PCs and iPad: How did Apple address the competitive landscape – Part V

This is the fifth and final post about “PCs and iPad: How did Apple address the competitive landscape”. It has been a long way to make it to this post, and I really hope it has not been too much about the same topic, but I really did not want to leave the story half way because it makes sense all together. Even though this whole analysis was written for the iPad, many of the ideas here can be applicable to the Tablets in general and 2011 will shape the way the whole Tablet market will be defined in the future.

Following the same introduction as previous posts: In the first part you can read about Apple’s background, market overview and trends. In the second part you will read about the analysis of the competitive landscape and the strategic environment which Apple is targeting. The third part is about Apple company’s strength and the competitive map which shows where and how does the iPad fit among other products in the computer (named PC in the strategy radar of part II)  industry. And the fourth part finalised the strategy analysis defining some critical success factors of a tablet over the closest competitors and making some conclusions about the overall picture.

This post will just finalise the big picture adding long term impact conclusions, the managerial agenda that is proposed to be follow to keep the success of this product, and the references where you can find a lot of interesting information if you wish to continue reading about it.

So here we go!

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6.         Long-term impact

What will be the long-term impact of iPad within the PC Market? Technology analysts believe that a huge change in the PC industry will arise from the creation of the Tablet market. They predict that the Tablet PCs will outsell the Netbooks in a period no longer than 2 years. When that happens, the Tablet, with Apple-iPad as the biggest player, will take over the medium-high price / Technology Pragmatists market, outselling the e-readers and portable video devices as well. The Laptops will tend to start competing based on functionality and move right in the Competition Map (Figure 4).

It is important to mention that the Laptops manufacturers will continue their price war in the short-term, harming some market share from the Tablet PCs. Nevertheless, the Tablet PCs market is forecasted to be worth $13bn by the end of 2011 and grabbing 23% market share within the global PCs industry by 2015, accounting for 46m units [Deloitte, 2010]. In addition, by including iPad on Apple’s PCs sales, Barclays estimates that Apple can jump up to the third place in the overall PC market share.

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7.         Managerial Agenda

The steps to maintain its position in the PC Industry, Apple should address the following:

  1. Maintain and continue grow the iPad ecosystem flowing by investing in new Apps development. The strength of iPad will be strongly related to the number of useful applications.
  2. Preserve the expertise in content such as music, movies and games which are extremely important as part of the ecosystem mentioned in the point above. iTunes has been a crucial advantage in this area, but as everything in technology, evolution is the constant and Apple has to continue leading this evolution.
  3. Support Apple-iPad customers by a continuous innovation on software and hardware updates. This strategy will maintain the high desire for every new iPad version.
  4. Closely monitor competition specially the PC Tablets operating on Android OS. Google is becoming extremely powerful in the Apps and OS market by gaining impressive market shares. Android competition will be the one that could harm iPad’s market share the most.
  5. Adapt iPad ecosystem to local cultures and trends. Every market is unique and some minor software and Apps customisation might be necessary to increase attractiveness in international markets.
  6. Leverage the brand and its followers at the same time as target the core needs of the volume market. The iPad’s technical capabilities will be easily exceeded by the competitors, but as long as those capabilities are not crucial for the average user, the brand and image will keep the differentiation in the volume market and keeping the premium price.

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8.         References

4 thoughts on “PCs and iPad: How did Apple address the competitive landscape – Part V”

  1. The one factor I can’t bear in regards to the ipad is the truth that you cannot see flash content. That is I beleive the tabs with Android operating system are a great choice… even when the Android operating system drains your battery like crazy.

    1. Agree in both things…. I like to have the option to use Flash if I want so and not being limited by someone else decision. The iPad battery is amazing, I love it, but I guess I do not mind charge my tablet every night instead of every three or four days… I guess is part of the choice. Thanks for adding!

  2. Nice analysis with the SPACE and Competition Map framework.

    Evidently, this post was written much before Ipad2 was launched. I was wondering if you have plans to update this analysis with the strategic direction Apple has taken with 2nd version. After reading this analysis, I was wondering where the new position of Ipad2 should be on Competition map.

    Ipad2, as you might know, has the new processor which is far more powerful, even more than what a typical laptop packs and with tweaks through iOS 4.3, it has enabled its developer ecosystem to leverage the greater processing and performance power. Now I think, users would be able to do most of the regular work that one could do with a laptop, powerful or not. Could the expected proliferation of Ipad2 finally work its way deeper into the enterprise side ?

    The other thought I had was with the new features on the Ipad2 itself. Two cameras, new processor, a thinner form factor was this all Apple could come up with? I tend not to believe this, however what I would like to think is that this was a deliberate move from Apple to not pack the Ipad2 with features the competition hasn’t thought of yet. The competing tablets are still far from reaching the original Ipad’s value at a price that Ipad is sold for. So why should Apple reveal the features it has in house when it could pretty well blow out the competition with the bare minimum.

    Anyways, thanks for strategic analysis.

    1. Thank you for your comment!

      You are right, this was written before the iPad2 was out and it is a great idea to write an update of the main points with the new scenario. I think that together with all the improvements in this new version, cloud computing will also support the usage of the tablet as we use laptops today. Future looks really interesting!

      I also think that Apple normally does exactly what you wrote, they choose carefully the features in their devices and add new ones slowly according to what is in the market to be just better enough than current competitors. Then competitors rapidly offer better products (technically speaking) and that make the owners of the Apple product be so tempted to update their device every September… it works, and it makes Apple the Industry leader it is today. Smart, isn’t it?

      My homework: An update 🙂

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