iPad carves its own path through the computer market competition

Melbourne Herald Sun, Friday 29 October 2010

If you'd asked me eight months ago when they first came out I would have said that an Apple iPad was too limited to compete with laptops, and too cumbersome to compete with mobiles. It was an orphan with charisma but nowhere to go.

Fortunately, Steve Jobs never took my call and Apple have sold 350,000 iPads in that time, which by my calculation is about $200 million.

And that's in Australia alone, world-wide the sales are projected at five million a quarter, so you can safely say he now is yet more billion dollars richer.

What my theory didn't allow for was the possibility of iPad creating its own market, like a glacier carving a valley through the Himalayas.

In a newly-released analysis, Sydney telecommunications research group Telsyte delved into the uses these iPads would be put to. A clear winner was the "Facebook phenomenon", the explosive growth of social communication through Facebook, MySpace and similar applications.

What the buyers aren't doing so much is viewing movies, sports or newspapers . For those they tend to prefer a desktop computer or a TV. And as yet iPads don't have phones or cameras built in, so those functions safely remain with the smart phone.

Another research company, Gartner Australia, has also been watching the phenomenon. Their research director Robin Simpson observed an unusual pattern, he reported recently. The push for iPads has come from up above.

He explained: "It's a top down push which has never really happened before for a consumer technology." The past pattern - going back to the birth of personal computers and private mobile phones - has been a gradual filtering up from the bottom. Young, enthusiastic staff would snap up the application and gradually the bosses would take notice.

"This time," said Mr Simpson, "it's completely different." It's now the executives who want the toy and are introducing it into the corporation.

The slow response to paid on-line newspapers hasn't stopped the media moguls who well understand that this is where the future lies. This paper's boss, Ruper Murdoch, has loudly promoted internet news subscriptions. With his usual determined persistence he has seen The Wall Street Journal, The Times of London, and even our local The Australian, slowly clawing in the subs.

Compared to the hard copy sales, the numbers are still tiny, but nevertheless rapidly growing.

I recently discovered that the iPad was developed before the iPhone, but then put in the freezer for three years. This would explain why it still has no telephony.

But despite the caution there has been some cannibalism, at the low end of the MacBook line. The greater damage, though, has been to other manufacturers' computer notebooks. iPad has gobbled up 25 per cent of that market already.

In a counter-offensive, Telstra has taken alliteration to new highs this week, in naming their Telstra T-Touch Tab. With a smaller 17cm screen, they hope to dent the iPad's progress at half the price, with telephony and camera.

Certainly retailers are happy, expecting that the revived interest in yet another wave of computers will bring them Santa for Christmas over the next two months.