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The tablet computer market will see 50 million units shipped in 2014, according to a new In-Stat report -- and if Apple (Nasdaq: AAPL) plays its cards right, a significant portion of them could be iPads.
In-Stat took several factors into account as it made its calculations, Jim McGregor, analyst and report author, told MacNewsWorld. "Right now, Apple can build these devices for US$400 and still make a profit off of them. But the cost will eventually come down -- and so will the price for consumers."
Apple may well have zeroed in on the inflection point for a new piece of consumer technology to do more than just elbow aside competing products with its new device, he added. Usually, new technologies become market makers when they deliver a new business model, new technology and new services or content.
A Caveat
Still, Apple needs to take care that it doesn't overreach as it goes to market. For example, it is on the cusp of cannibalizing the e-reader business model -- whose momentum Apple is riding to launch the iPad.
With the Kindle's debut, Amazon (Nasdaq: AMZN) wrapped a device, new content and wireless service in one offering with one price -- an example of a new product hitting consumer technology's "inflection point," McGregor said. Apple's iPad, however, is poised to slow down that momentum by setting higher prices for e-books.
It is also ignoring the long-held maxim in the tech world that consumers are willing to buy multiple devices -- especially special purpose devices such as e-readers -- but not to pay for additional service contracts, as they presumably would be required to do to get an iPad with AT&T's (NYSE: T) 3G wireless capability.
The monthly service charge will be a significant inhibitor to mass adoption, predicted McGregor.
Early Indications of Consumer Interest
Since its specs were released last month, there have been a number of estimates gauging the iPad's impact. The results have been across the spectrum.
Despite all the hype surrounding it, the iPad launch event did not convince a great many consumers to buy the device, suggests a survey by Retrevo. Still, the buzz dramatically increased awareness of the iPad, a notable accomplishment two months before its rollout.
The number of respondents saying they had heard about the Apple tablet rose from 48 percent shortly before the announcement to more than 80 percent following the event, according to Retrevo.
However, that brand awareness did not translate into plans to buy. Twenty-five percent of respondents said they had heard about the tablet but were not interested in buying one before the announcement; more than 50 percent were aware of it but not interested in buying an iPad following the announcement.
Another survey by ABI Research predicted that 4 million tablets will ship this year and by 2015, tablet shipments will reach 57 million annually.
Too Far Out
These surveys are too speculative to be of much value, Rob Walch, host of Today in iPhone, told MacNewsWorld. "It is too difficult to project out that far -- to 2014 or 2015 -- for a number of reasons, starting with the fact that you know Apple will have released several versions of the iPad by then."
Later versions could put to rest concerns that it may have no camera or that its multitasking capabilities may be inadequate, he said.
Wave of Developers
Demand for the iPad will be spurred by an even greater explosion of applications than the market has seen so far, predicted Daniel Klaus, principal of the newly launched AppFund, created specifically for iPad developers.
"Our view is that the iPad is transformational for both consumer and enterprise use," he told MacNewsWorld. "When you start to factor in anticipated enterprise use, the number of iPads could easily reach 50 million by 2014," he said.
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