Today is a big day for Apple and I am curious to see exactly what they are going to pull out of their hat. No one is expecting anything mind bending for the new iPad and perhaps a new Apple HD TV box but it always interesting to follow nonetheless. The Apple 2.0 Blog has a few suggestions for those of us who wish to follow along but who are not in San Francisco at 10AM PST (1PM EST) – click here for suggestions.
Yesterday, I was fortunate to have a chat with a journalist who is associated with MSNBC and the story and my comments could be found here. For the sake of completeness, I included all of my comments to the journalist below.
My name is Daniel M. Ladik and I am as Associate Professor of Marketing in the Stillman School of Business at Seton Hall University. Your request was forwarded to me as my main areas of teaching and research expertise include marketing strategy and social media/Web 2.0, as well as, personal selling and sales management. I blog at www.dignuggetville.com. I am also an Apple aficionado – see previous Apple comments in Forbes Magazine (click here).
The question you ask has a very simple answer – YES and without question, tablets will replace PCs for the normal, everyday use (e.g., email, word processing, powerpoint, web surfing, etc). In one of his last conference appearances in 2010, former Apple CEO Steve Jobs explicitly stated “Welcome to the Post-PC Era.” On Valentine’s Day 2012 at a conference in New York City, current Apple CEO Tim Cook stated, “iPad sales are currently cannibalizing Mac sales, as well as, sales of all other PCs across the industry.” Mr. Cook also stated, “I am OK with that as I am never going to tell one of Apple’s product divisions to hold back and make an inferior product. In addition, I rather we cannibalizing our own sales than have some competitor do it for us.” (For exact transcription, click here).
Also accelerating the shift to tablets from PCs is the use of tables in the corporate world. In a January 2012 conference call with investors, analysts, and reporters discussing October, November, and December 2011 sales, CEO Tim Cook said more than 80 percent of Fortune 100 companies were using or testing the iPad, an increase from 65 percent three months earlier. (Reference, click here).
That said, I feel the more interesting question is not IF but rather WHEN is tablet sales going to overtake PC sales? Some analysts such as Gene Muster of Piper Jaffray estimates sometime in 2017 while other more aggressive predications such as Horace Dediu of Asymco suggests it could happen by Fall 2013. In my personal opinion, I see it happening sooner rather than later, especially if one combines the personal use, the corporate use, as well as, the iBooks initiative (and e-books in general) explosion with millions and millions of K-12 and universities moving to an all tablet platform for learning delivery.
How valuable is iPad to Apple financially? iPad is the cornerstone of Apple’s growth for the next 4 to 8 years. For the months of October, November and December 2011, Apple sold 15 million iPads that accounted for 9.15 billion dollars or 20% of Apple’s revenue for the quarter. In addition, the other cornerstone is iPhone. In the same quarter for 2011, Apple sold 13.4 million iPhones. In early March 2012, CEO Tim Cook struck a deal with China Telecom, China’s No. 3 mobile carrier and No. 1 Wi-Fi and fixed-line provider (total subscribers: 216 million). China Telecom has 38.7 million 3G subscribers, of which approximately roughly 15 million of whom are “high-end” users who could easily afford an iPhone. I can easily predict that iPad and iPhone will drive Apple’s stock price north of $600 per share by January 2013 when Apple releases its October, November and December 2012 results fueled by iPad 3 and iPhone 5 sales (reference, click here)
I hope this was helpful for your article. If you have any questions about the above comments or would like further detail, please let me know OK.
Associate Professor of Marketing
Stillman School of Business
Seton Hall University