Apple iPad Trends and Statistics 3

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The Apple iPad

Trends and Statistics 3 November 2011



1

Going into 2012, The Apple iPad and The Apple iPad 2 nd themselves in an

ever-increasing pool o competitors. The market Apple created in 2010 has since

grown to become one o the key components in the technology industry, withhundreds o tablet devices now available.

As a result, a notable shit has taken place in the analysis o the device’s successas a product. Where it was once examined as a standalone product, it is now more

regularly judged against its competitors.

While this mode o analysis has changed, statistics and trends relating to Apple’siPad and iPad 2 still remain almost unanimously positive - Apple are on course to

sell 46.7 million tablet devices this year, 4 times larger than their Android Rivals.

In this third trends and statistics document, we will look at Apple’s current and

projected position in the market and display that although Apple is set to aceincreasingly sti competition; all signs suggest that the device will continue itstablet dominance or the oreseeable uture.

“

“ The Apple iPad did to the tablet PC market what theiPhone did to the smartphone market: re-invented it

Gartner.com

The tablet market continues to be summedup like this: the iPad and everything else.And everything else doesn’t amount to much

Cnet

“

“

Apple iPad - Trends & Statistics



2

1In our last report , we suggested thatthe iPad’s most signicant impact

would be the creation o an industry

almost overnight. At that stage o

2011, competitors were scrambling to

develop and release their own devices

that they hoped would rival the iPad’s

supremacy. This developer battle has

perhaps become the dening issueo the technology industry during

the latter months o 2011. For Apple,

the good news is that their market

domination has persisted throughout.

The iPad is currently untouchableas the leading tablet device

According to the IDC, Apple’s tablet market share actually rose to 68.3% o the worldwidemarket, up rom 65.7% in the rst quarter. During the same period, the number o devicessold by those operating an Android system ell to 26.8% rom 34.0%. Considering the

number o devices using an Android operating system, Apple remains way out in rontas the world’s most popular tablet device.

Current share o tablet marketplace by operating system

AppleAndroid

Blackberry68%

27%

5%

Source: IDC Market Intelligence



3

The customer base established by the iPad appears unlikely to erode as well. Accordingto a U.S tablet survey by Robert W. Baird, 98% of current iPad owners that areconsidering a second purchase are looking at another iPad.

There are several actors or both the market share and customer loyalty o the iPA,however put simply, the iPad and iPad 2 oer users the best hardware, the best sotwarethe most Apps, and now with iOS 5, the iCloud. New devices which do not have these4 components integrated in one ecosystem will continue to suer when compared toApple’s devices.

Tablet Planned PurchasingWho is the manuacturer and what tablet device are you planning on buying?

85%

4% 2% 1%

100%

80%

0%

20%

40%

60%

Apple

iPad

Samsung Galaxy

Tab

RIM

Playbook

Motorola

Xoom

Source: ChangeWave Research

August 2011



Although making a signicant impact on the technology industry, the tablet marketin 2011 is still in its relative inancy. The ‘newness’ o these devices has prompted somedetractors to label the tablet boom a passing ad, however orecasts rom industryanalysts predict year-on-year growth o the tablet device, with the iPad and itsollow-up devices maintaining their position as industry leaders.

4

2 Tablet devices are here to stay

Tablet Sales Predictions 2010 - 2015

Gartner

IHS

0

100

200

300

400

2010 2011 2012 2013 2014 2015

D e v i c e S a l e s ( M i l l i o n s )

As the graph illustrates, both Gartner and IHS have predicted a similar trajectory or

the tablet industry, with huge yearly increases leading to approximately 300 millionworldwide tablet sales recorded by 2015.

During this time, several notable milestones have been predicted or the industry.Research by Social Cast predicts that in 2012, more tablets will sell per year thannotebook laptops, and that by 2014 one in ve US consumers will own a tablet PC

(currently 8 per cent o Americans own a device).



5

Signicantly, analysts have been quick to emphasise that the iPad will retain itsposition as the leading device throughout this period. Gartner orecast that o the 326million tablets sold in 2015, Apple will sell 148m iPads. While this is a smaller share o

the overall tablet market, it would remain ar and away the most popular tablet device,and remarkably, the most popular operating system, with Android sales projectedat 116.4 million.

Tablet Planned PurchasingWho is the manuacturer and what tablet device are you planning on buying?

85%

4% 2% 1%

100%

80%

0%

20%

40%

60%

Apple

iPad

Samsung Galaxy

Tab

RIM

Playbook

Motorola

Xoom


August 2011

We ound that tablets appear to be takingincremental dollars away rom PC’s

William Power, Analyst at Robert W. Baird

““



Statistics published over the last quarter have given publishers the biggest signal yetthat consumers are adopting iPad magazine reading on a considerable scale.

In a survey o over 200 people, UK marketing and analytics company imano oundthat 69% o those surveyed regularly use their device as a magazine or newspaper

reader. These consumer habits are expanded urther by Gartner, who in May oundthat 52% o those who read magazines on the iPad actually ound the experienceeasier than reading a print copy, while 42% said it was just as easy.

6

3 Magazines are set or ahuge sales boost on the iPad

How easy do you nd the iPad magazine reading experience

Easier than the print version

As easy as the print version

Less easy than the print version

52%42%

6%

Source: Gartner

iPads and tablets appear to be very conducive todeeper, more inormation-packed experiences

Localytics

““



7

It is important that publishers recognise the huge potential or the growth o thismarket, and the credible predictions being made about its growth. PriceWater-

houseCoopers have recently estimated that by 2015 the North American digitalmagazine market will be worth. This indicates massive growth o what was

considered a $4million dollar market in 2010.

Perhaps best emphasising the huge potential or Magazine apps currently is theNew Yorker Magazine. According to statistics 20,000 people have purchased annual

subscriptions at a yearly rate o $59.99 in 2011, and “several thousand” have purchasedindividual issues at $4.99 each. According to Conde Nast estimates, the New Yorkeralready has an audience o 100,000 readers on the iPad.

Representing a signicant milestone or magazine publishers, Apple launched

its Newsstand service or the iPad on October 12th. The new service afords

newspapers and magazines a higher prole, dedicated space within iTunes

and is set to act as the primary sales channel or digital magazine editions.

Since its recent release, the channel has been responsible in some cases or

a huge 268% Digital magazine sales increase.



More and more companies are seeing the benets o deploying tablet devices in the

workplace. Although perhaps less publicised than its success as a commercial product,the iPad has already proven an essential business tool or many companies, and remains

the corporate tablet device o choice.

8

4 The iPad is the dominantenterprise & consumer tablet

Corporate Tablet Demand - A Comparison May 2011 vs August 2011

For those companies buying Tablets in the next quarter,

who is the manuacturer o the Tablets your company is planning on buying?

100%

80%

0%

20%

40%

60%

Apple Samsung Dell


6% 7% 6% 5%

Motorola

10%

4%

80% 80%

RIM/Blackberry

8%3%

Although consumers have been using mobiletechnology or a while, in the last year, there has

been an awakening on the corporate sideGeorge Ravich, CMO at Fundtech

“

“



9

As this recent Changewave survey displays, Apple’s position as the dominantcorporate tablet has not deviated over the past quarter. Signicantly, this 80 per centshare is o an increasingly bigger pie. According to data by rom technology researchgroup Gartner, by 2013, 80% o businesses will support a workorce using tablets.

The proessional landscape most altered by the iPad is undoubtedly the mobile

technology industry. While this may seem obvious, it is an interesting sector to look at as it is the orerunner or tablet usage trends that may emerge more universally inthe uture. For example, according to a Social Cast survey, 27.4% of mobile workers

believed the tablet could replace the laptop as the mobile device o choice in theuture. While this may not be set to happen immediately, it is an interestingprojection rom those who work with these devices the most.

Every single organisation that is dedicated to digital should

be spending the majority o their time, eort and resource

optimising or smartphones and various tabletsBonin Bough head of digital at Pepsico

“

“



Purchases made on the iPad continue to act as a good indicator o the devices popularity,and how well they have been adopted by their user base. In the last quarter statistics have

emerged to suggest that both internet browser and app purchasing has massivelyincreased, and has the potential to grow much urther.

10

5 The iPad is a purchasing machine

Signicantly or retailers, research has shown that owners o the iPad spend more moneyvia the device than through any other platorm. The Wall Street Journal has reportedthat, on average, PC and Laptop users buy a product 3% o the time, whereas a consumerbrowsing on the iPad or iPad 2 has a conversion rate o between 4-5%.

We see [the iPad] as a key growth vehicle

Claire Watts, CEO of QVC

“

“

Tablet owners tend to be wealthier, which givesretailers a sel-selected audience o their best customers

Dana Mattioli, Wall Street Journal

““



11

These estimates are refected in the results o Imano’s survey into iPad usage, which

ound that 48 per cent o iPad users spent the most money through the device, whileonly 19 per cent said they spent most through their computer.

The same survey ound that customers are growing ever more willing to purchase apps.

A third o those surveyed have paid or 20-49 apps or their device, and just over 1 in 10have bought 50-99 Apps.

Source: Imano

10 to 1924%

20 to 4933%

0 to 926%

50 to 9911%

100+6%

How easy do you nd the iPad magazine reading experience

iPadMobile PhoneLaptop

Source: Gartner

Laptop16%

Computer19%

Cable/Internet TV 4%

MobilePhone

11%

iPad48%

I Don’t Spend

Money on a Device 3%

ComputerCable / Internet TV

Don’t Spend Money on a Device

How many Apps have you paid or using your iPad



An App ormat that is thriving on the iPad and the iPad 2 is the Catalogue shopping App.As we’ve already highlighted, e-commerce is proving to be hugely popular on the device.

Although internet browsing might be the traditional way to shop online, many retailersare nding that a catalogue app is a perect t or the device.

A survey rom eConsultancy has ound that 54.4% o UK shoppers have used a catalogue

beore making an online or in-store purchase this year. With an interactive catalogueApp, which is tailored to mobile shopping, the route to online purchase can be reduced

signicantly.

This has been proven by online shopping research TheFind, who have ound that theconversion rate on its catalogue app is about 10% higher than on its website, andaverage order size is between 10% and 20% higher.

12

6 Catalogue apps are fourishingon the iPad



A look at YUDU’s own catalogue apps shows that users are engaging with the contentand the retailer themselves. Across our catalogue apps 39.4% o users supply opt-in datathat then becomes the property o the company. This data aords retailers up-to-date

inormation about their audience demographic and can allow or better targetedadvertising campaigns.

Tablet users are spending three times as much timeon the catalogue app than on the website

Wall Street Journal

“

“

13



14

7 ConclusionAlthough the tablet landscape has changed dramatically throughout 2011, the iPad and theiPad 2 remain the benchmark by which all other tablet devices are judged, and i the quarterhas proven anything, no device is yet to meet the loty standards set by Apple’s devices.

“Both the current and projected sales gures have proven that the iPad is still king in thetablet market, and will remain the key player in an industry that is set or unprecedentedoverall year-on-year growth up until at least 2015.

But the newest threat to the iPod’s tablet dominance is perhaps the largest. Amazon’sKindle Fire looks set to oer a unied service that rivals the iPad’s own. Amazon’s

established presence as a content-delivery channel, already in possession o millions o

consumer’s details, encouraged the pre-ordering o around 95,000 devices on the rstday o pre-release.

While this may be slightly troubling news or Apple, the larger pool o tablet devices canonly be considered as a positive or digital magazine publishers.

As we reported in a recent blog post, the Kindle Fire will be geared towards mediaconsumption, and in particular, interactive colour reading experiences. It is truly excitingand encouraging or Amazon to put their name to hardware that allows or this kind o

reading.

Perhaps what it emphasises more than anything however is the enduring potential

o the industry, and how important digital reading experiences will be in this overallgrowth. I Amazon’s aith is well placed, 2012 looks set to be a huge year or tabletmagazine publishers and the devices they are viewed upon.

Apple delivers a superior and unied user experience acrossits hardware, sotware and services. Unless competitors can

respond with a similar approach, challenges to Apple’sposition will be minimal

Carolina Milanesi, Gartner Research

““



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Apple iPad Trends and Statistics 3

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