On Peak iPad

MG Siegler:

At first during the earnings call, Tim Cook tried to explain the “miss” on supply chain minutia. That was a mistake. His second explanation was much better:

When I back up from iPad, here’s what I see. It absolutely has been the fastest growing product in Apple’s history and it’s been the only product that we’ve ever made that was instantly a hit in three of our key markets, from consumer to business, including the enterprise and education.

And so, if you really look at it in just four years after we launched the very first iPad, we’ve sold over 210 million, which is more than we or I think anyone thought was possible at that period of time. And it’s interesting to note that that’s almost twice as many iPhones that we’ve sold in a comparable period of time, and over seven times as many iPods as we’ve sold in the period of time. So, I think it’s important to kind of put that in perspective. We’ve come a long way very, very quickly…

In other words, the iPad got too successful, too quickly, for its own good. Or rather, for Wall Street’s version of “its own good”.

Siegler raises a lot of great points in this article regarding Wall Street’s expectations for the growth and sales performance of the iPad. In doing so, he obliquely references articles like that from Jean-Louis Gassée who wrote the weekend before Apple’s Q2 results call about the predicted (not yet realized) decline in year-over-year iPad sales. Intriguingly, though, Siegler directly casts Gassée’s article in something of a negative or critical light, when it argues a complementary (but different) angle:

No, assuming the estimates are right, what we have here isn’t market share dilution, it isn’t a post-Christmas lull, it’s a year-to-year decline in absolute unit numbers.

Why?

I’ll offer an opinion: The iPad is a tease. Its meteoric debut raised expectations that it can’t currently meet.

Siegler attributes the sales tease to the stratospheric rise of the iPad. Remember: the iPad is the fastest-selling device in consumer electronics history. It sold faster than DVD players, the iPhone, the iPod and, obviously, the PC. It was an early and fast sales phenomenon.

Gassée, on the other hand, attributes the decline to a realization that the iPad is not a tool for productivity in the same way that a PC is:

Despite the inspiring ads, Apple’s hopes for the iPad overshot what the product can actually deliver. Although there’s a large numbers of iPad-only users, there’s also a substantial population of dual-use customers for whom both tablets and conventional PCs are now part of daily life.

I see the lull in iPad sales as a coming down to reality after unrealistic expectations, a realization that iPads aren’t as ready to replace PCs as many initially hoped.

I’m a little surprised that a columnist as well-respected as Gassée resorted to such an overused trope. I’m certainly not under the impression that the iPad should replace the PC in every instance — it certainly hasn’t for me — nor that it should not gain additional productivity and utility enhancements. But Gassée’s suggestions are not, I don’t think, an apt way of addressing these shortcomings:

Specifically, the iPad is a computer, it has a file system, directories, and the like — why hide these “details” from users? Why prevent us from hunting around for the bits and bobs we need to assemble a brochure or a trip itinerary?

I don’t want to rehash my arguments for why users hate file systems. Despite elements of truth, I think it’s an overplayed trope.¹ The iPad is in use in environments where the PC has reigned supreme for over a decade, so it’s clearly a PC replacement in some contexts and for some people.

But consider the ways in which the iPad is being used in the “inspiring ads” that Gassée mentions. There are people using the product in loads of strange and wonderful places: on hockey rinks, inside wind turbines, aboard rescue helicopters, and so on. These are places where the PC has never had a stronghold or place, and where Microsoft Office is a hinderance, not a productivity suite. These are not niche use cases. These are places where the iPad shines.

At any rate, we’re talking about one quarter where iPad sales have failed to grow year-over-year, and even then by only a small percentage. Continuing to build a competitive advantage in traditional PC-driven environments is just one strategy, and it’s not a zero-sum one, either. There’s plenty of room for growing a four year old product category that has already found users in places PCs have only dreamt of going.