The iPad’s Curse

There have been many good articles on the iPad lately.

iPads and Tablet Growth – Benedict Evans
Don’t Give up on the iPad – Ben Thompson
The Astonishing, Disappointing iPad – MG Siegler

However, I still think there are several missing pieces of the iPad puzzle. While it is still all theory, I’d like to offer my perspective on the iPad and tablet market. The source of my optimism for tablets is rooted in the unique combination of form and function. The larger screen makes it more capable, as well as more diverse, in its function than a smartphone. The lack of a clamshell design with attached keyboard makes it more portable/mobile than a traditional PC. This combination allows the device to be extremely varied in its supported uses. Specifically, the iPad is the most general purpose computing device I’ve ever studied. It can be so many things to so many people and do a wide variety of things well. It can be a DJ’s mixing board, an art easel, a portable DVD player, a music recording studio, an e-reader, a web browser, a gaming console, and so much more. I believe this range of supported use cases is what made the iPad Apple’s fastest growing product and one of the most quickly adopted devices in consumer electronics history.

As I have reflected on this point, it has led me to think the iPad may be cursed. It may be too good of a general purpose device in that it lacks a preferred or specific use case. What I mean is the iPad lacks a function its owner prefers or can only do on the device. One that can not be done on any other device they own. We recently received a large data sample of consumer use cases for PCs, tablets, and smartphones. Included in this was usage data of each device. What stood out to me was, of the top 50 most common tasks ((The survey defined these tasks and was very comprehensive. Things like check email, search the web, make an online purchase, watch a video, watch a movie, play a game, etc. It was a global survey of 30,000 consumers)) consumers engage in with computing devices, there was not one single task they indicated they did more on their tablets than their PCs or smartphones. This data supports my theory that, for most average consumers, the iPad/tablet did many things well. But in relation to their smartphone or PC, it didn’t necessarily do any one thing better which led them to use the device exclusively for that function. Even if we can make the case the iPad does succeed at doing a few things well or better than a smartphone or PC, are those things worth the cost of the iPad when most consumers still have access to either a smartphone or a PC? Because of this I feel, for the time being, the iPad is still viewed as a luxury not a necessity. Its place between the smartphone and the PC is evolving but while we still have a huge number of people with access to a traditional PC in their home or workplace and owning a smartphone, the role the iPad plays is one more of convenience/luxury than necessity. The iPad’s curse may be it can do many things well but does it do anything better? That is a key question.

The iPad’s Consumer and Commercial Divide

I make the above points with the distinction I am talking about the general consumer mass market. Without question, the iPad has distinct and differentiated value in commercial and education markets. For field workers who don’t sit at a desk all day or who work from a stationary position, the iPad has been a valuable asset to their job. In many schools, the iPad is the absolute best device for student-teacher interaction and learning. When it comes to the commercial verticals we study and the education sector, I can rattle off dozens of use cases where the iPad/tablet is not only the preferred task for the job but also the only product uniquely designed to fulfill that job.

I also make the above points understanding the iPad’s role for kids and seniors. That the iPad is fulfilling the task of a primary PC for these groups who have no PC or are limited in their computer literacy is a significant point and one worth including in tablet analysis.

How Much is the Smartphone to Blame

The other element worth adding to the puzzle is the degree to which the smartphone is to blame. I believe there is merit to the idea the smartphone may have covered more ground for consumers’ general computing tasks than previously anticipated. It was our conviction the PC over-served the broader consumer market. The upside of the tablet was this device was good enough to replace the PC for most consumers. It turns out, the smartphone may actually be good enough for the masses–for the time being. Add a larger screen to the smartphone and the number of use cases it can cover as the primary computing device grows even more.

Screen Shot 2014-04-27 at 8.40.59 PM

We look at the chart above and initially believed the decline was directly correlated to the iPad’s release. While there may be some truth to this observation, we can also argue 2010 is approximately the time the smartphone went mainstream. Hypothesizing the smartphone may have more to do with the PC decline and the slowing of the iPad may not be too far off. It seems clear in many markets we have had an interesting perfect storm occur. The PC market, for the most part, became saturated with nearly half the planet’s population having access to a PC in some way, shape or form. We had the rise of the smartphone as it went mainstream and we have had nearly half a billion tablets sold. By the end of 2014, we will have a combined installed base of 4.1 billion PCs, smartphones, and tablets. ((All stats here from my firm Creative Strateiges, Inc))

The key takeaway is the iPad/tablet is closer to the PC than the smartphone. We never modeled the tablet to have a total addressable market as large as the smartphone but we also agree it is larger than the PCs TAM which currently sits around 1.5b (although declining). We remain bullish on the tablet but the dust must settle in pure consumer markets with their use of the PC. We believe the iPad/tablet still represents the best form and function as a mass market personal computer. With regard to the smartphone we must keep one thing in mind. While essential, it may always be limited by its screen size. This limitation opens up the opportunity for larger form factor computing devices. I anticipate a battle between the tablet and the PC over the next few years for the hearts and minds of mainstream consumers. If I had to bet, I’d put my money on the tablet.

For a more formal note on the tablet market, read my latest report at Creative Strategies titled Tablets: The Next Frontier in Personal Computing.

Published by

Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

900 thoughts on “The iPad’s Curse”

  1. So the rising popularity of phablets is an expression of the kinds of choices consumers are making between a smartphone and a tablet. A phablet seems like a reasonable compromise between a smartphone and a tablet for many. Apple’s alleged forays into larger (phablet like) iPhones would suggest that Apple is taking note of this compromise consumers are making.

  2. I have been saying for a while that it looked like sales were flatlining, and it made sense from a refresh cycle perspective.

    Tablets as mainly media consumption devices, don’t need high CPU power, so there is little compelling reason to upgrade once you have one that works.

    I still don’t have one, but when I get one, that it will be it, until it breaks/wears out.

    1. 210 million people disagree with you. That is the fasted selling product Apple has ever released. So last quarter’s earnings while disappointing were seriously nothing to worry about.

      Also the media consumption device argument is wearing a bit thin when you get people like David Hockney, Damon Albarn and many others using it to produce content.

      While the cheap plastic tablets are being used to watch pirated movies in Asia, the iPad seems to be treading it’s own path.

      1. Odd, I don’t disagree with those 210 million.

        The launch of the iPad was EXPLOSIVE. It just seems that they are close to their stable level already, partly because IMO the refresh rate is low.

        I am also not being derisive when I say the iPad is mainly a consumption device. I realize some people are doing amazing things with them, but for the most people I do think they are mainly media consumptions devices.

        When I think what I would use one for it is primarily web surfing/reading/light gaming.

        1. I’m on my 3rd new iPad. Had the original. Needed more speed for certain processes, as it seemed to be lagging a bit with some newer apps. Bought the 3rd gen iPad. Thinner, lighter, faster. Now have the iPad mini. Noticeably faster processor, retina screen. And there are many processor-enabled features not available to my original iPad. So, if that all sound very similar to the cycle of my previous laptop/desktop computers, it is. There are all the same types of advances and added features that arise with a tablet as there were with PC’s. So, I don’t think the logic of your article necessarily applies. Not to me or those I know.

          1. That is what. 3 ipads in 4 years? That isn’t a normal refresh for anyone I know, for any computing device. I doubt any statistics will show this as a normal refresh rate either.

            Sometimes people need to recognize when they are the exception, not the pattern.

          2. Two. The original is used by my daughter, who doesn’t require a speedy processor, just something to get online with. The other two, a full-sized iPad 3 and an iPad Retina Mini I still own and use. The larger iPad at home and the mini when I travel. I skipped generations 2, 3 and 5 of the larger iPad. The intervals are very similar to what I have done with my laptop/desktop Macs. So, it’s not at all an abnormal refresh rate for many Mac Users. Most of the people I work with have a similar situations.

      2. I disagree. Dendor is correct in saying that the new iOS is purely a reworked and highly restricted OS that approaches other consumer devices, where an OS is pretty much needed for the sole purpose of control. A PC is a fully fledged tool, as it was meant to be: Designed so abstract that it encompassed the associated issues of configuration, troubleshooting, etc.

        I think it’s a great strategy, given computing companies wanting to eliminate tech support as much as possible. Also, that focus has provided an Adrenaline shot for app developers.

        There will always be a need for PCs. Developers like myself have to go somewhere to get this stuff done.

      1. Or it could be that he doesn’t have a tablet precisely because he knows what it is good for and not good for.

  3. It all depends on how you look at it. Many see the tablet as a substitute for a PC. For many functions, it can be indeed just that. Look at this historically however. For a year or two, netbooks were by far the most popular PC. They were cheap internet machines, though they did everything else a PC could do (poorly). It did however loosen the traditional PC’s grip and it was what grandma and grandpa would buy at that time.
    I submit to you that the iPad (really the iPod Touch, whichever came first) is the revolutionary evolution of the netbook, not the PC, for all the reasons you state.

    1. I’ve covered the point that the iPad serves as a PC replacement for many at length so you’ll know I agree with you. However, as you know I, at my firm, do quite a bit of behavioral research. It is interesting that we are noticing the younger, and say those below 45-ish, spending more time with their smartphones than anything else, including if they have an iPad. This goes to my point that for now the smartphone is covering more ground in every day uses than originally anticipated.

      Our original theory was the iPad would be the preferred device for most light general purpose activity. Then when said consumers needed to do expenses, or something requiring a keyboard and being stationary, they would keep their older PC around to do so until it dies. It turns out the phone is the primary device for 90% of what they do, and they are keeping their PC around for the more deep work use cases, which are few and far between for most consumers. This is why I state the tablet needs a killer app/apps that make it the preferred device for x use cases.

      I have thought about the idea of the tablet as the evolution of the Netbook. I am bummed I didn’t write something on this because now you have said it first. 🙂 There are many parallel observations we have made to the rise and use of the Netbook and the iPad in pure consumers markets.

      You have convinced me to flesh this out publicly.

      1. High praise indeed. Thank you.
        Please keep in mind that when I reply to posts on boards, I also reply to reinforce and contradict. Sometimes in the same post! 🙂 I also write for the random reader that may encounter my post.
        Nonetheless we have been generally aligned over the past few months I’ve been here. If it makes you feel any better, I brought up the evolution of the netbook, elsewhere, quite a while ago. 🙂

      2. “It turns out the phone is the primary device for 90% of what they do, and they are keeping their PC around for the more deep work use cases…This is why I state the tablet needs a killer app/apps that make it the preferred device for x use cases.”

        I think those apps already exist and more will be created over time, including very customized ones for enterprise & education. That broad range of apps is what makes the iPad “killer”. It is adaptable to each users’ needs. You’ve already touched on some of those killer use cases (field workers, student/teacher interaction, music, art, etc.). Those are examples where an iPad is already better than either a smartphone or traditional computer.

        The “problem” (if you can even call it that) is that the iPhone is indeed the more transformative product. It’s more mobile and always connected to the internet. So most of the energy (Apple’s and developers’) has been focused on the iPhone. The iPad hasn’t exactly been ignored, but the fact that it’s doing so well probably means that Apple won’t be changing the prioritization of energy between the products. Developers follow Apple’s lead, so progress in UI & app innovation will be slower than what we see with the iPhone. Federico Viticci wrote a good article delving into this: http://www.macstories.net/stories/the-ipad-the-software-and-the-screen/

      3. Highly anecdotal and therefore useless relevance.
        Such a terrible disaster that Apple has sold only how many millions of these?
        Sales have slowed down because they are more expensive than smartphones and do not require replacement as often. That is all there is to it. I know many bloggers, which is what you are, see this as an opportunity to wring a few articles out of it saying it means this or that but its really not very difficult to understand.

        1. You have come here several times before and commented under an alias, and not used your actual email address so you can’t see when anyone mixes it up with you. All the while you make some pretty weak arguments and statements only reading one article and failing to see if I or anyone else has written anything or reading anything of mine which would prove your comment above wrong. I’ve written and analyzed many positive things about the iPad’s potential as the mass market personal computer.

          Start making more educated statements or you will be blocked. We don’t need useless banter here.

      4. I agree with everything, except the part about tablets being the evolution of the Netbook.

        IMO Netbooks were just really crappy/cheap laptops. There was no new paradigm. IIRC they were sinking before the iPad hit the scene.

        Tablets are actually a new category. A shift in how things get done, not just a cheap crappy version of something else.

        1. That’s the evolution part. I accept your position, but they are a better shift away for functions one would have used a netbook. Netbooks were cheap, almost disposable machines for email and web surfing and media consumption. Netbooks were rightly cannibalizing their big brothers, and tablets have taken over and continued that trend.

  4. Isn’t it likely the next inflection point for the iPad will be mass adoption in education? Tim Cook noted the exceptional success of iPad in this field last week and there have been rumored deals with Turkey (10 million iPads) and of course the iPad implementation in LA county (700,000+ iPads) schools. In addition, more students would be exposed to iOS sooner and for prolonged periods of time, which could be a boon to Apple’s software ecosystems. Is it possible that Apple has a chance to dominate education as Microsoft did enterprise for the last 20+ years?

    1. The problem in education is the free app. This leads to the development of babysitting apps that are in turn making it difficult to sell and therefor create great creativity apps. This will likely change in time.

  5. On the other hand, does it matter that much to Apple what size the screen is on the computers they sell?

  6. Interesting discussion. I’ve always thought of Netbooks as a pricing strategy more than any intended evolution of the PC, a way to get first-time customers onboard for later upgrades to “real” PC’s. Netbooks were stripped-down devices, and were probably a devolution of the PC rather than any step forward. (The netbook in our house now serves as a USB charging station.)

    An overseas friend was recently in the States looking for a replacement laptop–one that was light and compact and with a touch screen. He travels a lot, and his main use is selected apps and lots of email. The best solution was an iPad Air with an accessory keyboard/case. Kind of a kludge, but effective. In watching him use it, the apps seemed more important than the form factor. The “job” of the device was to present the app and get out of the way.

    When we talk about “evolution” in computing what are we actually talking about? I’ve always thought it was devices becoming smaller, faster, cheaper, but maybe it’s really the evolution of the app–progressively becoming more “human”–that’s the real story.

  7. Hmmmmm. Sales and growth seem to show otherwise. Doomed just seems like too harsh a word. Are we in the beginning or the middle of it’s life-cycle? Remember that the iPod lives on! But I will add this insight:

    The iPad is the “SUPER-TOY” for kids. It does cover 90% of what THEY love, which the smartphone does for adults. For kids, the iPad is a :

    – game platform (hello minecraft)
    – communication through FaceTime, Skype and Instagram
    – music player & streamer
    – video player (youtube is the new TV)
    – creative maker (my daughter creates stop-motion movies and tons of other things I could only dream of making when I was 10 yrs old)

    When I see kids out in the wild, they have an iPad – way more often then an iPod touch. I think this fact isn’t lost at all on Apple. They know exactly where they are going.

    1. I can certainly confirm this from my own observation; kids just love the iPad and instantly know how to operate it. It is amazing to see a four-year old explain to a two-year old how to operate the various games and Apps.

  8. I’m not sure I can agree with some of the points in this article. I believe much of the reason iPad sales are slumping is the longevity of the iPad 2. The longevity of the iPad 2 is a big deal. They’re due for an upgrade and the fact so many are still in use suggest those users will indeed stick with the iPad.

    The idea that large smartphones are eroding iPad sales doesn’t hold water for me. The vast majority of iPad users USE their iPads – all you have to do is look at the web browser stats, app consumption, etc. The vast majority of people buying large Android phones don’t use their devices like iOS users do, so I’m not sure those buyers are being syphoned off in the first place.

  9. The iPad occupies an odd niche for my computer needs. I couldn’t live without my laptop and my iPhone is nearly as important. I can easily get by without my iPad but I wouldn’t want to. I’ve bought each generation and sold my previous one. I use it about as much as I use my laptop but if I had to get rid of one of the three there is no doubt it would be the iPad.Luckily for me, I don’t have any reason not to continue to purchase the new iPads as they come out but I would be perfectly productive without one.

    I think for me it comes down to the fact that I make my living with my MacBook Air and to a lesser extent with my iPhone. But for anything that I do that brings in income, I can always do with my laptop even if the iPad is somewhat more convenient. The opposite is definitely not true. There are many things I do on my laptop that simply can’t be done on the iPad.

    I’m not sure I’ve had a computing device in such a category before. I can’t think of one.

  10. PC had a 30 years of exponential growth because it expanded in feature
    and price (downwards).
    Netbooks were short live phenomena because IPad came and hit
    the $500-800 price point.
    iPad may appeal to non tech relative who would never buy a PC but that usually because someone give it to them.

    So either price has to come down so more gift purchases can be made
    or its functionality has to expand. Latter is hard. Even former is hard because ASP going down would mean Apple has to manufacture the battery and the screen, two most expensive part of the iPad.

    Also interesting that no one is talking about Polar Vortex and Apple Retail of having 0% growth.
    Unless Education and Corporations pick up the slack.
    What is your prediction for growth rate for iPad for this year.
    81 million sold would be 10% growth.

  11. I think the mistake that we are making is to think of the iPad as a direct replacement of desktop PCs, laptops or netbooks. The iPad can be used for many tasks for which you would never use a PC. Compared to the iPhone, the benefit of the bigger screen really stands out.

    A few observations:
    1) I’m frequently amazed at the new types of software interaction that are emerging in iPad Apps. I think we only just beginning to understand how to develop quality Apps for the iPad. Much in the same way that it took years before we got quality Windows software. This would suggest that there is a slow burn element to the iPad adoption.
    2) The iPad took off much faster than even the iPhone. However, the replacement cycle of the iPad is actually longer than that of mobile phones (they see far less physical abuse), which may result in a pause in the adoption pattern.
    3) Many consumers are budget-constraint, so they will have to prioritise: either get a smart phone, a tablet or a PC. A smart phone in combination with an ageing PC is probably quite a sensible solution for those consumers. However, once that old PC dies, those consumers may well be in the market for a tablet but for the moment we don’t know.

  12. Wi-fi iPad utility limited to home environment. Well worth it to buy LTE capable tablet; now don’t leave home without it.

    Tablets far superior for kids, elderly, couch activities.

    Market for even larger tablets in education and business; current size not optimal for many activities. Limited future for mini-iPads IMHO.

    wc21

  13. Good read Ben.
    I’d love to see your metrics. Mine are a bit limited, just 3 teenagers and myself. We’ve had an iPad for 3 years now, and while it’s used regularly it’s mostly to entertain ourselves while watching TV. Always has been. Each of the kids have their own PC or laptop and they use them constantly. I’ve suggested they could do the same thing with the iPad, but it’s not the same experience. And frankly if have to agree. The touch experience really only works for the types of activities such a coarse method can accomplish. Which also include typing. At the end of the day they much prefer their laptops or PC. We also have a Kindle Fire which nobody will use, not even to watch Nexflix on. I can’t explain that one. Well there is the kludgy interface. But still.
    I guess I’m saying tablets can do a few things, but if you want to do something, we prefer our legacy devices.

  14. Interesting article and discussion.

    I wonder if a comparison worth considering would be iPad as game console. The comparison is more about the development and buying cycle than a straight 1:1, as iPad is much more than just a gaming audience (even if games are the most popular apps by a mile) and Apple has loftier goals.

    We have the iPad at 210 million units (over just 4 years) vs…

    GEN 1
    the PS1 at 102 million units (1994-2004)
    the N64 at 33 million units (1996-2003)
    the Saturn at 10 million units (1994-1998)

    GEN 2
    the PS2 at 155 million units (2000-2012)
    the Xbox at 24 million units (2001-2006)
    the Gamecube at 22 million units (2001-2007)
    the Dreamcast at 11 million units (1998-2002)

    GEN 3
    the Wii at 101 million units (2006-2012)
    the Xbox 360 at 83 million units (2005-2013)
    the PS3 at 80 million units (2006-2013)

    Even if the iPad turns out to be nothing more than a mere general purpose leisure device and occasional sumo wrestler training tool, it’s massively more successful than an entire console market that nobody ever questions. By the end of this year, the 1st generation of iPad will have exceeded the sales of the entire 3rd generation of consoles in half as much time. By any metric, the iPad is a much better business to be in and has had a much more transformative impact on culture in the briefest of time.

    Are we seeing a leveling off of the iPad/tablet as a category, or is it just a calm before the storm of a next generation? I see a future iPad as thin as paper and a future iPhone that fits in my ear and sounds like Scarlett Johansson. We’re witness to an awkward adolescence before these devices find their true form.

    1. Even if the iPad turns out to be nothing more than a mere general purpose leisure device and occasional sumo wrestler training tool, it’s massively more successful than an entire console market that nobody ever questions.

      Well said.

  15. If push came to shove I’d ditch the phone and keep the iPad. The iPad has cellular data so I could get something like Line2 and a BT earpiece for my infrequent phone calls.

    My iPad use is expanding as I learn better how to use it. Consuming video or music is popular because it is so easy. It takes a little longer to learn how to integrate this tool into your life in other ways.

    My company, Fortune 500, just decided to give everyone in our sales group an iPad. We’ll use it for note taking, capturing information, online meetings, preparing quotes, presenting to customers and such.

    I’ve found it to be great for presenting to customers because it is so immediate, light weight, interactive and nonthreatening. The latest Keynote added a method to draw on a slide while presenting as a way to magnify this interactivity.

    In short, I think the growth story is in business and professional life more than the home.

  16. Nice article.

    It would be interesting to see the graph narrowed to a comparison of Macs, iPads, and iPhones. Not that there isn’t brand “spillover” among consumers, but rather that it would be a bit more of a controlled experiment on the supply side. It might also give a slightly different focus on what Apple thinks is happening and is going to happen!

    In that same vein, I wonder what the graph would look like if you *added* a curve for the growth of the iOS app library? My guess is that there was a significant lag (but one that disappeared over perhaps 12-24 months) as the availability and diversity of apps caught up to consumers’ ability to walk in and buy either device. In other words, what is the effect on the PC, not of availability of the iPad per se, but of the iPad plus the burgeoning variety of things you can do with it?

    I ask this both rhetorically and as someone with hundreds of apps on both an iPad and an iPhone — and probably approaching four significant figures of app downloads that I have tried and kept or not, something that I say with more embarrassment than pride. Even though a large number of them have been free. No one does this, I’m pretty sure in desktop-world, but the iDevices make it easy and relatively inexpensive. That is another factor that could be explored to great effect and insight, I suspect.

    Finally, notice my phrase above: “consumers’ ability to walk in and buy either [iOS] device.” What seems to be completely missing from your piece, and the ensuing comments, is the distinction between where most purchases take place: iPad in an Apple Store (including online) vs. iPhone in a T-MobiZonT store. Again, there is spillover of course, but consumers surely see the devices very differently — computer store vs. phone store. More importantly, the T-MobiZonT marketing “ethos” does two things that are profoundly different from Apple or any other tablet maker: (1) it underwrites or amortizes the cost of the phone so that consumers are less cost-conscious about the device itself; and (2) it makes you believe that you are a cultural has-been if you are not getting a new phone every 36 or 24 or 12 months…. Can 6 months be far away?

  17. Greetings! I know this is kinda off topic however , I’d figured I’d ask. Would you be interested in exchanging links or maybe guest writing a blog post or vice-versa? My website discusses a lot of the same topics as yours and I think we could greatly benefit from each other. If you’re interested feel free to send me an e-mail. I look forward to hearing from you! Terrific blog by the way!

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