Tuesday, January 18, 2011

2010: officially year of the iPad

The first earnings call since Steve Jobs went on medical leave showed spectacular results.

iPad sales totaled 7.33 million in the latest quarter, in addition to 7.46 million in the preceding two quarters. The total is 14.79 million of (according to IDC) 17 million tablets sold in 2010 — 87% of the worldwide market. IDC projects 2011 sales at 44.6 million (not 44.5 or 44.7!), and my SWAG is that (assuming realistic product proliferation) Apple will account for 30 million of those.

The iPad in 3 quarters outsold the 10.8 million 2010 sales estimated by IDC for all ereaders, and the 14.7 million projected for 2011. The iPad has a unit sales volume 3.3x that of the Amazon Kindle (perhaps 4.5m in 2010) and has an ASP of 3x as much.

If the tablet market does grow to 45 million in 2011, then ereaders will be consigned to a relatively small role in mobile device, as tablets are increasingly used for reading magazines and perhaps even for reading books. The black & white E Ink is a transition technology, to be replaced by the color E Ink, Qualcomm’s Mirasol, or other technologies.

So 2011 seems like a good time for techies to buy a cheap web-enabled tablet to understand the form factor, its use case and limitations. It will also mean that the countless Android vendors fighting for #2 need to consolidate their gains.

Samsung sees itself the favorite, and as their cellphone growth threatens #1 Nokia, they would be risky to bet against. I think B&N (with their nookColor) has the enviable position in the US, but they need to license or distribute the technology worldwide to gain scale economies.

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