As September closes and the holiday shopping season approaches, we expect near-daily developments in the burgeoning tablet market, and this week didn't disappoint. Here's our take on the headlines that caught our eye this week:
You're busy. And you have limited resources. But you think this iPad thing is big, right? But what about all these other tablets coming out? And Android TVs? And connected printers? Do you need to produce apps for all of these devices?
Welcome to the Splinternet. The bad news: Devices and platforms will continue to proliferate. The good news: There's action you can take now to build a framework for delivering your products and services on the platforms where it makes sense for you to be -- whether that's iPads today or wearable gestural interfaces tomorrow.
In a new Forrester report, we lay out the how-to of building such a framework. It's called POST -- People, Objectives, Strategy, Technology -- and if it sounds familiar, that's because we've written about how to use it to build a social media strategy, a mobile strategy, and now we're introducing it for the iPad and the whole category of "and" devices that will follow it. (You know...and Android tablets, and WebOS tablets, and connected TVs, etc.)
The iPad has been a huge hit with consumers: Only a couple of months after the launch, Forrester’s Technographics data shows that 1.3%, or 2.5 million, US online consumers report that they already own an Apple iPad, and an additional 3.8% (7.4 million) say they intend to buy one. The success of the Apple iPad has created a halo around tablets in general: About 14%, or 27 million, US online consumers say they intend to buy some kind of tablet in the next 12 months — more than any other type of device we’ve asked about.
A recent Forrester report “US Tablet Buyers Are Multi-PC Consumers” shows that it’s not all good news for PC manufacturers. Because, although consumers are getting excited about tablets in general, they're confused about what they actually are. This confusion probably means that not everybody that shows an interest will actually buy a tablet, but we do think it shows that there's interest in the category that goes beyond the iPad. PC manufacturers like Dell, HP, Samsung, Sony, and Toshiba need to offer consumers a bit of guidance on what a tablet is, what it can do, and how it complements the extensive range of devices they already own.
You are the CMO or the head of marketing for your company, and you’ve just finalized your social media plans for 2011 at the request of the CEO. Despite the unknowns out there, you are comfortable with your target audience, your message, your content plan, and the platforms you will use. You’ve even got a great candidate who loves the brand and wants to be the evangelist. But last week, your social media evangelist brought you an iPad to try out. You take it home for the weekend, you use it nonstop, and now you are thinking, “Where does this fit in my plans for next year?” While 2011 will see huge growth in spending on mobile advertising, and the display and search markets are back on track from the semi-slump of 2009, where does the iPad and other tablets to be announced from Google, Dell, Nokia, and others fit into your plans?
From a marketer’s perspective, the Web browser is pretty well understood — targeted banner ads that ideally would be integrated into content so as not to be intrusive. Mobile is getting cooler, and the ad platform to support visible ads on small screens is in the hands of the two (now) most popular smartphone platforms, Apple and Android. But this tablet segment seems to be gaining traction as a platform for what marketers dream of:
This is a phenomenal week to be covering the publishing industry. Tuesday, Apple released its quarterly earnings. Big surprise, another record-breaking quarter for the folks in Cupertino. A few billion here, a few billion there, blah, blah. How amazing is it that we're not really surprised by such overperformance in an otherwise still-troubling economic environment? Of great interest to me, the eReader guy, was the final iPad tally for the quarter ending June 26th: 3.27 million units worldwide. Still no good guidance on what the US split is, but no matter how you slice it, iPads are hot. (And, no, I still have not bought one, still holding out for iPad 2.0).
And if you follow the implications of that success, as many in the media have, Amazon should just concede the eReader business, pack up its cream-colored Kindle and go home, right?
Wrong. And to prove it, Amazon made a point of announcing some news of its own, the day before Apple's results were public. Amazon flaunted its own success in selling both Kindle devices and eBooks. That's right, despite that iPad upstart, the Kindle is still flying off the shelves, selling more units each month than the month before it all through Q2, when the iPad challenger was supposedly pummeling it. And it's dominating the eBook business as well, selling as much as eight in ten of the eBooks of major bestsellers, seeing its eBook sales rate triple over last year. Oh, and Amazon indicated it sells 1.8 eBooks for every hardback book it sells. That's right, even though it discounts hardbacks to paperback prices for many bestsellers.
We are getting many requests for help on iPad strategies for the enterprise. It's clear why. iPads are a tremendously empowering technology that any employee can buy. My colleague Andy Jaquith has a report coming real soon now on the security aspects of iPhones and iPads, and I'm launching research on case studies of iPad in the enterprise.
I am currently hearing about three business scenarios for iPad and tablets, but I'd love hear of your experiences, plans, concerns, or frustrations. Ping me at tschadler(at)forrester(dot)com. Here are the three scenarios:
Sales people out in the field. This is the "Hollywood pitch deck" scenario. The iPad, particularly with a cover that can prop it up a bit, is a great way to scroll through slides to show a customer or demonstrate a Web site. In one situation, I heard that there's a competition brewing for who can manipulate the Web site upside down (so the client across the table sees it right side up) without making any mistakes. Now there's a new skill for sales: upside down Web browsing.
Executives on an overnight trip. No, iPad doesn't replace a laptop (at least not yet; more on this below). But it's great for email, calendar, reviewing documents, and presenting PDF or Keynote decks.
I spoke last week at The Big Money’s Untethered 2010 conference in NYC. I couldn’t stay for the whole event, but I really enjoyed seeing Phil McKinney, CTO of the Personal Systems Group at HP, interviewed by James Ledbetter. He wowed the audience with a little show-and-tell: a flexible screen display printed on a mylar scroll that’s bi-stable (meaning that, like an E Ink screen, it can use very little power to display text) but can also display video at 60 hertz.
[Photo courtesy of ZDNet UK (not from Untethered, but it’s the same demo)]
According to McKinney, we’re about 24 to 36 months away from seeing this display make it into products on the market. Imagine walls papered with the stuff, furniture covered with it. Your “device” would be your portable connectivity, which would trigger your data to appear on one of these screens in your home, office, or public space as you approach. I’m envisioning something that looks like the world in “Splinter Cell,” which my gamer husband has been playing on our Xbox 360:
At The Wall Street Journal’s D8 conference in June, Apple CEO Steve Jobs compared the PC to a farm truck, saying that when America was an agrarian economy: “All cars were trucks because that’s what you needed on the farm. Now trucks are one in 25 to 30 vehicles sold.” Whether you think PCs will shrink or grow in importance seems to depend partly on semantics. During the same conference, Microsoft CEO Steve Ballmer countered: “I think people are going to be using PCs in greater and greater numbers for years to come. . . . The PC as we know it will continue to morph form factor. The real question is, what are you going to push.”
Our view is that the consumer PC market in the US is indeed getting bigger: Over the next five years, PC unit sales across all form factors will increase by 52%. In fact, desktops are the only type of PC whose numbers will be fewer in 2015 than they are today — and even desktops will benefit from innovation in gaming and 3D. We detail our findings in a new report, The US Consumer PC Market In 2015. Clients can read the full report on our Web site, but here are a few key takeaways:
Most of the news this morning at WWDC was around iPhone 4 and iOS 4. Will leave the new device and platform play to my colleague Charles Golvin. I can't wait to get one of the new phones . . . very slick as it looks like a mini iPad in a modified format.
iAd . . . $60M committed for the second half of 2010. Initial advertisers include: AT&T, Best Buy, Campbell Soup Company, Chanel, Citi, DirecTV, GEICO, GE, JCPenney, Liberty Mutual Group, Nissan, Sears, State Farm, Target, Turner Broadcasting System, Unilever, and The Walt Disney Studios.
Pretty impressive. How do they get to $60M? Rumor is that the minimum buy-in is $1M, but it goes up from there. They claim to have 50% of mobile ad market share according to a J.P. Morgan study. I think it is a bold claim unless this is purely the media spend and doesn't include creative. Our number is comparable -- but without creative. Advertisers can count on the buzz surrounding iAd's launch on July 1. That alone may justify the initial buy. These initial advertisers are a smart bunch. A few million dollars isn't much to any one of them, but these are sizeable buys for mobile.
I think there are a lot of interesting questions to be answered. Many will be "wait and see," but here's my wishlist:
- What do I get for $1M+ in mobile advertising? Am I buying creative, development, ads, and analytics?
- How much targeting do I get?
- Is it performance-based? Or CPMs?
- What will work well on the i OS4 devices? Branding? Or, will the ads leverage context -- the context of how, where, and when I use these devices? Will the ads drive me to online purchases or into a nearby store to make a purchase?
- How much control do I get over where my ads are placed?
As Apple announces it has sold more than 2 million iPads (no indication of US/global split), would-be competitors are unveiling their tablets at Computex in Taiwan. With so many products in the mix (and so few on the market), it can be hard for a product strategist to keep up with it all. So here’s Forrester’s quick guide to the tablets that are taking on Apple in the near future (note: this list doesn’t include devices that may have a tablet form factor but are primarily eBook readers, such as Acer’s planned 7” Android tablet. It also excludes tablets that are more rumor than reality. And I know just by putting together this list I will leave some off, and if that’s the case leave a comment and tell me which ones you think I should add. Okay, enough caveats!):