When Will Apple Sell the 100 Millionth iPad?

by Benjamin Domenech on 4:43 am June 24, 2010

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A few weeks ago, I wrote on why the iPad won’t save newspapers — in fact, I think for some papers, it will accelerate their decline as relevant media organizations (nutshell prediction: middle-tier papers will disappear, and instead hyper-local media organizations and national/global ones will survive). I received some interesting responses to my piece. But I want to take the time to respond to the most common argument I heard in response, which bypassed my overall point: the general argument that the iPad is such a “game changer” device, creating a new pattern of how media is consumed, because eventually “everyone will have one or something like it.”

Well, yes and no. Is the iPad a game-changer? For some people, yes. Who are those people? Well, so far, we know that this device is overwhelmingly favored by 30-44 year males with six figure incomes, the top 5% of Americans earners. Half of them already own an iPhone. Essentially all of them already own multiple other devices, desktops and laptops, and the majority of them own another Apple device. In other words, these are wealthy male power users for whom the iPad is a cutting edge device for both entertainment (the largest site usage is for Flickr, followed quickly by Sports) and news (Finance and News sites also rank high).

This is obviously an extremely desirable demographic, and the ingenious part of what Steve Jobs and his team have achieved here is cornering a closed sale pathway to the group most likely to retain an interest in shiny objects and the disposable cash to purchase them in a time of overall economic decline. It will, as its price drops, likely destroy the netbook market — and while the Kindle is by all accounts a better e-reader, the iPad is sufficient to destroy it, too (Not for me, my eyes hurt after five minutes of glare. But which one will you bring on a flight?).

Yet the reason I am unconvinced that the iPad is a game-changing device in the broader social sense is because I don’t see the same level of buy-in that came with the iPod.

Apple has sold 250 million iPods. They dominate the entertainment scene with this device in its various forms. While at some point their rising sales patterns will probably diminish (thanks in part to Apple’s other products stealing their thunder), they are relatively inexpensive and common.

The iPod is a game-changing device because it is not a luxury purchase — it cuts across all incomes, age groups, ethnic backgrounds, etc. Americans have cast off prior devices to make the iPod the primary device by which they consume music: in the car, at home, etc. It took just six years for Apple to sell 100 million iPods (random trivia: one year more than it took the Nintendo DS to reach that mark), but more interesting and far more profitable was that in that time, they also sold more than 2.5 billion songs, 50 million TV shows and 1.3 million movies through iTunes. In so doing, Apple made profiting from other people’s creativity completely acceptable, and they destroyed the album model for all but the working class (more on that in a minute).

The difference I see in the iPad is that it is fundamentally limited to being a secondary device. It is about consumption far more than it is about creation. While it certainly has work applications, the limitations inherent in its design prevent it from being the machine of choice for most non-power users — and as such, it’s a supplementary device, not a replacement.

I think that what’s more likely to occur in this space is a dramatic widening of the gap in how media are consumed. Niche tech publications will almost certainly be the first to become iPad + online only, followed by other niche pubs — we’ve already seen this occur with the reboot of Gourmet, which failed as a magazine but will now aim for success as an iPad app + social network — even as aging newspaper readers remain loyal to the printed form. The print market retains a high level of appeal for the non-wealthy, and I think there are certain things — glossy celebrity magazines, for instance — which will continue to sell well in the future, just primarily to the working class.

This isn’t to say John Edwards was right about the Two Americas thing. But there are key class differences here, not just in what we read and watch but more and more in how we read and watch. Gateway devices like the iPad push the matter forward by pulling the most desirable advertising targets — male consumers with disposable income — from the print marketplace. So who will speak to the people they leave behind? And when they do speak, will the only type of communication that makes sense be of the entertainment variety, encouraging the disconnect that already exists between the informed and the indifferent, as we face 10% and higher unemployment for the foreseeable future? Yes, people can be successful outside iTunes, but what does that look like? Well, it looks like people who sell to the working class and lower earners — there’s a reason Rock N Roll Jesus went to number one. I think the same pattern will emerge in other media forms with the iPad.

The dominant news paradigm is now a simple one: Americans expect to pay to be entertained or receive niche information, but not to gain access to breaking news. On both counts, the iPad and its inevitable competitors rapidly accelerate the pre-existing process.

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