I Have No Idea How the iPad Will Do!

With all the feverish discussion and prognostication about Apple’s preview of the iPad, I want to be the first person online to make this prediction:

I have absolutely no idea how the iPad will perform.

I’ll go one step further – neither does anyone else. The benefit of making predictions right now is that if you happen to end up being right, you can link back to your post in a few years. If you’re wrong, well, who reads blog posts that are a few years old?

One line of argument that I find really interesting, though, is being taken by people who are arguing that the iPad will revolutionise… something. The argument is by analogy – and what a lot of people are saying in response to critics of the iPad is that people hated the iPod and the iPhone when they were released as well. In particular, the initial response to the iPod introduction was pretty universally tepid.

Garry Tan from Posterous has collected a few of these, and this one pretty well sums them up:

I still can’t believe this! All this hype for something so ridiculous! Who cares about an MP3 player? I want something new! I want them to think differently! Why oh why would they do this?! It’s so wrong! It’s so stupid!

Haha! It wasn’t Apple that was stupid – they were stupid! Right?

Well, maybe. It’s easy now to look at the iPod’s 70%+ market share and wonder how anyone could have missed that it was a game-changing innovation. I’ll tell you how. The fact of the matter is that all the people that were skeptical about the iPod as a product innovation when it was introduced were actually completely correct. There wasn’t much there. Take a look at the iPod sales figures from wikipedia:

The first iPod was introduced at the end of 2001, and you can see that sales figures for the first three years were not good at all. By the middle of 2004, the iPod’s market share had been sitting in the 20-30% range for a while. By the end of 2005, that had shot up to over 70%. What happened?

iTunes happened.

Because the iPod and iTunes are so closely interconnected now, it is easy to forget that iTunes didn’t exist for the first years of the iPod. At the time, the iPod was just another mp3 player. The innovation with the iPod was not in the product – it was the innovation in the product’s value network. It was a similar story with the iPhone. And that is why nearly everyone that is yapping about iPad right now is completely missing the point. Because we don’t know what it’s value network is going to look like yet, and this is what will actually determine whether the iPad will take off quickly like the iPhone did, or slowly like the iPod.

Even when you make great products like Apple, your innovations never stand alone. They work within the context of their economic network. The better you understand this, and the more innovative you are in constructing your value networks, the more successful you’re likely to be.

So the next time someone talks to about all the great new features something has, ignore them. Instead, think about the business model and the value network that will support the great new thing.

Student and teacher of innovation - University of Queensland Business School - links to academic papers, twitter, and so on can be found here.

Please note: I reserve the right to delete comments that are offensive or off-topic.

11 thoughts on “I Have No Idea How the iPad Will Do!

  1. I think you’re right that the business model and value network are critical to success.

    But I think usability is also critical; a big part of the iPod’s success was the clickwheel UI. And I think iTunes biggest advantage is that it’s easier to use than the alternatives.

    I predict the iPad will be a hit if it’s easier to surf the web, send email and buy&read books and movies than a laptop/netbook.

  2. I agree Gavin – and I think your last point is correct. The usability issues are really the only ones that we’re in a position to evaluate right now. It’s the value network that will determine the ease of buying & reading books, for example. And several of the reports that I’ve read from people that have seen early demo versions is that it is harder to read on the iPad than on your Kindle – so I’ll be interested to see how that plays out.

    Personally, the problem that I’ve got is that input on this doesn’t appear to be any faster than on an iPhone. Since that’s my main problem with the phone as a computer, this doesn’t address that. But then, I’m just one guy & I’m not sure how widespread that sentiment will be…

  3. What’s the point of me writing a 500 word post if you can just say it in 14 words Matt? :-) I think you’re right though – and the thing that we don’t really know yet is how iBook will work. For me, that’s the critical question.

  4. One of the better iPad discussions. I agree, we don’t know if it will take off or not. The user experience will be key, but for doing what?

    I was hoping for a really sexy device that could replace the heavy laptop (and the netbook I’ve so far avoided buying) and Kindle on my daily commute by train and frequent business trips. Without ever having touched the actual device I’m skeptical on both counts. The screen technology is not optimized for reading, particularly in sunny locations (i.e., my favorite chair at home, window seats on the train, coffee shops, airport lobbies, …). And the lack of a real keyboard leaves us with the same, not very good, input options of the iPhone.

  5. Thanks for stopping by and making a comment Jamie. I have the same issues as you with the iPad, but I’m cautious about extrapolating out my own thoughts into an assessment of what the overall market will do – I already know that I’m an outlier in a lot of ways!

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