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TECH FORUM: APPLE iPAD: THE FIRST FIVE YEARS

By Michael Castelluccio
March 4, 2015
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If the measure is just money, not real estate or employees, then Apple is the largest corporation in the world. The company’s profits last quarter were a world-record $18 billion. Apple has achieved its current place by becoming a mobile computing company while the other shrinking giants are only tentatively shifting into the post-PC era.

 

Although more than two-thirds of Apple’s current profits are from the iPhone, the iPad tablet has also created its own revolutionary wake. Five years old now, the iPad debuted in San Francisco, Calif., on January 27, 2010. As one measure of the excitement generated that day, The Economist put Apple CEO Steve Jobs on its cover in a robe, with a halo on his head, and holding what the media had dubbed “the Jesus Tablet.”

 

The Hall at the Yerba Buena Center for the Arts was packed, and Jobs provided one of his most impressive performances as he explained for more than an hour and a half what this tablet computer was and what it could do. In obvious failing health from the pancreatic cancer that would end his life 21 months later, the event for Jobs took on a deeper significance. The tablet project epitomized his corporate philosophy. “The reason that Apple’s able to create products like the iPad,” he explained at the end of the presentation, “is because we have always tried to be at the intersection of technology and liberal arts—to get the very best of both.” Function and design shared equal status at Apple.

 

The tablet was beautifully designed, exquisitely executed, and brilliant in its technical prescience. But it was too different. Of the 800 e-mails Jobs received opening day, many were negative or skeptical. Critics carped: It doesn’t have a USB connection for external drives or PCs; it doesn’t have an obvious file management system, how can it be a computer; there’s no camera, no stylus. A small tide of criticism swamped the day’s events and quenched what fires Jobs hoped to ignite throughout what was still a PC-centric populous. He was seriously bummed by the response.

 

Then, in April, the iPad went on sale, and the public got its chance to try it out. It sold 300,000 units on the first day. By the end of the first week, the total was 500,000. In less than a month, one million iPads were shipped, twice the volume of the iPhone at its release. By March 2011, 15 million were sold. Walter Isaacson, Jobs’s official biographer, writes, “By some measures it became the most successful consumer product launch in history.”

 

What had allowed the public to catch up with Apple’s visionary designer? Isaacson offers an explanation posted by Michael Noer from Forbes.com: “Noer was reading a science fiction novel on his iPad while staying at a dairy farm in a rural area north of Bogotá, Colombia, when a poor six-year-old boy who cleaned the stables came up to him. Curious, Noer handed him the device. With no instruction, and never having seen a computer before, the boy started using it intuitively. He began swiping the screen, launching apps, playing a pinball game. ‘Steve Jobs has designed a powerful computer that an illiterate six-year-old can use without instruction,’ Noer wrote. ‘If that isn’t magical, I don’t know what is.’”

 

NOT INTEL INSIDE

 

Besides the obsessional pursuit of beauty and function, Apple has two other qualities that people credit its success to. The company’s normal business plan strives to own the hardware, the software, and the services all in a closed system. And Apple isn’t afraid to cannibalize its own products moving forward. The iPod music player was phenomenally successful, but then it was terminated and absorbed into the iPhone and iPad.

 

Today, IDC reports that the number one vendor for tablets is Apple (21.4 million shipped in Q4 2014), with Samsung lagging behind in second place with 11 million units shipped and Lenovo in third with 3.7 million. And the total sales for what Jobs called “our most advanced technology in a magical and revolutionary device” is today slowly edging toward one quarter billion shipped.

 

Since its release in 2010, the iPad has gone through six generations, with a new version appearing each year. The latest iteration is the very light, more powerful iPad Air 2. A wide variety of improvements have bolstered sales and increased Apple’s grip on the tablet market. And despite serious efforts from Microsoft and the retail monolith Amazon, the iPad has quite sufficiently answered a question Jobs posed during his demonstration five years ago: “Do we have what it takes to create a third category of products?” Back then, he answered his own question with, “We think we’ve got the goods.” And the public has since nodded its own assent.

Michael Castelluccio has been the Technology Editor for Strategic Finance for 21 years. His SF TECHNOTES blog is in its 19th year. You can contact Mike at mcastelluccio@imanet.org.


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