Will iPad perform in the market as expected?

This is my first graduate school paper at Florida Institute of Technology, which is based on an article originally posted on Entrepreneur’s website. Please note before reading this article that going into this paper, I was firmly against the iPad and did not believe there was any marketability for this product. As you will see, it absolutely has a very stable and growing market waiting for its release on April 3rd. Once again, Apple has amazed me… it was just a VERY delayed reaction.

Please post your reactions and thoughts.

Without further delay:

Will iPad perform in the market as expected?
Russell J. Zera
March 24, 2010
Florida Institute of Technology

Will iPad perform in the market as expected?

        While the iPad’s marketability debate is not nearly as heated as the Mac vs. PC debate, I believe that much of the argument spills over, as adversaries of the iPad seem to be more PC-based users, while Mac-based users are seemingly more likely to rave over the new creation from the desk of Steve Jobs. And while I could spend pages and pages going over both sides of the argument, I would like to instead give you a brief viewpoint on one person’s perspective on the product’s viability in the marketplace. To provide this viewpoint, I will present you with three main factors which I used to reach my conclusion: Usability, marketing target consumers, and finally business impact.

        Even without the product being physically available yet, and not shipping until April 3rd, most consumers already have a fairly good grasp of how the iPad will look, feel, and function. The explanation for this is quite simple, Apple decided to design the hardware and operating system to look and function similar to an already existing and significantly successful product of theirs, the iPhone. I believe this decision, while questionable at first, was a very strong and wise decision by Apple. Moon’s (2010) article cites the similarities as he identifies e-mail, web surfing, multimedia functionality such as sharing pictures and playing music and video, as well as downloading games and applications from the iTunes App Store, as commonalities between the two products. On top of these capabilities, the product also allows the user to read eBooks purchased from the iTunes App Store, a very rapidly rising trend in the world of publication commerce.

        By utilizing a proven product as their baseline, Apple has been able to successfully fill the void in the market that exists between smart-phones (i.e. iPhone, Blackberry, Palm, etc) and regular desktop/laptop computers. While this market may currently appear to be a very small niche group, I believe that it may prove to be much larger than expected as you consider the potential user-base that Moon (2010) addresses in his article. The first group to potentially benefit would be those in the mid to upper echelon age grouping who enjoy the social aspects related to computers but prefer to avoid the complexity associated with desktop and laptop computers. iPad satisfies this group with its intuitive touch-screen design, user-friendly app design software packages which only show the simplest and most common utilities and functions on the screen, and larger screen than the iPhone to allow for larger buttons, larger resolution, and more flexible user experience.

        The second group to benefit is the highly mobile users. Those users who travel often, or simply prefer to stay connected and have a computer with them throughout the day, would definitely benefit from the iPad’s lightweight design, optional Wi-Fi connectivity, and overall smaller size when compared to the traditional laptop. This group also includes students who, for a majority of their day, currently carry around several textbooks, notebooks, writing utensils, and maybe also a laptop as well. With the iPad, students can take digital notes in class, access their textbooks instantly in digital form (Textbooks are being converted to eBook format at alarming rate by publishers), and still access their personal social networking sites between classes. (Moon, 2010) When you begin to count all the users who fit into the above listed categories, suddenly that small ‘niche’ group begins to look incredibly sizable.

        Finally, the biggest deciding factor in the outcome of iPad’s performance in the market will be based on how businesses and industries embrace the new device medium. Businesses have already begun to embrace App development for mobile devices such as smart-phones, so there will be very little risk or change in cost of development to outfit existing Apps over to support the larger screen resolution of the iPad. Having users with ultraportable devices like iPads will expand the online community and allow businesses to potentially market to consumers based on their current physical location. Imagine the marketing implications of being able to walk into a store, your iPad accesses the store’s available Wi-Fi hotspot, and your screen brings up that store’s webpage with links to current promotions, a store layout map, even product pricing. You have now engaged that customer in a new and more intimate way, allowing them to feel more comfortable in your store, and potentially more comfortable in purchasing your merchandise. The most recognizable increase in iPad business will surely be the eBook business, as Moon (2010) points out that this is one of the primary methods Apple seems to be developing the marketing for the device. Creating eBooks has become increasingly easier for businesses and content producers to accomplish, costing less money and labor-hours to produce than traditional publications, which translates into a significantly higher profit-margin. Moon (2010) also points out that eBooks also provide a much more diverse distribution method, as it is easy to post eBooks on iTunes, or even embed the eBooks in your current webpage.

        In conclusion, I believe that, while the iPad may have an initially slow start in the market on April 3rd, it will quickly pick-up pace as users begin to interface with the product and engage other users of the iPad. As with most Apple products, the initial customer base will be there at launch, the only primary deciding factor will be if businesses have products available and in-place when the flood-gates open.

References

Moon, Allen. (March 15, 2010) How the iPad Will Change the Way You Do Business.
Entrepreneur,
Retrieved from http://www.entrepreneur.com/ebusiness/ebusinesscolumnist/article205580.html