How Apple is Positioning the iPad to Slaughter the Competition

The iPad is without a doubt a home run for Apple – they are selling millions and sales are growing at a faster rate than iPhone sales grew. You can debate forever whether Android tablets will kill the iPad, we truly won’t know that until there are some viable iPad competitors on the market. One thing that seems to be happening though is that Apple is showing that they understand that they too don’t know what the future of tablet sales holds.

By the end of this month you will be able to buy iPads at: Apple Retail Stores, Apple.com, Apple Authorized Retailers Online, Best Buy, Walmart, Amazon.com, Target, AT&T Stores and Verizon Stores. That is massive market saturation for a device that is as widely talked about as the iPad. All of this means one thing: Apple is putting the iPad in front of as many buyers as they possibly can.

This is a smart strategy. A very smart strategy. If you walk into a Verizon store today you will see assorted net books that feature built in 3G wireless for sale, which is pretty neat. These net books are also subsidized so right now a quick check of Verizon’s website shows that you can get a net book for free with a 2yr contract or spend up to $199 (with another 2 year contract) on the six net book models that they have listed.

So let’s say you are Joe Not-Tech-Savvy and you walk in to a Verizon store and you want to get internet for your computer while you are traveling. You see the MiFi and the USB 3G modems, then you see this tiny cute computer that you can get for free so long as you promise to pay Verizon $40 a month for the next 24 months. Done deal. An iPad won’t even be considered as an option in your mind, you didn’t see it on the shelf and that is all that matters.

Now then take the same scenario and you see an iPad next to everything, in a prominent display (as Apple usually demands) and you see that for a two year contract you can get the iPad with a free MiFi and 3G internet for the same price as normal. Additionally you are told that you can use that MiFi with any and all of your computers for internet. Oh and let’s not forget that this would make your kids respect you more, and it is way cooler to have than that ‘cute’ little Samsung net book that is free.

Most people probably still won’t choose to spend the $500+ to get the iPad, but the select few that do choose the iPad would not have made that decision if the iPad wasn’t there for them to buy. So putting the iPad in more places like Walmart, Verizon, AT&T and Target doesn’t mean that the iPad will persuade everyone, but it does mean that people will have to decide between that and the iPad competitors. That is a dangerous place for iPad competitors to be.

Even if Apple convinces 10% of people to buy an iPad instead of that cheaper net book or soon Android tablet, then this model will be a huge success. Just look at how many iPads have been sold without all this retail presence – until now people have had to go out and actively seek to get an iPad. Come November the iPad will just be every where for you, just like Apple did with the iPod.

[Updated: 10/14/10 at 1:21 PM]

Horace Dediu of Asymco chimes in:

What seems to be happening is that Apple is pulling out all the stops and going for unrestricted iPad distribution. This may also foreshadow unrestricted iPhone distribution next year. It may also portend a CDMA iPad (or at least an LTE version) next year.

If it happens all estimates for next year need to be revised sharply. I had been expecting 100% growth for the iPad and 50% growth for the iPhone. These might need to be increased to 150% and 100%.

The consequence could be that total iOS devices sold could top 150 million for calendar 2011.

Originally posted for members on: October 14, 2010
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