How big is Apple’s iPad opportunity?

invisibleSHIELD case for iPad“More than 2 million iPads have been sold,” Tim Beyers writes for The Motley Fool. “The iPad sells for between $499 and $829, before service plans or other add-ons.”

“Multiplying 2 million by $664 (the average of those pricing extremes) tells us that Apple has already booked at least $1.3 billion in iPad revenue,” Beyers writes. “That’s a good number, but we know from Apple’s second-quarter conference call that the iPad is partially responsible for a coming decline in gross margin.”

Beyers writes, “We also know that there’s bound to be plenty of competition. Now that Apple is making its own chip for mobile devices, Intel is making a play to get its newest Atom chip adopted by netbook makers.”

MacDailyNews Take: Intel has not yet proven they can even make, let alone compete with, a high performance mobile SoC that doesn’t eat batteries by breakfast.

Beyers writes, “Dell, meanwhile, has teamed with Google for the new Streak tablet and Hewlett-Packard acquired Palm in part to use webOS as the basis for a new line of tablet PCs.”

MacDailyNews Take: HP is printer ink cartridge peddler that’s years behind with a derivative vapor-dream. They haven’t “invented” anything of note in decades. And Dell? Thanks for the chuckle, Tim.

Beyers writes, “See the problem here? Apple has to move a lot of iPads to produce iPhone-sized profits, yet forthcoming competition could stunt sales.”

MacDailyNews Take: Not seeing the problem, Tim. Is this fantasy of yours anything like those “iPod killers” we once heard so much about?

Beyers writes, “Fortunately, the Mac maker already has experience winning in a crowded market. Consider the iPhone. Though still a relative newcomer among smartphones, it’s challenging Research In Motion for the market lead here in North America.”

MacDailyNews Take: And Apple’s doing it with the AT&T millstone around it’s neck, too. Wait until they add multiple carriers in the U.S. (In countries where Apple has multiple carriers, RIM, Android, etc. are getting killed by iPhone; and that’s pre-iPhone 4, no less.

Beyers writes, “Remember also that the iPad’s chief rival, Amazon’s (Nasdaq: AMZN) Kindle, is becoming increasingly known as a store rather than a device.”

MacDailyNews Take: TIm, go use an iPad. Its chief rival is certainly not Amazon’s Kindle.

Beyers writes, “How big is Apple’s iPad opportunity? Judging from its current momentum, competitive position, and industry support, it’s massive. But I could be wrong.”

Full article here.

MacDailyNews Take: On that last point, Tim, you’re not wrong. Apple’s iPad opportunity is massive and hopelessly overmatched, years-late wannabe fake-makers aren’t going to compete any better than they did with iPod and iPhone.

18 Comments

  1. Start your iPad counting guess with most of the netbook market and then add some from the iPhone and Mac halo. Then add all those extra people that you see with clipboards. Add some college students that want to study there book on an iPad. Then there are all those who need bigger text to read.

    Maybe it is easier to ask, how many people live on Earth with more than $500 in their pocket at any time.

  2. I stoppered paying attention to the Fool some time ago. The pundits love an underdog, so they have an anti-Apple bias. I’m not sure if I’d bet the farm on Apple right now, but the do look good.

  3. That last point simply shows he really doesn’t know what he is talking about and simply jumping on the band wagon with verbal diarrhoea to try to look relevant as a commentator. At least do some research and have some confidence in what you are saying before you put finger to keyboard. After all even if like Thurrott and Enderle you write total bull you can still make a very nice living out of it thank you. Delusion can be a kind bedfellow at times.

  4. Wow! That is the single best disclaimer I have ever seen from an ANAL-yst yet! Spew a few thousand word of “journalistic” vomit onto a page, get your clicks, and add the disclaimer “I could be wrong” and therefore, magically, still be right even when he was wrong!! (See? I admitted all the crap I just said could be pure fantasy)

    Martians will attack. Hail the size of footballs will be coming down in Seattle. And, the vuvuzela will finally get banned from the World Cup. However, I could be wrong.

    See, it is fun!

  5. Gawd, these business types are so clueless about technology. I’m getting tired of hearing this broken record of “Watch out Apple, the iPad killers from Dell, HP, et al are coming!” The problem is, this business “expert” is as much vaporware as the tablets they’re warning us about.

    What I really want to know is, Where do I sign up to become such an expert?

  6. Wow, it’s like deja vu all over again. Haven’t these anal-ysts learned from the iPod and the iPhone that when they make these cockamaime predictions about the competion “catching up” that it’s pipedream at this point in the game. It’s all ready too late. The whole tech industry have been caught off guard already and none of them has a tablet ready yet that can even come close to competing.

    When the iPod came out many already had their digital media players out at least a year or two before the iPod was out. Same thing with the iPhone. The iPad is a different beast all together. The low price point and the long battery life is what’s causing “tablet competion” to scramble to come up with something viable.

    That will take about a year or two. By the time they do the second revision will be out. Apple will have improved on the original model may even lower the price point even more or added that video chat camera everyone so desperately wants.

  7. There should be a strong halo effect from the iPad boosting Mac sales, because of its Mac-like OS and its iWork suite and other ported Mac software and Mac conventions. Indirectly, the iPad’s mere success will tend to make even non-owners feel that the company knows what it’s doing and thus that its computers are the ones to get.

  8. I think this halo effect is happening on a massive scale. I can’t count how many people I know who first bought iPods/iPhones (and now iPads) and have shifted their PC preferences over to a Mac. As others have pointed out, Mac switchers most likely will never switch back, so these have become permanent Apple adherents.

  9. No one is catching the iPad. Several early efforts were cancelled once their makers learned of Apple’s patents covering the Multi-Touch and other features, and they realized they could not slap something together without getting slapped with a lawsuit from Apple.

    The industry is in real trouble of losing its status quo – that’s commodity box manufacturers ruling the sales roost – because none of the players have any idea how to create software which just works without getting in the way. And that’s where they will all fall down – they’ll rely on Microsoft or Google, and while a few devices will sell to Apple haters, none will sell in any kind of volume.

    These guys can’t get it through their heads that a product is more than an impressive spec sheet. Then again, they can’t put together anything to truly compete, so they have to rely on the spec sheet to survive.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.