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The Apple iPad: Trends & Statistics 2


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Digital publishing company YUDU Media has followed up its previous iPad trends and statistics report with a new whitepaper, which examines relevant new information that has emerged since the first iPad report. The whitepaper dissects the vast quantity of iPad research, and compiles it in sections examining trends in apps, publishing, eCommerce and advertising, amongst others. In addition, ‘Apple iPad: Trends and Statistics 2’provides new information on trends and statistics identified in the first iPad report.

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The Apple iPad: Trends & Statistics 2

  1. 1. The Apple iPadTrends and Statistics 2February 2011 Brought to you by web & iPad publishing specialists
  2. 2. Apple iPad - Trends & Statistics 2 “We are ring on all cylinders and we’ve got some exciting things in the pipeline” “ “ Steve Jobs, Apple CEOSince our rst iPad trends report, published in October 2010, the device hascontinued to break boundaries. As Apple’s most successful product in its rst yearon sale, it would not be an exaggeration to say that the iPad has revolutionised thepersonal computer market and the technology industry as a whole.Its immersive, enjoyable and personal take on the mobile computing experiencehas proven extremely attractive to consumers and developers alike. The impactof this innovative approach to mobile media computing has been re ected in itsunparalleled success in the market.In just under a year on sale, upwards of 14.8million iPad’s have been sold around theworld, with 7.3 million being sold in the 2010 Christmas quarter alone. In this Q2 report we highlight further evidence of trends identi ed in the previous quarter’s report and discuss even more trends and statistics that have emerged since. 1
  3. 3. Quarter one trends update Since our report on the rst quarter of iPad results, further studies and research has been carried out which support and, in some cases, exceed previous gures. Below are some brief updates where more up to date statistics were available.• iPad is fast becoming the most popular mobile deviceMorgan Stanley analyst Katy Huberty projected 16 million iPads would be sold inthe rst 12 months alone. In fact, approximately 14.8 million were sold in the rstnine months on sale. These gures, released by Apple, suggest iPad sales will in factexceed her predictions.Previously, a Yahoo survey stated 35-44 year olds made up the greatest proportionof iPad owners, but according to a Neilsen Company report conducted in December2010, 25-34 year olds now make up the core ownership of iPads.At the time of the last publication, it was only known that consumer awareness ofthe iPad was ‘very high’. Adage have since reported in January 2011 that 90 percentconsumer awareness amongst people surveyed. The same studies also found 21% of18-34 year olds intended to buy an iPad. 2
  4. 4. • iPad is changing the rules of digital publishing Despite the unprecedented initial magazine app sales reported in the quarter one report, the extremely high launch sales of a number of high pro le eMagazines somewhat distorted their rate of adoption on the iPad as a whole. More recent studies have shown that these gures have dropped after the initial issues. has reported that sales performance of eMagazines on the iPad roughly correlates with the title’s performance on the news stand, which show a higher initial sales for launch.• iPad is becoming a major gaming platform According to gures published by the app store analytics company Distimo, Gaming apps maintain the highest proportion of apps for the iPad, however they do not account for quite such a high proportion of all apps. In our previous report we highlighted the gures of April 2010, which showed that around 30 percent of all apps for the iPad were games. In contrast to this, gaming apps now represent only 23 percent of all iPad apps.• iPad is creating a netbook sales drop The decline of Netbook sales reported in the Q1 ndings appears set to continue in 2011. Acer’s sales manager has stated that this year “tablet launches will begin a gradual replacement of Acer’s small laptop-style netback computers, in line with market demands”. 3
  5. 5. • iPad apps are bringing in more revenue for developers and publishers While there is no direct update to the research from Distimo, which reported the average iPad app costs $4.67, they have released an encouraging report which states that: “paid downloads increased almost 30% more than free downloads in the top 300 in December 2010 compared to June 2010”.• iPad internet usage is at a par with traditional PC’s Further supporting our ndings in our Q1 report, in December 2010, Chitika, an online adverting network, reported that 0.83 percent of internet usage was generated through the iPad. It reported that it is currently on a par with all Linux product’s internet share.• iPad is becoming adopted for commercial applications It was previously reported that 50 percent of the Fortune 100 were using iPads for commercial use. Far more impressive gures announced by Apple now state that over 80 percent of the Fortune 500 are currently deploying or piloting the iPad. 4
  6. 6. 1 Apple’s App Store continues to dominate the app store market “Many are wondering if the app frenzy we have been witnessing is just a fashion, and, like many others, it shall pass. We do not think so.” Stephanie Baghdassarian, “ “ Gartner ResearchIn the past 12 months, application downloads from Apple’s App Store haveskyrocketed. Figures published by Apple state that seven billion apps weredownloaded from the store in 2010 alone, with the achievement crowned by the tenbillionth download in January this year. “The App Store has surpassed our wildest dreams” “ Philip Schiller, Senior vice president of worldwide “ product marketing, Apple IncSuch rapid growth of Apple’s app market in 2010 can in no small part be attributedto the iPad’s popularity during the same period. According to research carried outby The Neilsen Company, 91 percent of iPad owners have downloaded at least oneapplication for their device, with 63 percent of those downloading a paid application. 5
  7. 7. Source: The Nielsen CompanyThe iPad’s popularity has no doubt been a factor in Apple’s continued dominanceof the app market. Gartner research found that 9 out of 10 app downloads of anestimated 8.2 billion were from Apple’s app store.It is therefore no surprise that the same research company are forecasting App salesof $15 billion in 2011 - a gure that is nearly triple the $5.2 billion Apple made fromthe App store in 2010. “We estimate that Apple’s App Store… will remain the single best- selling across our forecast period” “ Carolina Milanesi, Vice President, “ Gartner Research 6
  8. 8. 2 Revenue generated from in-app purchase is increasing “Apple will be the number one platform for a long time from a developer perspective, they have gotten so many things right….And paid content just doesn’t work on Android.” “ Peter Vesterbacka, Developer, “ Angry BirdsWhile upfront payments for purchasing an app were the primary source of revenuefor iPad apps in 2010, research by the analytics company Distimo has identi ed anincreasing trend towards revenue generation via in-app purchases. They found thatin December 2010: In-app purchases on free apps accounted for 15 percent of total app revenue on the iPad. This gure was up from 7 percent in June 2010. In-app purchases on paid apps accounted for 14 percent of total app revenue. This gure was up from 5 percent in June 2010.Distimo observed that developers were making a shift to free applications within-app purchasing as it allowed them to create revenue whilst harnessing the highdownload rate of free applications.This shift of both consumers and developers alike represents disappointing newsfor the Android Market, where in-app purchasing remains unsupported. It may gosome way to explaining why Google’s Group Manager for the Android platform EricChu, recently told a conference he was “not happy” with app generated revenue onthe platform. 7
  9. 9. Revenue Share By Monetization Type (US) 100% 100% 88% 71% 64% 51% 75% 75% 50% 50% 15% 5% 34% 14% 25% 25% 15% 7% 5% 7% 0% 0% June 2010 Dec 2010 June 2010 Dec 2010 Revenue Share Paid Applications Revenue Share Paid Applications Within App Purchases Revenue Share Free Applications Within App Purchases Source: DistimoWith Apple’s in-app purchase system, many newspaper and magazine appslet iPad users buy individual editions or subscriptions from within the app.Articles published by the Wall Street Journal and Forbes in February 2011,reported that Apple are now enforcing the rule which states all in-apppurchases need to be made via the Apple payment system- a move whichcould be detrimental to many publishers and developers who avoided doingthis in the iPad’s first quarter. 8
  10. 10. 3 Advertising on the iPad is more e ective than print “Advertising in digital magazines can more e ectively engage readers and create stronger purchase intention than similar static ads in print.” “ Dave Dickson, Product Marketing Manager, “ AdobeResearch carried out examining the e ect of iPad advertising in 2010 has largelyfound that ads viewed on the iPad are more e ective than both print advertising andadvertising on other digital platforms.In a study carried out by Alex Wang, Ph.D. of the University of Connecticut,consumers were asked to gauge their reactions to di erent types of advertising. Thestudy found that the interactive ads on the iPad were consistently better receivedthan static print advertising. The test subjects were required to assign a rating (with 9being the strongest), to a variety of di erent criteria. The results of this study can beseen below. 9
  11. 11. The ndings of this study are supported by research carried out by The NeilsenCompany, which found that iPad users were far more receptive to advertising thanusers of other devices and that users were more likely to make a purchase as a resultof an advert on the iPad compared to any other device. iPad users are far more receptive to advertising Receptivity to Advertising 49% I am more likely to look at ads if they have 40% an interesting video 39% 46% I enjoy ads that have interactive features 26% 27% 40% I am more likely to click on ads that are 25% simple text ads 25% 39% Ads on my connected device are new 20% and interesting 19% Apple iPad I like to see what ads can do on a 37% Apple iPhone 23% connected device All Connected 19% Device Owners iPad owners are more likely to make a purchase after viewing an ad Response to Advertising 36% I made a purchase on the internet via PC 27% 24% I made a purchase at a store 10% I made a purchase over the telephone 12% 7% I made a purchase directly through my 8% connected device 5% I searched for more information 18% 18% I clicked on an ad to view the full 22% advertisement or product o ering 20% 10% Used or requested a coupon through an ad 13% Apple iPad Discussed a product or service that I saw 7% advertised , with a friend or family All Devices 9% Source: The Neilsen Company 10
  12. 12. 4 The iPad is increasingly being used for eCommerce “Many retailers report that already half of what they consider to be mobile tra c is coming through tablet devices.” “ “ Forrester ResearchA recent study by price comparison website Kelkoo has found that eCommerce salesnow represent more than 10 percent of total retail sales in the UK. It is no wondertherefore that retail businesses are making ever increasing e orts to maximisetheir online sales. In order to do this though, it is essential for retailers adapt to theevolving technological landscape, and cater for increasingly popular devices such asthe iPad.Using speci cally tailored apps, a number of companies have found that theiPad can be an exceptional tool for generating revenue from eCommerce.Its vivid, tactile approach to online shopping is one that retailers are nowbeginning to exploit. “The iPad is the rst mobile device where eCommerce really ourishes” “ “ Munjal Shah, Head of commerce sales, GoogleIn the past year eBay have reported that shoppers using an iPad spend on average50 percent more than PC users, with unique visitors to the site who make a purchasespending on average $85 per week. 11
  13. 13. “Our iPad app is actually easier to use than our Web site.” “ Han Yuan, Director of engineering, “ platform business solutions and mobile at eBay inc.As well as eBay, a number of retailers are hugely bene ting from the shoppingexperience o ered on the device. achieved over 8000 unique downloadsof their iPad app in the rst two months it was available. While Wet Seal, a retailer ofteenage girls apparel, has stated that whilst promoting back-to-school clothing, theyhad close to 1 million out t views via the iPad app alone.Forrester has examined the mobile tra c driven to its own retail site. It found that45.5 percent of tra c driven from mobile devices was from the iPad. Typical Mobile Tra c Report from Forrester Retail Site iPad iPhone iPod touch Droid Blackberry Tour Blackberry Onyx Samsung Moment Other Mobile Source: Forrester 12
  14. 14. 5 iPad is becoming one of the most popular eBook reading devicesWhile 2010 will undoubtedly be remembered for the unprecedented success of theiPad, it will also be considered the year eBooks (digital books) achieved success ona major scale. Global sales of the eBook rose by approximately 400 percent andachieved nearly $1 billion sales in the process. “Publishers need to take digital seriously, they must make it the new default for publishing, preparing for a day in which physical book publishing is an adjunct activity that supports the digital publishing business” “ “ James McQuivey, Forrester ResearchIn a year in which Amazon announced eBooks outsold paperbacks on its website inthe nal quarter of sales, ChangeWave Research indicates that the iPad successfullyclaimed much of the eReader market from its more established competitors. Current eBook Reader Ownership Nov 2010 Amazon Kindle Which eBook Reader do you currently own? Apple iPad 80% 68% 62% 60% 47% 40% 20% 32% 16% 0% Feb Aug Nov ‘10 ‘10 ‘10 Source: ChangeWave Research 13
  15. 15. The growth of the iPad as an eBook reader appears set to continue into the decade.An online survey conducted by The Bookseller in October and November 2010forecast that eBooks would eventually be read primarily on tablet devices. Nearlyone third (31.8%) of respondents forecast that the iPad or devices like it would be themost commonly used eReader platforms by 2015.A survey by ChangeWave Research of 2,800 consumers suggests that thesepredictions are well founded, and if anything, conservative in their forecasts, giventhe projected adoption rate of the iPad as an eReader. Future e-Reader Buyers - Next 90 Days Nov 2010 Which of the following eBook Readers will you most likely buy? 50% 68% 40% 33% 30% 18% 20% 10% 4% 1% 2% 0% iPad Kindle Nook Sony Reader A Smart Phone Other/Don’t (Apple) (Amazon) (Barnes & (Sony) with eBook Know/NA Noble) Capability Source: ChangeWave Research 14
  16. 16. 6 Consumers more likely to read magazines & newspapers on iPad than other devicesSince its introduction in April 2010, the iPad has established itself as the device ofchoice for reading eMagazines and Newspapers in particular.ChangeWave research found that iPad users are over three times more likely to readmagazine and newspaper content than owners of all other eReader devices. % of e-Reader Owners Who Say They Read Newspapers/Magazines on Their Devices Apple iPad e-Reader May 2010 Owners Apple iPad Owners vs. All Other e-Reader Owners All Other e-Reader 60% Owners 50% 50% 40% 38% 30% 20% 14% 11% 10% 0% Newspapers Magazines Source: ChangeWave ResearchThe iPads dominance as a device used to read magazine and newspaper content iseven more impressive when compared to its main eReader market contender, theKindle. In a further study, ChangeWave Research found: 51 percent of iPad owners read newspapers on the device, while only 11 percent do on the Kindle. 36 percent of iPad owners read eMagazines on the device, while only 8 percent of Kindle owners do. 15
  17. 17. ConclusionWhen examining the performance of the iPad in 2010, it is hard to concludethat it has been anything other than an unmitigated success. It has surpassedall sales expectations, driven record pro ts for Apple, and appears set to growat an unprecedented rate in 2011. It is also helping to generate revenue forpublishers, advertisers and retailers, in addition to being the consumer’s choiceof devices.However, arguably the greatest impact of the iPad, is the shift it has engenderedin the technology industry as a whole. One must only look so far as the 100 ormore tablet devices debuted at the 2011 CES gadget show to appreciate thetransformative e ect the iPad has had on Apple’s competitors, hoping to take a sliceof the Apple pie.For the iPad, the main issue of 2011 will therefore be in maintaining its marketlead, whilst making further in-roads in certain areas of the market. Publishing andeCommerce look set to be industries in which the iPad will ourish in 2011, withconsumers and developers alike favouring the iPad above all other devices.A number of commentators have shrewdly forecast 2011 as “the year of thetablet”, however with rumours abounding about a possibly imminent iPad 2 release,and speculation regarding the innovative features it may provide, all trends aresuggesting that 2011 may well in fact, be the year of the iPad 2. “Something massive has happened…it’s called the iPad.” “ Stephanie Baghdassarian, “ Gartner Research 16
  18. 18. Request more info about YUDU’s iPad solution YUDU Media email: ipad@yudu.comUK Tel: (+44) 870 760 9258 US Tel: 1-888-FOR-YUDU (367-9838)