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A Big Month For Apple:
iPad, iAd, & iPhone 4

Over the past two weeks, Apple has made three major announcements that may have a far reaching impact on the mobile world.

ipad-dog-230.jpg#1 – The launch of the iPad, the new tablet device that some think will revolutionize the way the world consumes media.

#2 – The announcement of iAd, Apple’s new built-in mobile advertising system for serving ads in iPhone & iPad apps.

#3 – A preview of iPhone 4, the new operating system for the iPhone.

Now that the dust has settled a bit, we look at these products to separate the hype from the reality and see what the longer term implications are for mobile, media, and marketing.


[note: this article looks at the iPad, next week we will look at the iAd and iPhone 4 announcements.]

The iPad – a great reception

The long-rumored Apple tablet device finally shipped on April 3 with an enormous amount of fanfare and expectation. First day sales were about 300,000 units, and in the following week another 150,000 were sold. At launch there were already about 3,000 special iPad apps available on the iTunes App store in addition to the 140,000+ iPhone apps. And, on the first day of shipment, customers downloaded over 1 million apps plus an additional 250,000 ebooks!

You can read a full review of the iPad HERE, but some of the key features include:ipad-ibook-nyt.jpg

  • 24 cm, full color touch-screen display
  • the software is the same as an iPhone, to it runs all iPhone apps
  • includes applications such as Safari for internet browsing, Calendar, Mail, plus iBook which is an ebook reader.

Certain publishers are looking at the iPad as the savior for print publishing. Print has overall seen a major decline in popularity, with many major newspapers going out of business. The Amazon Kindle started a major movement towards the popularity of electronic books, and the iPad may well bring that vision to reality.

Many major publishers have endorsed the iPad and have announced products for it, including Hachette Book Group, HarperCollins, Penguin, Simon & Schuster, and Macmillan, and some of the publications already available include Time Magazine, Wall Street Journal, USA Today, GQ, Popular Science, and The New York Times.

And as reported in The Australian, Rupert Murdoch recently commented that tablet computers like the iPad, “may well be the saving of the newspaper industry.”

Impact on mobile advertising

The next question is of course, what will be the impact of iPad on the overall mobile advertising market. Given that the iPad can run existing iPhone apps, we should expect initial iPad advertising to be primarily a continuation of existing iPhone advertising.

ipad-icons.gifHowever, further out, the iPad advertising should develop some individual characteristics of its own, both because of its specific technical capabilities, and also due to the fact that the iPad usage pattern will be quite different from iPhone usage (for example, it is not a form factor that someone would carry with them everywhere at all times like the iPhone).

Based on what we have seen over the past several years in the mobile marketing arena, there are three factors that will determine the attractiveness of iPad as media channel to the advertising world:

  • audience
  • engagement
  • commercial

Audience:
The audience factor consists of two parts – reach and demographics.

It seems hard to imagine that the iPad will ever develop huge numbers in terms of reach, and perhaps that is not Apple’s expectation. Whereas the iPhone is addressing a form-factor market that is already 5 billion strong and rapidly growing (the form factor being “fits in your pocket/purse and you keep it with you 24/7″), the iPad is actually attempting to create a new category. So compared to other media channels, we have to believe that the iPad audience numbers are likely to remain relatively small.

ipad-recipe.gifOn the other hand, the demographics of the “iPad owner” segment is likely to be very attractive: well educated, affluent, tech savvy.

So the audience that the iPad can bring is likely to be relatively small, but still very attractive to certain brands that want to reach this group.

Engagement:
One of the iPhone’s biggest strengths was the incredible level of consumer engagement it allowed. The great display plus the numerous possibilities for user interaction (touch, motion, location, voice, etc) unleashed a new level of creativity in mobile marketing.

And the iPad is likely to be even better in this regard. Given the bigger screen, the possibility for a keyboard, plus the new advances in the iPhone 4 OS, we may well see another burst of creativity as brands and agencies learn how best to build consumer interactivity and engagement with this new platform. In fact, due to the expected popularity of the iPad, we have already seen several mobile ad companies announcing special ad units for the iPad, including Greystripe, Millennial Media, and Smaato. These new ad units point towards the development of a very rich, interactive advertising media.

Commercial aspects:
Looking at the commercial aspects of mobile marketing on the iPad there are a couple of points that we have to consider.

ipad-ads.gifOne is the widely discussed “ease of buying” issue that has always been seen as an impediment to the adoption of mobile advertising. Brands and media agencies simply find it harder to plan and buy mobile because the systems and tools are not in place as they are with online and traditional media. (see What Do Media Planners Really Want From Mobile?)

Nothing in the recent announcements from Apple is targeted at addressing this issue, and in fact the iAd platform may in fact result in even further fragmentation of the ad planning and buying market.

The second commercial aspect is simply price. Normally in the open market prices self adjust based on supply, demand and the value that the ad represents. One thing we have to keep in mind in the iPad scenario is that Apple will be taking a 40% share of the ad revenue generated, which may drive up the cost of iPad advertising and limit its appeal.

Summary

Overall, it seems that the iPad is a really interesting device that may well have a long-term impact how people consume media. The growing popularity of devices such as the Kindle has proven the consumer appetite for this category, and the iPad may well be the product that gets most things right, delivers a great consumer experience, and becomes a big hit. In fact I’m quite sure I’ll buy one.

ipad-keyboard.gifFrom an advertising viewpoint however, it doesn’t seem likely that the iPad will have a major impact on the industry. More likely we will see an iPad audience develop which is very attractive to certain brands, and we’ll see some great iPad advertising and marketing programs targeting this group. But it will remain a niche segment of the overall mobile business.


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