An Excerpt taken from AdAge.com, by Beth Snyder Bulik
What a difference a year can make.
At the Consumer Electronics Show in 2010, Microsoft CEO Steve Ballmer showed off a prototype of a Windows-based tablet. This year, more than 80 tablet devices debuted at CES.
And for that we can thank Apple’s iPad. With more than 10 million sold in just nine months, the already iconic touchscreen computer has a 90% awareness among consumers, as well as a robust purchase intent of 21% among the key 18- to 34-year-old demographic, according to a recent survey by Vision Critical. While a majority of consumers in a March version of the study admitted they were “not sure what they’d use it for,” by a November follow-up they had come up with more than half a dozen needs for an iPad, including internet browsing, apps usage, photo and music viewing, social networking and shopping.
And the tablet device has won over consumers fast. A similar 20% purchase intent was noted for the iPod around 2004, said Matt Kleinschmit, senior VP, media, at Vision Critical, but that was more than three years and several versions after the digital music device debuted.
Even more telling of a product in stellar ascent is that it’s also already showing real signs of cannibalizing laptop, netbook and e-reader sales. When Vision Critical asked consumers in March what the device was most similar to, they got more than a dozen responses, from smartphones and laptops to gaming devices and TVs. This time around, that perception remained even or increased for laptops, netbooks and e-readers.
“A year ago, this wasn’t even a category,” Mr. Kleinschmit said. “After months of learning more about the iPad, what’s cut through the clutter is the laptop, netbook and e-reader association — and potential substitution.” He added that the netbook category, while it laid the groundwork for the iPad’s success as a lightweight internet-mostly device, will be subsumed by tablets in only a few years.
NPD Group holiday sales data released today confirmed cannibalization rates it had predicted of as much as 15%, or about 1 million PCs during the holidays, noting that sales of notebooks were down 9% in volume, while netbooks dropped a whopping 38% over last year.
And so the tech industry has responded quickly to the threat with the dozens of tablets now set to flood the market. The hardware makers, however, aren’t alone in feeling the impact of the iPad. Industries from phones, books, magazines, TV, retail and music are all grappling with post-traumatic iPad stress.
“Surely they’ve all learned the lessons of the music industry and know they have to embrace the iPad or end up like them, but do they have the resources and skill sets in place to take advantage of this opportunity?” Mr. Kleinschmit said. He talked about the iPad’s impact in some of those industries, and what companies can do in response.
EFFECTS ON MAGAZINES:
At launch, magazine executives touted the iPad as the industry’s savior. Yet months later, after a few months of spiked sales for magazines’ iPad editions, sales now are mostly flat or dropping. For most magazines, iPad sales represent small percentages of overall revenue, but that will likely change with rapid adoption. Considering consumers’ wide range of intended uses for the iPad, magazines could not only optimize their own content but also experiment with other types just for tablet use. Pricing models could also be flexible compared with a straight per-issue price strategy. “Magazines so far have mostly ported the content from their print [versions] as opposed to digging into what types of content consumers want, and more importantly, what content they are willing to pay for,” Mr. Kleinschmit said.
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Great post you got here. If you don’t mind, I’d like to share a little bit of my experience of investing to supplement this fantastic post! I’ve worked in many fields – sales and trading, private equity, investment banking to name a few. Now that I’ve got a wife and have retired, I’d like to say that at least a bit more observant than most. Standard investment advice is that you should invest in a diversified mix of stocks, bonds, and money market funds. If you are like most people you will invest part of your money aggressively in stocks, and part conservatively in money market funds and bond funds. However, some young people will go all stocks, and some very conservative people will go all money markets. Please read the award-winning NOVA article by Delos Chang: you will find a lot of great ideas in there. You want to buy a diversified portfolio of stocks as individual stocks are too risky. Highly knowledgeable people or informational investors can buy a properly balanced portfolio, but most folks have a difficult time balancing things on their own. They will misbalance their portfolio by buying all small stocks or all growth stocks, or some other misbalanced assortment of stocks. Back in 2000, Some people bought all Internet stocks; they got burnt when they all crashed together. In 2007/2008, as mentioned by Delos Chang, drug wars really wrecked some currencies. You have to diversify across industries. Unless you know what you are doing, it is best to buy mutual funds that will diversify for you. Buy no-load, low cost funds. Mutual funds should have expense ratios of less than 0.5%. If your company offers a 401K plan at work, try to invest the most you can. The money grows tax free, and some companies will match your contribution. Investing in a mutual fund IRA is also a good idea. I like index funds. Because of their broad diversification, you are less likely to have a dramatic drop in value. They also have the lowest expenses. For stock funds, I would suggest putting ~70-80% of your money in the Vanguard Total Stock Market Index Fund. and ~20-30% in a foreign stock index fund. The Vanguard Total Bond Market Index Fund is good for a bond fund. The Vanguard Target Retirement funds can be good all-in-one stock and bond funds for an IRA. However, there are many different opinions out there on what the best mutual funds are. Read the links below and form your own opinion. If you have high-interest debt, like credit cards, it is best to pay this off first before trying most of the investment ideas above. You should also have 3-6 months of salary saved up as an emergency fund in a bank or money market fund before trying more risky investments. I will warn you that there is a tremendous amount of stock investing books and websites that teach stock investing strategies that don’t work. Particularly bad are people that teach “technical analysis” systems that sound impressive, but don’t work.