And I stole the Facebook status message from one of my friends’ for the title of this post as the Apple CEO, Steve Jobs anticipated it right - “2011: Year of the copycats?” while unveiling the ‘iPad 2’.
Last year, Apple launched iPad and had a tremendous success with 300K units sold in the very first week and around 15 million units so far. Many were amazed because of the scale with which it penetrated the market – it was much beyond the number, the analysts had predicted for the total size of the tablet market.
Often new products and innovation create new market, so did iPad do so last year? I think otherwise – they just spotted the trend and exploited the untapped market. And they did it much like the way they did it for iPod and iTunes spotting rising demand of digital music and success of illegal music share site Napster. There were MP3 players before iPod and netbooks before iPad. And also we had laptops and smart phones. ‘So is there a room for third category of device…?’ asked Mr Jobs during unveiling of iPad for the first time last year.
And the picture in the right is straight from Steve Jobs’s presentation last year. The opportunity was a heavy need for the things as identified by him as ‘key tasks’. One of the reasons for creation of such need as I think is the availability of Wi-Fi and 3G networks everywhere. So he came up with a device which was ‘far better at some things’ with some incredible battery life and coolness of any Apple product. The rest is history and iPad was a hit from day one. How about iPad2 then? The key tasks had been accomplished, so where is the room now? “2011 is going to be year of copycats…if we did nothing…” is how Jobs started his keynote speech two weeks back while introducing iPad2. Indeed there is a series of tablets lined up to be released this year. And the technology research firm Gartner is forecasting sales of 55 million tablet computers worldwide this year. So Apple is again ready with a better product than iPad – a complete redesigned with double the speed, lighter, thinner and with a cool smart cover. While the competitors are not yet able to catch up iPad, iPad2 is ready in the exactly same price range. "Competing tablets to the iPad are poised to fail, which is why we're forecasting that Apple will have at least 80 percent share of the US consumer tablet market in 2011" – the research firm Forrester’s forecast is easily understandable.
So I did not hesitate copying the status message of my ex-classmate (who is now a MBA student in a reputed US university) because he was rightly echoing the current consumer voice.
There is a very interesting economic law, albeit older than the classical economic theories, that states - "supply creates its own demand". This is a very simplified and derived version of Jean-Baptiste Say's concepts.
ReplyDeleteA couple of interesting observations - I found Say's law partly at work with iPad launch. There was a latent demand for tablets but tablets existed even before iPad was launched. Consumers probably had a subconscious demand for a device that was almost mid-way between 4inch smart-phones and 13 inch laptops. However, when iPad was launched, almost everyone, including me, groaned as to who needs a gigantic iPod Touch?
However, the iPad experience in an Apple store disarmed me. Not being an early adopter myself, I decided to wait and evaluate the exact utility of this huge iPod Touch aka iPad. But what struck me with the stunning sales figures was the fact that the availability (supply) of a suitable product actually enhanced (if not exactly create)demand. Say's law was at work.
This ties in well with the innovator's dilemma (book by Clayton M. Christensen). Sometimes consumers don't know what they want. Innovative companies come up with solutions to these underlying demands (Spotting Market Demand!!!).
This is what differentiates Apple from everybody else.
And now that the company has built that trust relationship with consumers...it is just about surfing the wave of success.
Point well made Sandeep... To add it I 'll Share one of my exp :
ReplyDeleteLast year, after iPad got released one my colleague told me, "I want to buy an iPad for my daughter". Out of curiosity I asked how old is she? He said something 4 or 5(I dont remember exactly). 'Then why you need one bcuz u already having a lappy for her', I asked again. He replied, "Well...u know for paint n all..u know it wud be good for her..blah..blah". And the next day he booked an iPad online.
"supply creates its own demand" :-)