Marketwise: 4 Reasons the iPad May Be More Like the iPod than the iPhone

What Apple has experienced with the iPhone and the iPod are two different inputs with two very different outputs. In fact, one would have hoped that given the tremendous innovation within the iPhone (more so, one could argue, than the iPod) that Apple would have continued market dominance. Instead, as one copycat after another came along (in particular Android, with $0 or 2 for 1 phones), the very opposite is happening. While Apple dominates Google in terms of revenue-share its market share is slipping everyday.

The iPod has had a very different market appearance. Unlike the iPhone there were similar products on the market with the iPod launched. In fact there were a plethora of mp3 players with a plethora of features, often more than the iPod. The iPod came along, and with the power of iTunes and excellent product design took over that market. And, to this day the iPod maintains the majority market share, by far, of portable digital players.

The question that I'm interested in exploring, along with you, is what this all means for the iPad. In many ways the iPad shares the characteristics of the iPod. There have been tablets for years (albeit not touch tablets). Indeed Apple was a leader in this space with the Newton, Palm had a number of great products in this area, and Windows strived to make the Windows tablet 7 a market success. But the iPad also shares some similarities with the iPhone. While there were pc tablets and portable PDAs prior to the iPad there was nothing that really was in the category of the iPad. With its full-screen form factor that eschews the keyboard and stylus the iPad was and is something new.

As the Xoom looms large (actually, not really, it isn't selling well but eventually the competition will catch up, at least in providing a derivative product) it appears we are at an inflexion point. Will the iPad hold 75 percent of market share, or become more like the iPhone, dominant, but not the only player.

Here are a few reasons why the iPad is different from the iPhone:

1)   No carriers

There is a great chart by Business Insider (I love their charts, make sure to subscribe) that shows the difference in market share between ATT and Verizon. Note that the Android is only 4 percent of market share for ATT while it is the leader for Verizon. Why? While some may have chosen (typically those with a bias against anything made by Apple) the Android out of choice a lot of people wanted an iPhone-like phone on Verizon. Verizon took advantage of this, being locked out of the iPhone they pulled out all the stops with their Droid brand. The result is that Android was the benefactor of, ironically enough, lack of consumer choice in carrier.

That dynamic is non-existent with the iPad as of today. The carrier aspect of the iPad product experience is much diminished, involving only data and not voice. And you can now buy a Verizon or ATT iPad.

2. Cost

After writing about Apple all these years I think this is the first time in a long time Apple has had the price advantage. In the past, defenders of Apple products have always said that the higher cost is due to higher quality of materials and the user experience. It just so happens that at this point in time, with the iPad, we have the best of both worlds. The best product at the best price.

However, with every and any manufacturer around the globe able to use the Android OS for free I wouldn't expect this advantage to last for long, though. There will soon be a plethora of cheap, derivative Android tablets at every price point and size on the market. But, I surmise these will end up looking, feeling, and selling like all those other mp3 players.

3. It's bigger

The challenges of designing a good touch tablet operating system for the phone are many. To this day the Google Android experience is not, to the sophisticated finger, as responsive as the iPhone experience. Swipes take longer to be recognized, scrolling isn't as smooth, and pinching and zooming are more awkward. Usable, for sure, but not as polished (one can, of course, argue about how useful or meaningful this is. I say it is, but I care about a quality user experience). These challenges are exponentially larger on a Tablet requiring more code and design sophistication. Something Apple has that other's do not, currently.

This is true not only for the operating system but also for the application developers. Developing tablet applications, at least good ones, takes more time, more effort, and requires a more sophisticated UI engine. Apple's current App count advantage is exponential, and will take longer for Android and others to dismantle (indeed, those with a closed product set like HP and RIM may have more luck).

4. A blank slate

The iPhone itself, the first multitouch phone with a usable web browser was the first "smartphone" but not the first cell phone. It came into an incredibly crowded market, rocketing to fame, but even that rocket can only go so high. The majority of phones sold, after all, until a few months ago were feature phones, not smartphones.

The iPad comes into a completely new market. It created a new market; without the iPad there would be no Xoom, no PlayPad, no TouchPad, etc. This blank slate has allowed Apple to define the product set on its own terms, and deliver. In many ways iPad is on the verge of becoming a generic word, like Kleenex or Xerox, so dominant is its market share.

It is too soon to tell whether defining a market is an advantage to Apple, I bet it is. 

What do you think, will the iPad end up like the iPod or iPhone when it comes to marketshare?