Apple’s New iPad – It’s All Good or It’s All Bad

Jeff Hayes
Mar 8, 2012

Now that the speculation frenzy has been relieved with Apple’s introduction of the new iPad yesterday, I’ll give my perspective on what it means for the market. The short answer is that if you are a publisher, content producer, advertiser, marketing services provider or Google, it’s all good. If you are a printing company or equipment supplier with no presence in digital media, it’s all bad.

The Features, The Impact

  • Retina display (2048×1536) — great for books, magazines, newspapers, HD video and photos. Creative professionals are probably drooling. Check out this nice demo showing the resolution difference.
  • 4G support — great for streaming video, but may not be affordable for many people with the new metered pricing plans the carriers have been announcing
  • Faster processor — traditional gaming console vendors should be getting worried
  • 5MP camera and iPhoto editing software — OK, a little awkward as a camera, but iPads are becoming a real factor in the photo industry, especially for viewing and increasingly for editing
  • Voice dictation — may help create documents and will lead to some innovative new apps

Apple set the price of the new iPad at $499 ($629 with 4G) and dropped the price of the iPad 2 by 25% to $399 which will open up more of the market and put additional pressure on other tablet vendors. Forrester has just upped its tablet forecast and now estimates 112.5 million US adults will own a tablet in 2016 (34.3% of the total US adult population).

I assure you tablet owners (especially iPad) will generally be younger, have higher education and have higher household incomes than non-tablet people. I guestimate by 2016 tablet owners will account for about 50% of total US consumer purchasing and be HIGHLY sought after by publishers and marketers. Expect publishers and marketers to continue shifting their spending towards digital media with traditional print, TV and cable taking the biggest hits.

Just yesterday AdAge reported that Hearst Magazines announced it has achieved 100,000 paid digital subscriptions for Cosmopolitan. According to the Audit Bureau of Circulations, Cosmo is the #1 US consumer magazine for single-copy sales, #15 for subscription sales, #8 for combined subscription and single-copy sales and #7 for iPad Newstand App sales.

With a subscription base just over 3 million, slightly more than 3% of Cosmo’s subscriptions are digital. What’s particularly interesting is that Cosmo charges MORE for its annual digital-only subscription ($19.99) than for its print subscription ($15). And there is no bundle deal where you buy the print magazine and get the digital version for free. People clearly value the content and the mobile/digital form factor. The new iPad will surely help drive more digital subscriptions.

What Wasn’t Announced Means Google Is Pleased

Apple dominates the tablet market, but has lost some share to Android-based devices particularly the Amazon Kindle Fire. Google desperately wants to dominate the mobile market, and also has concerns that Apple could disrupt some of its core businesses and strategic initiatives. While those threats remain, nothing in yesterday’s announcement changes Google’s position.

  • No Siri on the iPad — no threat to Google’s search business
  • No new mapping service — no impact on Google Maps (and lucrative search)
  • No new iAds announcement — no impact on Google AdWords
  • No major innovation with Apple TV or iTunes — no threat to Android as the primary smart TV OS

Apple did introduce a new Apple TV device that supports 1080p, but I don’t think this was the big announcement that Steve Jobs alluded to in his biography when he claimed “I’ve finally cracked it!”. However, the pieces are coming together. As always, stay tuned.

Corporate Market for Tablets — BYO … iPad

Tablets are rapidly becoming common in the corporate market and, according to data from Good Technology (a leading supplier of management tools to provide secure mobile access to enterprise data and applications), the vast majority of new activations are iPads. Good found that the iPad accounted for 94% of total tablet activations in Q4 2011! Clearly consumers aren’t bringing their Amazon Kindle Fires to the corporate network.

While it is unlikely Apple will maintain this share especially with new Android, Microsoft and RIM-based tablets coming to market, Apple has incredible momentum. Look for tablets to be widespread in corporate environments and for Apple to have a much larger share than it does with desktops and laptops for many years to come.

What’s Your Mobility Strategy?

The data I shared in my blog last week makes it clear – whether it is providing content, marketing services, management tools, software or integration — you need to have a mobile strategy. Mobility should account for a significant portion of your senior management’s time and company initiatives. Look outside your core business for inspiration. Talk to customers. Consider alliances and acquisitions. Try some QR codes. Get moving or get passed by.

 

InfoTrends is helping companies identify opportunities and figure out a path forward. Check out some of our recent and planned reports.

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