iPad sales to hit 7 million in 2010 and triple by 2012

EL SEGUNDO, USA: The iPad’s attractive design, compelling applications and multi-touch capability, key components of Apple Inc.’s past successes, will help to offset the initial omission of Adobe Flash from the device and send demand soaring in 2010 and beyond, according to a preliminary forecast from iSuppli Corp.

Worldwide iPad sales are expected to amount to 7.1 million units in 2010. Sales will double to 14.4 million in 2011 and nearly triple to 20.1 million in 2012.

The figure presents iSuppli’s preliminary forecast of worldwide iPad unit sales.Source: iSuppli, USA

Sales in 2010 will be driven by early adopters and others attracted to the iPad’s unique touch-screen-based user interface. In 2011 and 2012, iPad sales will be driven up by a range of factors, including a flood of new applications, improved functionality and declining prices.

iSuppli regards its iPad sales forecast as conservative. Factors that could boost sales beyond iSuppli’s preliminary expectations include swift feature enhancements and the early addition of Flash support.

The right touch
“Touch is the new standard for user interfaces, providing a naturally intuitive way of operating an electronic device, whether you are two or 92,” said Rhoda Alexander, director of monitor research for iSuppli.

“The tablet form factor is ideally suited to touch. The iPad represents an intriguing mix of two devices that have struggled to gain traction for years: Internet appliances and tablet PCs. In a sharp departure from past tablet implementations, it appears that Apple has both minimized and maximized the capabilities of the devices, limiting it as a creation device but compensating for this shortcoming by offering a wealth of easily consumable applications. The device’s initial limitations are likely to be overlooked if Apple provides enough content to keep users engaged within the product limitations.”

Apple will not have the field to itself for long, however, as competitors around the globe are poised to introduce their own tablet PCs, many of which will have more robust capability than the early iPads.

Nonetheless, being first out of the gate with a low-cost tablet alternative gives Apple a distinct advantage, Alexander said. “2010 sales could potentially climb much higher than the 7 million figure, and that first year success—combined with expected ongoing innovation—will help to keep Apple at the forefront of the tablet market for several years. Key to continuing success will be how quickly Apple responds to issues as they arise and whether the company can align suppliers to meet demand needs.”

No flash in the pad
Chief in realizing this upside potential is Apple’s ability to address the lack of Flash support in the iPad. Some have called the long-term viability of the iPad into question because of its nonsupport of Adobe Flash—the multimedia platform from Adobe Systems Inc.

“Until Apple addresses this issue one way or another, its decision not to support Flash — communicated earlier on by Apple CEO Steve Jobs — will have a limiting effect on the iPad’s sales potential,” said Francis Sideco, principal analyst, wireless communications.

“This is because one of the key use cases of the device, as marketed by Apple, relates to web browsing or consumption of online content. Absent Flash, iPad users will not be able to enjoy Flash-driven content, which is used in a considerable amount of websites as well as web-based games and videos.”

Weighing risks: Apple’s huge gamble
Apple’s decision has divided vociferous fans and incredulous unbelievers alike into mutually opposing camps—a battleground between those who believe Apple can do no wrong and those that opine the Cupertino, Calif.-based behemoth has finally overplayed its hand.

Given the tablet’s nonsupport of Flash, consumers could end up being disappointed if what they expect to be a great browsing experience from “a magical and revolutionary product” — which is how Apple describes the iPad on its website — turns out to be less than extraordinary.

Apple’s strategy with the iPad is largely centered on paid content. The company has partnered with major providers, which will sell their content on Apple’s App Store for a fee.

With so much Flash content available for free, Apple may be excluding support for the software in order to encourage users to pay for any content they use on the platform.
Hosting tens of thousands of applications—with a current average price of $3.13 per application—and boasting more than 1 billion downloads since its launch in 2008, the App store is a phenomenal cash cow for Apple, analysts across the board agree.

Despite dire prognostications from some critics about the iPad eventually failing because Flash is missing, Apple has a track record of defying great odds and successfully navigating previously uncharted waters, such as it did with the iPhone.

With initial orders falling in line with expectations, Apple is likely to stick with its strategy of not using Flash unless there is a notable impact on sales.

Source: iSuppli, USA