Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
The Central Bank Time Machine - 23rd Aug 19
Stock Market August Breakdown Prediction and Analysis - 23rd Aug 19
U.S. To “Drown The World” In Oil - 23rd Aug 19
Modern Monetary Theory Could Destroy America - 23rd Aug 19
Seven Key Words That Explain "Stupidly High" Bond Market Prices - 23rd Aug 19
Is the Fed Too Late Prevent A US Housing Bear Market? - 23rd Aug 19
Manchester Airport FREE Drop Off Area Service at JetParks 1 - Video - 23rd Aug 19
Gold Price Trend Validation - 22nd Aug 19
Economist Lays Out the Next Step to Wonderland for the Fed - 22nd Aug 19
GCSE Exam Results Day Shock! How to Get 9 A*'s Grade 9's in England and Maths - 22nd Aug 19
KEY WEEK FOR US MARKETS, GOLD, AND OIL - Audio Analysis - 22nd Aug 19
USD/JPY, USD/CHF, GBP/USD Currency Pairs to Watch Prior to FOMC Minutes and Jackson Hole - 22nd Aug 19
Fed Too Late To Prevent US Real Estate Market Crash? - 22nd Aug 19
Retail Sector Isn’t Dead. It’s Growing and Pays 6%+ Dividends - 22nd Aug 19
FREE Access EWI's Financial Market Forecasting Service - 22nd Aug 19
Benefits of Acrobits Softphone - 22nd Aug 19
How to Protect Your Site from Bots & Spam? - 21st Aug 19
Fed Too Late To Prevent A US Housing Market Crash? - 21st Aug 19
Gold and the Cracks in the U.S., Japan and Germany’s Economic Data - 21st Aug 19
The Gold Rush of 2019 - 21st Aug 19
How to Play Interest Rates in US Real Estate - 21st Aug 19
Stocks Likely to Breakout Instead of Gold - 21st Aug 19
Top 6 Tips to Attract Followers On SoundCloud - 21st Aug 19
WAYS TO SECURE YOUR FINANCIAL FUTURE - 21st Aug 19
Holiday Nightmares - Your Caravan is Missing! - 21st Aug 19
UK House Building and House Prices Trend Forecast - 20th Aug 19
The Next Stock Market Breakdown And The Setup - 20th Aug 19
5 Ways to Save by Using a Mortgage Broker - 20th Aug 19
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
GOLD BULL RUN TREND ANALYSIS - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19

Market Oracle FREE Newsletter

The No 1 Gold Stock for 2019

iPad Proves It’s Not What Apple Sells, It’s How Apple Sells It

Companies / Corporate News Apr 14, 2010 - 05:55 AM GMT

By: Money_Morning

Companies

Best Financial Markets Analysis ArticleKerri Shannon writes: Apple Inc.'s (Nasdaq: AAPL) iPad has lived up to the hype, garnering rave reviews and meeting sales expectations. That success is particularly impressive because previous attempts by other companies to launch similar products were met with abject failure.


Because they make up less than 1% of the personal-computer market, few observers realize that so-called tablets have been around for about twenty years now.

The first models offered detachable keyboards, pen-based applications, and were priced in the thousands. A few contributed to companies declaring bankruptcy shortly after their debuts. Most were as pricey as a laptop but without nearly as much memory or competitive features - "underpowered and overpriced" were the usual complaints.

But unlike Compaq's Concerto and the more recent PepperPad, which completely bombed, the iPad enjoyed a warm reception from consumers and critics alike.

Apple sold 300,000 iPads (including pre-orders) during the product's first day on sale, meeting average expectations. That total has since climbed to 450,000 units, and could reach 7 million by the end of the year, according to iSuppli Corp. Proud new owners downloaded about a million applications and 250,000 e-books.

One reason things were different this time around could simply be a more open-mined and tech-savvy consumer. The market for personal computers was still in a developmental phase when the Concerto was released in 1992. Since then computers have not only crept into the mainstream, they've taken on a variety of new shapes, sizes and capacities.

Additionally, the advent of cloud computing, better touch-screen technology, improved wireless Internet access, and social networking sites have carved out a nice new niche for the tablet. And Apple's patience in entering the market allowed the company to learn from competitors' mistakes and offer a more polished product.

Still, Apple did the heavy lifting.

The company's research and development expenses are a testament to how seriously it takes the process of creating new products: In the past four fiscal years, the company has spent $3.94 billion on R&D and raised sales in the same period by 89%.

Apple followed through on the marketing end as well. The company released online videos and ads to tantalize gadget geeks and fan the flames of public interest, in the months leading up to the iPad's release.

Article after blog after online video for months dedicated time and space to speculating on how many iPads would sell and how its release would change the computing industry. Even though no one would get answers until the actual release, iPad chatter became incessant and addictive.

Techies speculated over just how the iPad would change their worlds, analysts guessed at who the lucky component suppliers would be, and media companies lined up to strike deals, hoping to get their content in buyers' hands.

Apple's Web site even touts the iPad on its site as "a magical and revolutionary product at an unbelievable price."

Indeed, Apple's ability to drum up interest in the iPad has been a key factor in its success, perhaps even more so than the actual product. But that's also what keeps it from being a true game-changer, like the iPhone.

iPad Vs. iPhone
It's hard to compare the iPad to the iPhone. They each met with their own level of success and they both face their own unique challenges in the marketplace.

Still, their debuts were eerily similar.

The original iPhone sold 270,000 units in its July 2007 debut. That was followed in 2008 by the iPhone 3G, which sold over a million units in its first three days and the iPhone 3GS, which last year sold over a million phones in its first weekend, along with 10 million apps.

With 300,000 units sold in its first day, the iPad stacks up well against some lofty standards. That's especially true when you consider that the iPhone was released at a time when consumer spending had not yet been dampened by the financial collapse and the unemployment rate was substantially leaner than it is today.

But this all means very little going forward, because Apple will have to maintain a strong level of interest in the iPad long after all the hype surrounding its release fades away.

To that end, the company hopes the iPhone OS 4 - which will be released for iPhone 3GS and iPod Touch in the summer and for the iPad in the fall - will help buoy iPad sales. The new operating system will correct one of the biggest complaints against the iPhone and iPad by allowing users to use more than one app at the same time.

It will also be the platform through which Apple enters into a new world of advertising.

Through its new "iAd" system Apple will let developers embed ads into their applications, with Apple getting 40% of the revenue generated.

"We believe mobile advertising could drive the proliferation of even more premium games and content available for Apple devices and even allow the iPhone to become more of a device that drives commerce based on user preferences (which could be useful to Apple customers)," Barclays Capital wrote about iAd. "We believe this could be a multiple billion dollar business for Apple within the next few years."

The Playing Field Gets Crowded
Apple has lit a fire under competitors, some of which are finalizing their own tablet products for a 2010 release.

Microsoft Corp. (Nasdaq: MSFT) is expecting to come up with its own version of an iPad-like slate computer, and Nokia Corp. (NYSE ADR: NOK) is creating an e-reader.

"We're living in extremely exciting times right now," Olli-Pekka Kallasvuo, the chief executive of Nokia, told The New York Times. "It's quite challenging to define what industry we are in because everything is changing."

Hewlett-Packard Co. (NYSE: HPQ) is expected to release by mid-year its tablet, which has two features missing from Apple's: a camera and ports for add-on devices. HP says it has been working on the device for years but is delaying the release until the price can be lowered.

And Apple's arguably biggest nemesis, Google Inc. (Nasdaq: GOOG), is not only marketing its own Android software to tablet manufacturers, but is reportedly considering creating its own tablet computer and its own apps marketplace.

Besides the technology field, Apple's innovations are pushing waves of change through other businesses.

Now that e-reader products seem sure to fill the market, the publishing world will have to adjust accordingly in the years to come as digital books encroach upon their print counterparts.

Memory chip manufacturers like Samsung and Toshiba Corp. are looking at brighter futures as tablet computers and smart phones are in huge growth positions.

Despite the rivals trying to nudge into the market and companies profiting from the sidelines, Apple is already reaping the rewards.

Apple stock is currently trading at $242.29, and Deutsche Bank analyst Chris Whitmore reported he expected Apple's stock to hit $325 a share, up from a previous target of $250.

Source : http://moneymorning.com/2010/04/14/apple-ipad-2/

Money Morning/The Money Map Report

©2010 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or 72 hours after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules