Apple Results: the iPad and the Halo Effect

Another set of bumper figures. Since I’ve been following Apple, it’s clear there is a consistent pattern. Apple produce estimates that they are absolutely sure they can beat. The result is that the markets pretend to be surprised every time the estimates are convincingly exceeded. Nothing, though, can detract from these particularly splendid results.

But it’s what’s behind the figures that interests me – in particular the unprecedented growth of the iPad in an as-yet uncontested market. In the last quarter iPad revenue overtook the company’s portable computer business and I wouldn’t be surprised to find it beating the entire Mac business before the end of the next quarter.

Tim Cook, who is heading Apple during Steve Jobs’ medical leave, spent some time last night discussing the iPad’s cannibalisation of the portable Mac market as well as the "halo effect" created by the tablet. While he isn’t sure that there was cannibalisation (buyers choosing an iPad instead of a MacBook) he believes there must have been some movement. I think the effect on the MacBook range has been minimal; the main losers here have been netbooks and the lower end of the PC laptop market. For most people, a netbook was a convenient way of browsing and emailing – both tasks which the iPad performs better and with considerably more elan.

If anything, the cannibalisation of MacBooks has been more than offset by the halo effect. I’ve introduced the iPad to a number of friends who have always owned PCs. After a few days with the iPad their thoughts start turning to Apple. It’s not long before they’ve dropped by the nearest Apple store to look at iPads and other stuff. I can imagine that this is happening everywhere and many iPad owners will be putting Apple at the top of their shopping lists when they need a new computer.

The MacBook range has been revitalised by the new Airs, especially the diminutive 11-in model that attracts all the oos and ahs. I think the two Air models will give a tremendous boost to MacBook sales during 2011. And, of course, we mustn’t forget the importance of the two app-store eco-systems. It can be argued that much of the success of the iPhone has been based on the innovative AppStore concept that the rest of the industry is only now scrambling to copy. The new Mac App Store will be equally significant for the future of OS X devices. We ain’t seen nothin’ yet.

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