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!
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.
7. Managerial Agenda
The steps to maintain its position in the PC Industry, Apple should address the following:
- 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.
- 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.
- 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.
- 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.
- 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.
- 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.
- Key Note Limited 2010, Computer Hardware Market Report 2010, Eight Edition, ISBN 978-1-84729-568-2, 2010.
- Euromonitor International 2010, Consumer Electronics 2010: Now Live, May 24, 2010.
- Harvard Business Review 2009, Rigby, Darrel K. et. al, Innovation in Turbulent Times, June 2009, 2009.
- Harvard Business Review 2002, Kim, W. Chan; Mauborgne, Renee, Charting your Company’s Future, Vol. 80 Issue 6, pg. 76.82, 2002
- Harvard Business Review 1997, Kim, W. Chan; Mauborgne, Renee, Value Innovation: The Strategic Logic of High Growth, Vol. 75 Issue 1, pg. 103-112, 1997
- Harvard Business Review 2010, Yoffie, David B.; Kim, Renee, Apple Inc. in 2010, Issue No. 9-710-467, April 13, 2010
- Janney Montgomery Scott Capital Markets 2010, Apple Inc., June 16, 2010
- Janney Montgomery Scott Capital Markets 2010, Apple Inc., July 15, 2010
- CNET News Business Tech, Report: Tablets to Outsell Netbooks in two years, June 17, 2010, viewed 3 August, 2010, < http://news.cnet.com/8301-1001_3-20008027-92.html>
- PC Advisor, 10 Tablet PCs to rival the Apple iPad, April 27, 2010, viewed 3 August, 2010, <http://www.pcadvisor.co.uk/news/index.cfm?newsid=3221222&&spotlight=3211144:p>
- ComputerWorldUK, Gartner: Laptops sales up 43 percent in Q1, May 25, 2010, viewed 3 August, 2010 <http://www.computerworlduk.com/technology/hardware/laptops/news/index.cfm?newsId=20425
- Channel Register, Gartner says world will buy 10.5m Tablets in 2010, March 5, 2010, viewed 3 August, 2010, < http://www.channelregister.co.uk/2010/03/05/gartner_revised_pc_forecast/>
- The Big Four Blog, Deloitte iPad’s sales predictions are right on the money, July 16, 2010, viewed 3 August, 2010, < http://bigfouralumni.blogspot.com/2010/07/deloittes-ipad-sales-predictions-are.html>
- AppAdvice, With iPads included, Apple’s PC Share Climbs, July 10, 2010, viewed 3 August, 2010, <http://appadvice.com/appnn/2010/07/ipads-included-apple-closes-dell/
- Marketing Value, Francois Wolf’s Marketing Blog, iPad’s Strategy Misunderstood, February 4, 2010, viewed 3 August, 2010, < http://www.marketingvalue.net/?p=1835>
- Image from: http://www.clipset.net/breaking-news-pro-ipad-y-anti-ipad-se-declaran-la-guerra/