Putting some numbers into the iPad opportunity for professional users

Lets sample some numbers from SixColors and Statista (twice)

On the state of the Mac Platform:

• Mac revenue 2023: USD 29.3B per year
• Mac shipments: 21.9M per year
• Mac average selling price: USD 1,337.90
• Mac user base: 100M
• Mac renewal rate: 4.57 years

On the iPad:

• iPad revenue 2023: USD 28.3B per year
• iPad shipments: 48.7M per year
• iPad average selling price: USD 581.11
• iPad user base: 400M
• iPad renewal rate: 8.21 years

On the positive side

• Gained iPad users for a more complex platform: 10M
• Gained iPad purchases a year: 2.19M per year
• Gained iPad yearly revenue: USD 2.93B per year

On the drawbacks

• Lost iPad users because of a more complex platform: 20M
• Lost iPad purchases a year: 2.435M per year
• Lost iPad yearly revenue: USD 1.415B per year

Net revenue change for a more complex iPad platform

USD 1.515B per year

You've got to wonder whether it's worth the risk leaving the low end for ChromeOS or some other platform to take

From WHAT IS LOW-END DISRUPTION? 2 EXAMPLES:

How do successful businesses get pushed out of markets they once dominated? The theory of disruptive innovation—coined by Harvard Business School Professor Clayton Christensen—explains how smaller businesses can disrupt incumbents by entering at the bottom of a market with a low-cost business model.

...

**Low-end disruption** occurs when a company uses a low-cost business model to enter at the bottom of an existing market and claim a segment. As the entrant company claims the lowest market segment, the incumbent company typically retreats upmarket where profit margins are higher.

“Almost always, when low-end disruptions emerge, it creates a situation where the leaders in the industry actually are motivated to flee rather than fight you,” Christensen says in Disruptive Strategy. “That’s why low-end disruption is such an important tool to create new growth businesses: The competitors don’t want to compete against you; they just walk away.”

For the folowing section I enlisted (or should I say coaxed) the assistance of Gemini Advanced. You can read the full transcript here.

Given Apple's established position in the premium market, the risk of low-end disruption shifts from price-based competition to a potential erosion of its core value proposition: user-friendliness and simplicity.

Two ways Apple could increase this risk of low-end disruption in the iPad market are:

1. Overcomplicating the User Interface (UI): By catering to power users' demands for advanced features, Apple might introduce complexity that overwhelms less tech-savvy users. This could drive them towards simpler alternatives, even if those alternatives lack the iPad's processing power or ecosystem benefits.

2. Neglecting Core Apps and Functionality: Focusing on professional-grade tools could lead to a neglect of basic apps like email, web browsing, or media consumption. If these core functionalities become cumbersome or less intuitive, it could alienate mainstream users who value the iPad's simplicity.

Overserving opens businesses to low-end disruption

Overserving, in the context of the low-end market for iPads, would make Apple exceed the needs and expectations of its mainstream users by incorporating features and functionalities that are primarily designed for professional or power users. Potentially generating an impact in the following ways:

• Feature Overload: Apple could introduce a plethora of advanced features in an attempt to attract professional users. However, this could overwhelm casual users who primarily use their iPads for basic tasks like browsing the web, checking emails, and consuming media. These users might find the interface too complex and the device less intuitive to use.
• Increased Complexity: Adding advanced features often leads to increased complexity in the operating system and user interface. This could make the iPad less user-friendly for casual users who are not familiar with the intricacies of professional tools and workflows.
• Higher Price Points: Incorporating advanced features and powerful hardware usually results in higher production costs, which translates to higher price points for consumers. Casual users who are primarily looking for an affordable device for basic tasks might be discouraged by the increased price.
• Reduced Battery Life: Powerful features and high-performance hardware often consume more power, leading to reduced battery life. This can be inconvenient for casual users who primarily use their iPads for entertainment and don't want to constantly worry about recharging.

Consequences of Overserving:

• Loss of Market Share: If casual users feel that the iPad is becoming too complex and expensive, they might switch to simpler and more affordable alternatives from competitors. This could lead to a significant loss of market share for Apple in the low-end segment.
• Negative Brand Perception: Overserving could lead to a negative brand perception among casual users, who might start to associate Apple with expensive and overly complex products that are not suitable for their needs.

By avoiding overserving, Apple can maintain its position in the market and cater to the needs of both mainstream and professional users without compromising the simplicity and user-friendliness that have made the iPad so popular.