Don't let one bad Apple …
…spoil the whole bunch (and your future). The Apple Tax, while totally unjustified, isn’t worth losing sleep over. In the big picture, it’s really no big deal.
Although the iPad led tablet sales in 2010 (easy when you’re the only game in town), Apple’s position at the top doesn’t mean very much (it’s an early adopter market), and it won’t last long.
Research firm IHS iSuppli estimates that by 2013, the iPad’s market share will decline to less than 50% of the overall market. And although I’m not an industry analyst, frankly I think that share will decline a lot faster than that. Here’s why…
For 10 years, Apple dominated the portable mp3 player market because it had no challengers. And yes, the iPhone had a lead time of 3 years without any real competition in smartphones, but when Android phones hit the shelves, the iPhone was displaced from the top in 6 months.
Less than a year ago, the “extraordinary” iPad was launched and already it is facing serious competition from exciting new Android, WebOS, BlackBerry and Win7 devices hitting the shelves. These devices are open, have more functionality (USB, memory cards, Flash, …) and will be cheaper than the iPad. The iPad will be “just another expensive iOS device” in the not-too-distant future.
Okay, so let’s look at today…
15 million iPads were sold in 2010 – no doubt a great market for Angry Birds and other apps of general global appeal. But most newspapers have a local audience. And locally, most of their readers aren’t carrying around an iPad.
(Sidebar: if publishers think they have a product that can compete in a global market, they should launch a start-up for it and not jeopardize their core business).
Bear with me while I walk you through my logic on why iPads aren’t worth worrying about…
Pew Research’s State of the News Media 2010 reports that 71% of internet users, or 53% of all American adults, get news online today. Only 35% of online news consumers have a favorite site (i.e. they are avid readers). And according to PEW, one in five avid readers (20%) would be willing to pay for their news online.
So let’s assume that 2/3 of the 15M iPads were sold in the USA. That means across the total population of the USA, about 3.23% own an iPad. From PEW Research, we know that 31% of the population reads news online, 35% of those are avid readers, and 20% of avid readers are willing to pay to read the news. So that’s the audience we’re really interested in, right?
If I just look at daily newspapers in the States and not even consider the 5K+ weekly papers, you can see that on average a newspaper has maybe 100 or so subscribers who are willing to pay for their daily newspaper on an iPad.
Now I have every confidence that tablets will be a major platform for newspapers and NewspaperDirect is committed to offering more support on those devices than anyone else. In fact, ND is already working with a number of manufacturers on their new tablets. And while I cannot disclose the details (I’d have to shoot you), I can say “Be prepared to be pleasantly surprised”. Many of these competitive products are significantly better than the 1st gen iPads and, from what I’ve heard, the 2nd gen too.
So instead of panicking over the 30% tax, let’s just “bite back” and focus on that multi-platform strategy we discussed before. Sure, Apple is known for great innovation and creating a outstanding user experience, but it’s running out steam quickly with the iPad.
Stay tuned next week for more on the next generation of devices and technology that will make you feel even more confident about the future of your newspaper.