
iPads and tablets appear to be very conducive to
deeper, more information-packed experiences
Localytics
Statistics published over the last quarter have given publishers the biggest signal yet
that consumers are adopting iPad magazine reading on a considerable scale.
In a survey of over 200 people, UK marketing and analytics company imano found
that 69% of those surveyed regularly use their device as a magazine or newspaper
reader. These consumer habits are expanded further by Gartner, who in May found
that 52% of those who read magazines on the iPad actually found the experience
easier than reading a print copy, while 42% said it was just as easy.
How easy do you find the iPad magazine reading experience
6%
Easier than the print version
42% 52% As easy as the print version
Less easy than the print version
Source: Gartner
6
8. It is important that publishers recognise the huge potential for the growth of this
market, and the credible predictions being made about its growth. PriceWater-
houseCoopers have recently estimated that by 2015 the North American digital
magazine market will be worth. This indicates massive growth of what was
considered a $4million dollar market in 2010.
Perhaps best emphasising the huge potential for Magazine apps currently is the
New Yorker Magazine. According to statistics 20,000 people have purchased annual
subscriptions at a yearly rate of $59.99 in 2011, and “several thousand” have purchased
individual issues at $4.99 each. According to Conde Nast estimates, the New Yorker
already has an audience of 100,000 readers on the iPad.
Representing a significant milestone for magazine publishers, Apple launched
its Newsstand service for the iPad on October 12th. The new service affords
newspapers and magazines a higher profile, dedicated space within iTunes
and is set to act as the primary sales channel for digital magazine editions.
Since its recent release, the channel has been responsible in some cases for
a huge 268% Digital magazine sales increase.
7
9. 4 The iPad is the dominant
enterprise & consumer tablet “
“
Although consumers have been using mobile
technology for a while, in the last year, there has
been an awakening on the corporate side
George Ravich, CMO at Fundtech
More and more companies are seeing the benefits of deploying tablet devices in the
workplace. Although perhaps less publicised than its success as a commercial product,
the iPad has already proven an essential business tool for many companies, and remains
the corporate tablet device of choice.
Corporate Tablet Demand - A Comparison
May 2011 vs August 2011
For those companies buying Tablets in the next quarter,
who is the manufacturer of the Tablets your company is planning on buying?
100%
80% 80% 80%
60%
40%
20%
10% 8%
6% 7% 6% 5% 4% 3%
0%
Apple Samsung Dell Motorola RIM/Blackberry
Source: ChangeWave Research
8
10. As this recent Changewave survey displays, Apple’s position as the dominant
corporate tablet has not deviated over the past quarter. Significantly, this 80 per cent
share is of an increasingly bigger pie. According to data by from technology research
group Gartner, by 2013, 80% of businesses will support a workforce using tablets.
The professional landscape most altered by the iPad is undoubtedly the mobile
technology industry. While this may seem obvious, it is an interesting sector to look
at as it is the forerunner for tablet usage trends that may emerge more universally in
the future. For example, according to a Social Cast survey, 27.4% of mobile workers
believed the tablet could replace the laptop as the mobile device of choice in the
future. While this may not be set to happen immediately, it is an interesting
projection from those who work with these devices the most. “
“
Every single organisation that is dedicated to digital should
be spending the majority of their time, effort and resource
optimising for smartphones and various tablets
Bonin Bough head of digital at Pepsico
9
11. 5 The iPad is a purchasing machine
Purchases made on the iPad continue to act as a good indicator of the devices popularity,
and how well they have been adopted by their user base. In the last quarter statistics have
emerged to suggest that both internet browser and app purchasing has massively
increased, and has the potential to grow much further. “
“
We see [the iPad] as a key growth vehicle
Claire Watts, CEO of QVC
Significantly for retailers, research has shown that owners of the iPad spend more money
via the device than through any other platform. The Wall Street Journal has reported
that, on average, PC and Laptop users buy a product 3% of the time, whereas a consumer
browsing on the iPad or iPad 2 has a conversion rate of between 4-5%.
“
“ Tablet owners tend to be wealthier, which gives
retailers a self-selected audience of their best customers
Dana Mattioli, Wall Street Journal
10
12. These estimates are reflected in the results of Imano’s survey into iPad usage, which
found that 48 per cent of iPad users spent the most money through the device, while
only 19 per cent said they spent most through their computer.
How easy do you find the iPad magazine reading experience
Laptop
Mobile 16%
Phone
11% Computer iPad
19% Mobile Phone
Laptop
Cable/Internet TV Computer
4% Cable / Internet TV
iPad Don’t Spend Money on a Device
48%
I Don’t Spend
Money on a Device
3%
Source: Gartner
The same survey found that customers are growing ever more willing to purchase apps.
A third of those surveyed have paid for 20-49 apps for their device, and just over 1 in 10
have bought 50-99 Apps.
How many Apps have you paid for using your iPad
100+
6%
50 to 99
11% 0 to 9
26%
20 to 49
33%
10 to 19
24%
Source: Imano
11
13. 6 Catalogue apps are flourishing
on the iPad
An App format that is thriving on the iPad and the iPad 2 is the Catalogue shopping App.
As we’ve already highlighted, e-commerce is proving to be hugely popular on the device.
Although internet browsing might be the traditional way to shop online, many retailers
are finding that a catalogue app is a perfect fit for the device.
A survey from eConsultancy has found that 54.4% of UK shoppers have used a catalogue
before making an online or in-store purchase this year. With an interactive catalogue
App, which is tailored to mobile shopping, the route to online purchase can be reduced
significantly.
This has been proven by online shopping research TheFind, who have found that the
conversion rate on its catalogue app is about 10% higher than on its website, and
average order size is between 10% and 20% higher.
12
14. “
“
Tablet users are spending three times as much time
on the catalogue app than on the website
Wall Street Journal
A look at YUDU’s own catalogue apps shows that users are engaging with the content
and the retailer themselves. Across our catalogue apps 39.4% of users supply opt-in data
that then becomes the property of the company. This data affords retailers up-to-date
information about their audience demographic and can allow for better targeted
advertising campaigns.
13
15. 7 Conclusion
Although the tablet landscape has changed dramatically throughout 2011, the iPad and the
iPad 2 remain the benchmark by which all other tablet devices are judged, and if the quarter
“
has proven anything, no device is yet to meet the lofty standards set by Apple’s devices.
“
Apple delivers a superior and unified user experience across
its hardware, software and services. Unless competitors can
respond with a similar approach, challenges to Apple’s
position will be minimal
“
Carolina Milanesi, Gartner Research
Both the current and projected sales figures have proven that the iPad is still king in the
tablet market, and will remain the key player in an industry that is set for unprecedented
overall year-on-year growth up until at least 2015.
But the newest threat to the iPod’s tablet dominance is perhaps the largest. Amazon’s
Kindle Fire looks set to offer a unified service that rivals the iPad’s own. Amazon’s
established presence as a content-delivery channel, already in possession of millions of
consumer’s details, encouraged the pre-ordering of around 95,000 devices on the first
day of pre-release.
While this may be slightly troubling news for Apple, the larger pool of tablet devices can
only be considered as a positive for digital magazine publishers.
As we reported in a recent blog post, the Kindle Fire will be geared towards media
consumption, and in particular, interactive colour reading experiences. It is truly exciting
and encouraging for Amazon to put their name to hardware that allows for this kind of
reading.
Perhaps what it emphasises more than anything however is the enduring potential
of the industry, and how important digital reading experiences will be in this overall
growth. If Amazon’s faith is well placed, 2012 looks set to be a huge year for tablet
magazine publishers and the devices they are viewed upon.
14
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