I’ve had my iPad 3G for a week. Two things are sure. Apple has a winner. And a loser. The winner? The iPad. To use it is to want one. Once you have one, you want to use it.
The loser? The Mac. iPads will cannibalize Mac sales. As iPad sales continue to grow, Mac sales—already at record levels and growing—will start to slow, then begin to decline. The iPad will do to the Mac what Microsoft and Windows PCs could not.
What Works Best? Mac Or iPad?
When Steve Jobs introduced the iPad he pointed out the obvious—the iPad is targeted between an iPhone and iPod touch, and a MacBook. In other words, Apple wants us to buy an iPhone (or iPod touch), buy a Mac notebook, and buy an iPad.
The reality is that iPad sales will cannibalize Macs and iPod touch sales.
How do I know this? Experience. The trend is unmistakable. Computer usage by the masses is going mobile.
The Mac as we know it—a full featured personal computer—is slowly going away, to be replaced by ever more mobile and increasingly capable devices.
What Started The Revolution?
A number of years ago Apple did something unthinkable (but typical for Apple). The company replaced the hot selling iPod mini—the most popular model—with the totally different iPod nano.
It’s deja vu all over again. The same thing is happening with the Mac. The trend toward handheld computing began in earnest with the iPhone. I’ve been something close to a Mac power user for many years, and I love my MacBook Pro. With iPhone in hand—my lovely, friendly, powerful MacBook companion—was often left behind, relegated to a desktop in portable drag.
In other words, my iPhone took on some of what my Mac notebook once did. Email. Browsing. IM. As iPhone apps became more sophisticated, my MacBook Pro traveled less. To be fair, the real heavy lifting is still required on my Mac. But lighter chores and many mobile events were moved to the iPhone.
The iPad Revolution Cometh
After one week with my iPad 3G I can comfortably predict that Mac sales—growing steadily in recent years—will plateau, then drop; probably within the next 24 months. That’s called cannibalization. Customers who once needed a MacBook find they can get by just fine with an iPad, hence no notebook sale for Apple to those customers.
I’m not the only one who sees the handwriting on the wall. Katy Huberty in Mac|Life presents a chart which displays falling netbook sales as a result of the iPad. Can the Mac be far behind?
Joe Wilcox in BetaNews says the iPad fills the gap between iPhone and iPod touch models and the MacBook.
But there is risk to Mac sales, which would be greater during back-to-school buying season than any other time of year. Suddenly the cheapest Mac that schools can buy costs $499, too. Particularly for K-12 institutions, iPad could be a viable alternative to MacBook, particularly with budgets crimped by the lingering effects of recession on the tax base.
Some analysts following Apple have already reported that iPad sales will not cannibalize Mac sales. What would you expect them to say? Anything negative would poke a big hole in Apple’s already overinflated stock price, so they toe the company line and utter words of reassurance to jittery APPL owners. John Paczkowski in AllThingsDigital:
UBS analyst Maynard Um surveyed customers in line to buy a 3G iPad in New York on Friday and found that only a handful hoped the iPad would replace their traditional computer. The other 94 percent said they were purchasing the device for Web browsing and personal entertainment. In other words, few people are under the illusion that the iPad is a $499 MacBook or a viable Mac replacement. In that sense, Apple truly has positioned it as a third category of mobile device.
Do you see the hole in that reassuring survey? The customers did not yet have an iPad. Once they have it, they’ll do just like the rest of us iPad owners—use their Macs less. Wndows PC owners who buy iPads will suffer the same—they’ll use their notebooks, netbooks, and desk top PCs less.
What the surveys are not yet telling is that the great masses of Mac and Windows PC users who only use their respective devices for email, web browsing, instant messaging, photos, movies, some games, and other odds and ends apps, will be enthralled with the ease of use and portability of the iPad. Next year, or the year after, when it’s time to buy another Mac or PC, they won’t. Joe Wilcox nails it:
Of course, Apple executives expect at least some cannibalization of Macs by iPad. Apple’s iPad pricing tells the story—the aforementioned filling the pricing gap between $399 and $999. Then there is the guidance about margins declines to consider. Cannibalization is inevitable. The questions are: “When?” and “By how much?” Will there be a big surge of iPad orders during back-to-school season or will the lower pricing release pent-up sales among consumers pining for a Mac but unwilling or unable to spend $999? Or both?
The money quote is: “Cannibalization is inevitable.”
Take My Mac Over My Dead Body
I know what you’re thinking. You’re a Mac user. You love your Mac. An iPad could never replace your Mac. But if you’re reading Mac360 then you’re probably not an average Mac user. As much as we try to focus our efforts on the basics of Mac apps, sprinkled with a little commentary on Apple, and a few pokes at Microsoft, most of our readers are above average Mac users.
The iPad is for the masses, not experienced Mac users with special computing needs.
As iPad apps become more sophisticated and powerful, many Mac and PC users will find the iPad is more than sufficient for their computing needs. That means replacement Macs and PCs that would be purchased next year or the year after—won’t be.
Slowing Mac sales could be disguised for a few years. Assume that the general economy picks up worldwide over the next 24 months. Increased Mac sales would parallel the prosperity. As the iPod and iPhone created a halo effect—which brought in millions of Windows PC customers to the Mac—the iPad will have a similar halo effect by bringing millions more Windows PC users into Apple’s stores—that benefits Mac sales, but only in the short term.
The trend is obvious and distinct. It’s all about usage. Once an average Mac or Windows PC user has an iPad (or an iPhone or iPod touch), the larger devices are used less and less. As the mobile devices become more powerful, with more capable apps, sales of Macs and PCs to many average customers will diminish. That spells trouble for Apple whose Mac profits rely on higher price tags and higher margins—both of which will feel the pinch of sales diverted to lower priced iPads.
I’m not ready to drop off my Mac at the nearest school for underprivileged kids. Neither are you. There are some things my Macs can do that my iPad cannot. For now. Let me repeat. It’s all about usage. For many Mac and PC users, their usage of typical desktops and notebooks will diminish in the next couple of years—usage replaced by increasingly capable and useful mobile devices. It’s already started.
That Mac you know and love? It’s a dinosaur.
