iPad Takes iPod's Halo, Driving Mac Sales

By Michelle Maisto  |  Posted 2012-04-26

iPad Takes iPod's Halo, Driving Mac Sales

Apple would seem to be petitioning for sainthood, given how many of its products have halos. The latest of these is the iPad, NPD Group reported April 26.

Traditionally, it was the Apple iPod that created a €œhalo effect,€ familiarizing and endearing users to the brand and the platform to the point of encouraging them to consider purchasing other Apple products€”following the launch of the iPod, Mac sales soared.

Macworld recently dug up these stats: Apple shipped 746,000 Macs during its 2002 fiscal first quarter, when the iPod began shipping. By the fiscal first quarter of 2009, with iPod sales at their peak, Mac shipments had risen to 2.5 million units.

The decline of the iPod coincided with the rise of the iPhone, however, and soon it was the halo-wearing iPhone driving Mac sales.

Now, NPD found, more than 25 percent of consumers say their first Apple product was an iPad. The firm€™s Apple Ecosystem Study additionally found 33 percent of U.S. households€”or 37 million€”own Apple products.

By comparison, iPods were owned by 69 percent of those surveyed, but they arrived in those homes at a more gradual pace than iPads did. 

€œiPad sales are growing much faster than any other Apple product has this soon after launch,€ Ben Arnold, NPD director of industry analysis, wrote in the report.  €œIn fact, one-in-five Apple owner households has one€”nearly equivalent to the number that own an Apple computer. This demonstrates the appeal of both the new form factor and Apple€™s app ecosystem.€

Newcomers to the Brand Turn Increasingly to the iPhone or iPad

While iPods were the first Apple products owned by 70 percent of long-standing Apple owners, among users new to Apple during the last two years, that figure has fallen to 57 percent, NPD found.

€œNewcomers to the brand increasingly turn to the iPhone or iPad as their first Apple device, which combined, account for one-third of first-time Apple purchases since 2010,€ states the report.

Apple CEO Tim Cook, speaking at a Goldman Sachs event Feb. 14, went into detail about how the halo effect created by the iPod, which occurred in developed markets like the United States, Western Europe and Japan, differed from the later one created by iPhone, which reached into every corner of the world, helping to sell not only Macs but iPads.

Cook explained, according to a transcript of the event created by Macworld:

The world changed for us, in many ways, when the iPhone was launched, because €¦ it introduced our brand to people who had never met Apple before.

Take China, as an example, because I€™ve talked about that. Last year the Macintosh in China grew over 100 percent year-over-year. Not on a big base, but 100 percent is pretty good. The market grew 10 percent, so it outgrew the market 10 [times]. What is clearly happening now is that the iPhone is creating a halo for the Macintosh. The iPhone has also created a halo for iPad. So you can definitely see the synergistic effect of these products, now not only in the developed markets, but in those emerging markets where Apple wasn€™t really resident to any degree for most of its life.

Just to give you some numbers to put it in context €¦ in 2007, the revenue combined from greater China, several other parts of Asia, India, Latin America, Eastern Europe, Middle East, Africa was $1.4 billion. The revenue last year for that same group of countries was $22 billion. And we€™re only on the surface.

NPD added that because the operating systems of Apple devices are so specially tailored to the hardware, the platforms become an important part of sharing content between the devices, increasing the likelihood that Apple users will buy more Apple products€”or, less of everything else.

Arnold notes that 40 percent of electronics shoppers say that owning devices of the same brand is an important factor to them when shopping.

€œAs consumers look for greater interoperability between devices and more brands become aligned with platforms,€ he wrote, €œwe could see fewer multi-brand ecosystems in the household.€


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