Apple understands desire. The first thing consumers will notice about the iPad 2 is how it feels: Lighter (by a crucial 2 ounces) and thinner (at 8.8mm, thinner than an iPhone 4). Color triggers emotion: iPad 2 comes in not just black but white, with multiple colors in the thin "smart covers" that snap into place with "auto-aligning magnets" and clean those unsightly fingerprints off your screen. The rest is important but more cerebral. Dual-core processor, HDMI video-out converter for the 30-pin connector, etc. Emotion enters back into the equation when consumers see what they can do with the device–see their loved ones through FaceTime, touch-edit videos in iMovie, improvise on touch-instruments in GarageBand and actually sound good doing it.
In a post-PC world, consumers have a more intimate relationship with their devices. They use them on the couch and in bed and not just at their desk. They show their devices to other people (40% of iPad owners in Forrester's surveys report regularly sharing their iPad with other people). Fostering that desire is a smart way to differentiate your piece of glass from other pieces of glass that perform essentially the same functions.
Beyond the device itself, Apple's product strategy cultivates an emotional connection with consumers through:
- Content. Apple's unrivaled app ecosystem adds value to its product. With 65,000 apps, the iPad has the edge in custom-built content. For consumers shopping for tablets, the number of apps isn’t as important as the price of the device, battery life, and 3G service flexibility, but it does matter: 23% of consumers considering buying a tablet rank “number of available apps” in their top-three important features, according to a Forrester survey fielded in January 2011.
- Channel. The Apple Store is a demo lab as well as a channel. Competing tablets will all rely on Best Buy, Wal-Mart, Target, and carriers to sell their devices among many other products. At the Apple Store, the iPad is featured front and center, and consumers can try it out and have knowledgeable sales staff teach them how to use it and discover new content.
- Service. Apple’s investment in its retail stores pays off. In a Forrester study conducted last year, we found that consumers are willing to pay more for Apple products because of their perception that the service (real humans accessible in any Apple Store) is built into the price of the device. In-store service boosts Apple’s pricing power.
The competing products we’ve seen announced so far from Motorola, RIM, HP, and others, while impressive, have fatally flawed price and distribution strategies, which leads us to our call that of the 24.1 million tablets that will sell to US consumers in 2011, at least 20 million will be iPads.
BUT, the tablet wars are far from over. We have yet to see a play from potential disruptors like Amazon, who could enter the tablet market at a lower price point, or Sony and Microsoft, who could offer radically differentiated value propositions. Things could get rowdy. But for now, Apple still defines the tablet market, with a product consumers will desire at a price that’s hard to beat.