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  • The iPad Report: Beginning to Outsell Macs

    May 31st, 2010

    According to Apple, in less than 60 days some two million iPads were sold. This is ahead of most early estimates that pegged sales for the entire first year at five or six million. What makes the figures more compelling is the fact that Apple remains seriously backordered, and the product is only beginning to roll out internationally.

    What, pray tell, might sales be if Apple could promptly fulfill the pent-up demand? It’s clear, based on these early figures, that the iPad is already poised to outsell Macs. What’s more, Mac sales do not seem to have been impacted negatively, which means that Apple has succeeded in building a totally new income stream that may grow beyond anyone’s expectations in the years to come.

    To be realistic, though, we’re still looking at sales to early adopters, people who are psyched to buy any new Apple gadget on the basis of the hype and its promise. It will probably take a year or two to know if the iPad truly has legs, and that will be obvious if sales continue to grow at a tremendous rate.

    It is certainly encouraging that the iPad’s customer satisfaction surveys are off the charts, over 90%. Yes, other companies are struggling to enter this market with their own would-be iPad killers, but there’s nothing to indicate any competitor can deliver an operating system that’s near as elegant, snappy and easy to use.

    That is the typical problem with Apple’s rivals. They can yap all they want about the wonderful features their hardware contains that Apple has yet to offer. They can even make their smartphones and tablets look pretty. That shouldn’t be hard for a team of smart industrial designers, assuming they are allowed to let their creativity flourish. To be sure, some of those products actually look pretty nice. But what about the operating system?

    The highly-touted contender, Google Android, suffers from the ills of other open source operating systems, which is that it lacks the spit and polish of a commercial product. So there many be features that trump Apple’s in some fashion, simply because they work better or perform functions that are not yet supported on the iPhone OS. But loads of customers who have compared Android against iPhone often conclude the former feels unfinished, performs inconsistently, and, in general, conveys the impression that it’s a beta product.

    The situation for the people who have purchased Android OS phones is murkier than that, however. Wireless carriers run the show, which means they decide when and if you’ll receive software updates. With a fair number of hardware configurations available, there’s no guarantee that any particular app will even run on your Android smartphone. This becomes particularly irksome now because, beginning with Android OS 2.2, you will finally be able to offload apps from the device’s built-in memory to the connected Flash card. Imagine that! And since there’s no guarantee that millions of Android users will be able to upgrade nor or ever, it ends up as a pretty chaotic situation.

    Worse, the Android OS so far barely pays lip service to the enterprise, which means that tens of millions of potential customers can’t use these products because of corporate policies. At the same time, according to AT&T, some 40% of all iPhones are sold to businesses, and Apple continues to add more and more enterprise features. Yes, Apple primarily goes after the consumer, but when that consumer works for a large company that routinely deploys hundreds or thousands of smartphones, that can add up to an awful lot of sales. No wonder the iPhone’s market share is closing in on BlackBerry, the perennial business favorite.

    There’s also clear evidence of dumping Android OS product into the channel. The latest two-for-one offers from Verizon Wireless are designed to get as many units into the hands of customers as possible, once they sign those long-term contracts. indeed, the product itself means little. All they want to do is sell you big buckets of minutes. The handset you buy may be a piece of crap, but once they hook you in, they hope you’ll renew when the contract is up and buy another piece of crap.

    My personal experience with Verizon Wireless has been dreadful. Their customer support people can’t answer the hard questions. When I tried to resolve a billing issue for my sister-in-law recently — after she couldn’t make them budge — even the simplest comment brought the response that I was deluded. They even suspended her service two days later not because her payments were late, but out of spite. Those of you who are hoping the iPhone will soon be available from Verizon Wireless ought to be careful what you wish for.

    In any case, when you consider Apple’s growing success in smartphones and now tablets, and how more and more people are using them in place of the traditional personal computer, I am convinced about the accuracy of my prediction for 2015: Most of the portable computing devices that people will take with them for business and personal travel will be smartphones and tablets. The PC era is definitely coming to an end, except for content creators who will, in increasing numbers, rely on Macs.

    Since Microsoft has so far failed to move past the 1990s, Office and Windows, they are in deep trouble. It’s a sure thing that Steve Ballmer has got to go, but whether they will find a visionary CEO who can save the company from its own excesses is anyone’s guess.

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