The iPad Is Not a Computer

Apple has come a long way from its personal-computer origins

ipad stats
Illustration: Emily Cooper
SOURCE: APPLE (APPLE’S FISCAL YEAR ENDS 30 SEPTEMBER)
SOURCE: ABI RESEARCH
Click on image to enlarge.

Is the Apple iPad a computer or an entertainment device? If Apple’s recent history is a guide, it’s the latter. After all, Apple is no longer mainly a computer manufacturer.

Last year, computer sales accounted for less than a third of Apple’s total revenues, while more than half came from iPhones, iPods, and sales of music-related products and services.

Apple is better off as a phone and entertainment company anyway—that’s where it has room to grow. As Joe Wilcox of Betanews reported in February, Apple already has 90 percent of the retail market for premium PCs (defined as costing more than US $1000), according to NPD Group, a market research firm in Port Washington, N.Y. By contrast, Apple has only a tiny share of the phone market.

Michael Morgan, an analyst at ABI Research, in Oyster Bay, N.Y., says that of the 336.5 million phones he estimates were sold in the fourth quarter of 2009, only 8.7 million were iPhones. Even looking only at smartphones, Apple’s share was about 17 percent.

How far has Apple come from its computer origins? Consider its stores, at nearly 300 strong by the end of 2009. No other computer maker has a similar chain. Then again, neither does anyone else: By some measures Apple is the most successful retailer in the world. According to a story on Bloomberg.com last year, the company’s famous glass cube store on Fifth Avenue in New York City has twice the sales per square foot of diamond retailer Tiffany’s flagship just down the street. Of course, the cube is open 24 hours a day, so you can buy an iPod—and now an iPad—well before breakfast.

This article originally appeared in print as "iPods and iPads: Better Than Diamonds."

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