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Why Apple might regret the Ipad

Comment: Ipad's success will kill its other products
Fri May 07 2010, 14:37
INQonipad

THE IPAD HAS DOOMED Apple, according to market anlaysts that are expecting the tablet to spell trouble for its maker.

While some pundits think that the company's latest toy might kill off the netbook, many have perhaps missed the true implications for Apple if the oversized Iphone does succeed as well as some fanboy media claim it will. Survey data from Alphawise, Morgan Stanley's internal research team, and investment bank Piper Jaffray have indicated that the products that are losing out to the Ipad are Apple's own.

Rather than killing off the netbook, the Ipad is harming sales of the Ipod and Macbooks. It seems the buyers of Ipads would normally have got a more expensive Macbook or an Ipod Touch and apparently are clever enough not to do both. The Alphawise report, just published, reported that 44 per cent of Ipad owners surveyed said they would forgo purchasing a notebook, and 24 per cent said the notebook they wouldn't buy would have been a Macbook while 20 per cent said it would have been a PC.

This Ipad downside for Apple was indicated earlier this year just after the shiny new toy went on sale. Then Piper Jaffray analyst Gene Munster surveyed 448 Ipad buyers and found that 99 per cent of respondents had not considered either an Ipod Touch or Iphone before making the purchase.

Apple's quarterly earnings numbers came too soon after the Ipad's release to see what effect, if any, the tablet PC had on the company's other products. Ipod sales have been decreasing and although Apple has blamed the Ipod Touch for cannibalising that market, if the analysts are right the Ipad has killed the Ipod Touch.

The survey data from Alphawise also shows a potential impact on non-Apple products. Customers that were not Apple product owners told the Morgan Stanley team that Ipad ownership would discourage them from buying e-readers, notebooks or handheld video game systems. Jobs may as well forget launching an Apple version of a Kindle or a PSP, then.

Where Steve Jobs made his mistake was that he marketed the Ipad as a utopian device that can do everything that all his other products can. This is dangerous for Apple because if the Ipad can be a laptop, an Iphone, a e-reader and a music player then you do not really need any of those devices. Since many of Apple's sales are to repeat customers the Ipad is likely to cause that company more harm than it would other firms.

We are still sticking to our belief that pretty soon people will realise that the Ipad is not really better than any of the devices it is replacing. Users will chuck a bit of gear that is only really useful as a heavy drinks tray. However it will be interesting to see what happens to the rest of Apple's products before they have that blinding realisation. µ

 

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