Back in April 2010, when the iPad was launched, I was among the scores of people who queued up outside the George Street store in Sydney to buy this device. At that time, I was not sure (along with most of the world) where this new device would fit in my life. Pitched as the third device category, between a phone and a laptop, the tablet juggernaut led to 225 million device sales in just three years.
However, despite the attractive sales, many users have still struggled to find a place for this device in their lives. Apple’s sales results, (a reduction of 9 percent year-over-year sales from the same quarter last year and 19 percent from the previous quarter) are a leading indicator of things to come.
Let’s examine the potential causes of the trend:
1. Not explaining the “why”: The iPad category was created by the sheer marketing magic of Steve Jobs. However, the positioning of the device was muddled from the start, unlike previous Apple launches that clearly explained how these devices would add value (1,000 songs in your pocket vs. a magical device).
2. Missing a key market trend: Apple missed a key trend in launching a smaller tablet, a trend capitalized on by Samsung and other tablet manufacturers who introduced smaller-screen tablets, leading to a loss of valuable time and market share. Even when Apple launched the iPad Mini, they launched a toned-down version, thus alienating loyal users.
3. Being all things to all people: Apple prides itself on making the best products and this demanding premium price. However, with the increasing popularity of the Android OS, consumers now have a greater choice for a much bigger price range. Apple, with its limited SKU strategy, has been struggling to compete on the lower end of the market where competition has been very active.
4. Not a true PC replacement: The Apple iPad killed the netbooks segment after its launch. However, with limited functionality (USB ports, SD card readers, HDMI output) the iPad set itself up more for light PC users, rather than heavy ones who needed PCs for these features (try typing a long email on an iPad touchscreen!). As a result the casual/leisure users moved to new devices or their PCS after a while vs. the corporate/heavy users who tend to more device-loyal.
As Apple gets ready to launch the new iPhone 6 next month, I think it’s a great opportunity for the organization to take another look at the iPad positioning. Although Apple says that more than 90 percent of the iPad users are satisfied with their devices, it would be great to study how the users are interacting with their devices.
In my opinion, Apple has a great opportunity to launch a big-screen iPhone to take share from the iPad and relaunch the iPad as a true replacement for the PC. Whether they are bold enough to do so will be revealed on September 6!