Even the most bullish estimates for iPad sales were not bullish enough. In the holiday quarter (which is Apple’s first quarter for fiscal 2011), the company sold 7.3 million iPads, bringing the total to about 15 million iPads sold for 2010. (GigaOM Pro had initiallyforecasted about 7 million sold for 2010 and we were on the higher end of the spectrum.) I am personally not surprised.I fell in love with the device the minute I got my hands on it. It has become one of the most used devices in my arsenal right now, slowly and surely nudging my MacBook into the background. The proof of the growing popularity of the device came during my vacation in Miami.
When I boarded the flight from San Francisco airport, I could see at least dozen iPads in my immediate vicinity. Of course, one could argue that I was on a flight out of San Francisco, which is very tech-savvy; people would have iPads and other latest gizmos. But there were still an awful lot of iPads. On the flight back, it seemed one in three people getting on the Virgin America flight had the Apple tablet.
Instead of the laptops, it seemed everyone had decided that they could not leave home without the iPad. Sure, it makes perfect sense to take an iPad on a trip. First of all, airport security doesn’t make you take it out of the bag, it is lightweight and it has a small footprint when working on it between airline seats. I slipped mine in my Mulholland Brothers’ Tote Bag.
When walking down the funky South Beach, I spotted many folks walking around with their iPads. Admittedly these are not fiscally challenged tourists, but I was just surprised by the quite visible presence of iPads. At the Pritikin Longevity Center where I spent most of my days, many of the program attendees had iPads although most were neither young, nor tech savvy in classical sense.
I could see a couple of very senior citizens were reading their hometown papers every morning on their iPads. This slice of Miami represented a diverse demographic – men and women – young and old.
Most people I talked to had two major use cases — checking emails and using their favorite apps to find restaurants. Keeping up with news was another popular activity. I was quite surprised that not many were using it to read books, check out Netflix or listen to music. Of course, I introduced some of my new friends to Angry Birds.
For me it turned out to be the perfect device for the vacation – I read 12 books via the Kindle app, watched three movies and downloaded a season of Mad Men to watch on the device before tuning out the Internet. And when I got bored, I played Angry Birds.
Given the speed with which iPad has found acceptance, it is pretty clear to me that Apple isn’t done just yet. (iSuppli forecasts that Apple will sell 43.7 million iPads in 2011.)
Sure there is more competition and some folks like our own Kevin Tofel feel that they want smaller tablets, but the fact remains that for now Apple has momentum. Apple Chief Operating Officer Tim Cook said as much during the conference call with analysts earlier this month.
Apple’s early start gives the company a different kind of leverage – scale is allowing it to ensure smooth component supplies, something of a challenge for its competitors such as Motorola.
According to the Gartner Group research firm, in terms of dollars, Apple is the third largest chip buying equipment maker in the world after Hewlett Packard and Samsung: Apple snapped up $12.43 billion worth of chips in 2010. That’s about 65 percent higher than the $7.52 billion it spent on chips in 2009 when it was ranked as the No. 4 buyer.
That kind of purchasing power ensures Apple maintains an edge over its rivals, especially as supplies for products such as display components tighten. I guess the only company which is able to (and most likely will) compete with Apple effectively is Samsung, which has a vertically integrated supply chain – it makes chips, memory, displays and even owns manufacturing facilities to assemble devices.
It would be fun to see Samsung and Apple duke it out in the market place. I am looking forward to 2011, the year of the tablet.
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