Why was Apple’s prediction on iPads so wrong?

April 14, 2010 By Robert Scoble

Apple has announced it is selling far more iPads than it expected and is delaying the worldwide launch by a month.

I am seeing this problem in US too. There are lines in stores (when I went back to buy a third iPad I had to wait in line). The demand is nuts for iPads.

So why did Apple guess its prediction so wrong? Several reasons:

1. They didn’t realize just how many apps would ship on day one and how good the quality of those apps would be.
2. Even the app developers never had their hands on iPads (I talked with several developers, even at “hot” companies like Evernote, while waiting in line, and they had to develop their apps without even seeing an iPad) so the marketplace couldn’t tell them before it shipped just how hot this would be.
3. The focus groups that Apple talked with didn’t hype it up enough with the people studying the groups. This is because they, themselves, didn’t have the apps (the iPad without apps is pretty lame, actually).
4. They didn’t realize how fast skeptics would be convinced. I’ve seen this myself. My son was very skeptical before it came out, saying he didn’t want one. The minute he put his hands on it he started changing his mind and within five minutes of using it said “I was wrong.”

This is one of those dangers that Apple has: predicting demand is really tough when your market really can’t see the complete product before it ships.

On the other hand, this is a very positive sign for Apple. It means that the iPad is moving outside of the “Apple faithful” very quickly, which I have also observed in the stores. The people I met buying iPads a few days later from the opening were quite different than those of us waiting in line.

Apple has a runaway hit. Bummer for those of you waiting for yours.

UPDATE: on the other hand, lots of people are skeptical, including ZDNet.

Filed Under: Web

chrish341

very insightful, Simon. No wonder the tech savvy aren't impressed!
eriksherman

There is no shortage, otherwise stores would have dwindling supplies. It's part of Apple's masterful marketing – create a sense of exclusivity and scarcity to push customer demand. So far, sales have slowed rapidly from the first day according to Apple's own figures (http://industry.bnet.com/technology/10007057/su…) and I think this is another attempt to get another sales bump. As for the magical experience, I know people who are Mac and iPhone users who bought them and found themselves disappointed.
goochem

Overhere in Holland there's a toystore selling the iPad for 700+ euro's. That's an impressive amount above the US prices…it just sucks how “exclusive” Apple-stuff gets overpriced when it's crossing the oceans…
Nonetheless it's a big deal overhere too, at least in the techie-news.
I think Apple just plays some good marketingtricks here: create demand by stating the product is scarse, even when it's not..an old trick that still works. As for the techsites, the thing creates views/hits on the sites. Says nothing about how good or bad the device really is.
As for me, I'm all linux and won't buy closed-source stuff…I do admire the witt of Apple though, and I wish there would be better marketing in the open-source field.
Kaz

The supply issue in a dozen extra markets is the issue I’m thinking. Yes there are iPads in the Stores in the US… what happens when you double the number of stores or triple it. Japan, Europe, Canada, Oz. You know have about 400 million more consumers many of whom are more tech ready. I could see the same number hitting the interational release and as such hurting Apple ability to supply them.

Why not hold off, keep them in the US stores so people don’t have to wait, and then built anticipation over sea’s when you have amped up supply.

I think it’s a combo of PR, 3G negotiations (if you start taking pre-orders you want to have Plan Pricing) and actual supply issues.
Christopher Coulter

Ecclesiastical supply-chain nightmares recast as massive demand, nothing new under the Sun.

That said, far more attention in one launch than the entire Tablet PC history, but the category will only now start to take off, with HP and WePad and etc. I am a skeptic, rather wanting full OSX in a good UI form over a big iPod, per se. That said the iPad is a great experience, just not much for real work. Same as iPhone, joy to deal with, but Blackberry for real work.

gopi

You want full OS X with a good UI?

Can you explain, with specificity, how this would differ from the iPad?

Hint: iPhone OS keeps adding more and more OS X APIs. Under the hood, OS X with a good UI is a reasonable description of what we have now.

Mark Ashton

I don’t buy your assumption that sales are extending outside of the Apple faithful…except that they’re also selling some to people like me who are gadget geeks but not necessarily huge Apple fans. I bought mine a week ago and am seriously considering selling it on Craiglist. It’s neat in a lot of ways. Cool way to consume media, particularly news and movies (great for plane rides). But, like a lot of people, it bugs me that I only get to use apps that Apple decides I should use. It also bugs me that it’s only really useful when it’s connected. I, for example, can’t connect to my company Wifi whille I’m at work so I bring it to work and it just sits there all day. Yes, I know I can download the WSJ and NY Times before I come into work but that’s a hassle. And I have absolutely ZERO interest in paying for another 3G account.

I have no doubt that it will be a success. But a raging success? Not so sure.
jgibson24

I doubt that, most people will use it as a couch device and those who are tech savvy will prefer a MiFi type device connecting via WiFi over integrated 3g.
http://linksalpha.com vivekpuri

I dont agree to the theory that Apple is running short on iPad and hence delay in sales. How about, most of the apps for iPad are just too pricey. Even a decent calculator app is $10. And suddenly, Safari does not seem like a fit browser for iPad, while at the same time Apple does not want Chrome into the party. So, here i am with this shiny ipad playing Netflix videos. Wait, isnt Roku a better option for $100 if that is the only app i use or would have paid for?
http://forex-waluty.blogspot.com/ waluta

it will be the same story like with iPhone – first production will be full of mistakes, and only next generation of iPad would be useful after adding some functionality
Paul Sorensen

Maybe the phrase “when I went back to buy a third iPad” has something to do with it
Ted_T

Rich people prefer MiFi maybe — there is a stark difference between a 2 year contract $60 per month MiFi and $15/$30 no-contract, can switch on/off at the drop of a hat 3G iPad.
Ted_T

Vodaphone just announced that they will be supplying data for the iPad in a bunch of European countries, so your statement is BS.

Why people can't accept the obvious answer: the iPad is a monster hit, Apple made conservative assumptions and now can't keep up with demand? Or possibly some component, like the IPS screen would have been constrained no matter what assumptions Apple made.
Ted_T

Total BS. Nothing of the sort has been released. You can't even pre-order it. And how do you know that the vaporware you're spamming about is better than an iPad?
Ted_T

Yes.
http://lawnwrangler.tumblr.com Evan

Focus groups? Apple? Bwahahahahaha…
http://stopmebeforeiblogagain.com/ Vidar 'blacktar' Andersen

I don't think Apple's predictions were wrong. That's a very naive assumption and willfully ignoring history . Aren't we just seeing the same well polished pattern here? Push G1 out the door in limited amounts, stand back, watch demand grow to exponential heights, push G1.5 'delayed' out the door in ampler amounts, rinse, lather, repeat?
JohnDoey

My understanding is that a micro-SIM is just a SIM with the edges trimmed off. Can't you just trim a regular SIM with scissors to make it into a micro-SIM?

Anyway, it's not a walled garden trick, that is absurd. If Apple wanted a walled garden, iPad would be Verizon or Sprint only, no SIM at all, that is the walled garden in wireless. And all the GSM carriers will be offering micro-SIM soon because they'll be offering iPad and the next iPhone (which will also almost certainly have a micro-SIM) soon.
Christian

I think International sales for early adopters will grow even stronger sales In May let’s wait and see
Veb

I don't know what's the problem here. Apple said they are going to delay the launch, it's NOT the end of the world. Remember iPhone was delayed even longer to oversea market. Does not matter it's for PR or not. People who want one will buy 1, they won't say “Oh Wepad is out first, I am going to get Wepad instead of iPad.” Not everyone is early adopter. At first, I said I would NEVER get 1. I ordered 1 after I analyzed my computer usage and iPod touch. iPad would be very useful to me. The biggest complaint for me about iPod Touch is it's just too small. I want something bigger, then iPad is just a perfect solution for me.

I have a first-G iPod touch and still works fine, so I believe iPad will provide me many years of entertainment before I have to upgrade it.
JohnDoey

> I have a laptop, why do I need that

The best way I've found to explain that is to point out that iPad replaces a printer, and the pad of paper inside the printer.

The same way a notebook PC replaces a desktop PC, iPad replaces a desktop printer. The documents you “print” to iPad stay digital and they can be videos or apps in addition to photos and spreadsheets. Instead of having a stack of printed documents in your briefcase, you have an iPad.
JohnDoey

> Something is wrong with the supply.

Not necessarily. There's a ramp-up time. If the factory is setup to make a million a month it may only make 50,000 the first week, 100,000 the second week, 175,000 the third week, and so on. You also need longer QA time at first to make sure that every 3rd tablet is not a dud.

> Major fail by Apple. The other tablets will be here before it even starts selling overseas.

That is great. Bring them on. There have been at least 2 tablets that shipped since iPad and the reviews could have been done by The Onion. They make iPad look even better.

Apple is at least 5 years ahead of everyone else in software, and more likely 10 years. There isn't even another mobile operating system that runs C apps. Other mobile systems are scaled-up phones, while iPad is a scaled-down Mac. They're way, way out ahead of everyone else.
http://www.isights.org/ Michael Long

I was in my local Apple store yesterday and all they had were the 63GB versions. All 16s and 32s were sold out.
http://www.isights.org/ Michael Long

So why was the decent calculator app I just bought $0.99? And aren't 25% of the apps in the store free?

A few apps are pricey. So are a few iPhone apps, for that matter. Most are pretty reasonable, and many of mine have come as free upgrades to existing iPhone apps. Stop with the FUD.
http://twitter.com/thelonederanger The Lone Deranger

It seems fairly ridiculous to suppose that Apple benefits in some way by lying about the availability of iPads. If they told one story now and a different story when they publish financial data for this month then some PO'd shareholder would file a class action suit: those professional shareholder guys love civil suits. And you know they'd jump at the chance.

Just because most Apple stores still have iPads doesn't mean that Apple is sitting on a pile of them in some central warehouse. Given their announcement it seems highly likely that they don't have the extra 300K – 500K units that would be necessary to launch world-wide in two weeks.

Did they imagine that a lot of people who generally hate anything to do with computers would say “oooh aaah I want one” at first sight of an iPad? Probably not. But that's what's happening with some of my very non-techie friends. My guess is that if Apple can make 10 – 12 million of them this year they'll still be sold out a week or two before Christmas.
http://linksalpha.com vivekpuri

I guess 2.5 stars for .99 cents is good enough for you.
JohnDoey

> I guess I'm still skeptic but I'm passionate about openness or rather critical of tight control.

> Windows

When you said Windows you blew your whole argument. Windows is much more closed than iPad. If you're using Linux only and you're not running Adobe FlashPlayer, then you have a right to judge iPad to be not open enough. But if you're running Windows, you do not.

- iPad runs totally open, vendor-neutral W3C HTML5 Web apps; Windows runs closed/proprietary IE Web apps, closed/proprietary Silverlight Web apps, and closed/proprietary FlashPlayer Web apps
- iPad runs totally open, vendor-neutral ISO MPEG audio video; Windows runs proprietary Windows Media audio video
- iPad is running an open source Unix-certified core operating system; Windows runs a closed/proprietary core OS
- iPad is running an open source WebKit browser engine; Windows runs at least 3 versions of their closed/proprietary IE browser engines
- iPad's graphics are open standard PDF and OpenGL; Windows is running proprietary DirectX 2D and 3D
- iPad is UTF-8; Windows is riddled with weird character sets
- iPad runs open, vendor-neutral ePub books; the Kindle reader Steve Ballmer showed off on a prototype Windows 7 HP Slate runs proprietary Amazon Kindle books
- contacts/calendars/mail is all standardized on iPad; on Windows, no

The only place you can make an argument that Windows is “more open” is in native apps, which are traditionally proprietary anyway, but even there it does not stand up. Apple has an approval process that has kept the native app platform 100% malware free, while Microsoft has a blacklist and complicated scanners that have failed to do the same. Apple maintains an alternative open API for developers and users who do not want to use the native API, while Microsoft does not. You can build an HTML5 app on Linux using any tools you like and deploy on any server you like and it will just work on iPad out-of-the-box, which is not true for Windows.

For most of the world's PC users, an iPad would be the single most open device they have ever used. It would be their first Unix, their first HTML5 browser, their first look at OpenGL, and so on.

If you want more open than iPad, you literally have to run Linux without FlashPlayer. Otherwise, give us all a break with the openness blah blah blah.
JohnDoey

> SUPPLY ISSUE

Yeah, the supply issue is they managed to put more units into the hands of users in the first week of availability than any other device in the history of computing.

> FAIL

We should all fail like that.
JohnDoey

> I doubt that, most people will use it as a couch device

The back seat of a car is a couch. The park bench is a couch. The bus, the plane, a train, and so on. There are plenty of places that people read books or magazines but there is still no Wi-Fi.

I've already heard from iPad users that they wish they'd waited for the 3G because they can't stand that it stops working outside their home and office. I've heard a few say they are giving the Wi-Fi iPad to their retired parents once the 3G ships.

> and those who are tech savvy will prefer a MiFi type device

In theory you are right, but in practice, no. MiFi has a 2 year contract, is $60 per month, and worst of all it has a 5GB cap and 4 hours of battery life. iPad 3G has no contract, is $30 per month, is truly unlimited, and has 8 or more hours of battery life on 3G.

http://darkstar.frop.org/~zwhite/blog Zach

Pretty sure that you still have the standard 5gb cap with the iPad data plan.

JohnDoey

They already shipped more in the first week than any other device in history. So a manufacturing problem doesn't make sense. I would think a reader of such a smart blogger would recognize this but nope.

I don't think you're appreciating how big a number it is to ship 500,000 units in week 1.
JohnDoey

> I have to buy from itunes

You don't have to buy anything from iTunes Store to use iPad, iPhone, or iPod. You can get W3C apps, ISO music and movies, and ePub books from any vendor you like.

> Now that I am on Ubuntu I am totally unable to use itunes!!

You can run iTunes on Windows in VirtualBox, unless you are too snobby.
JohnDoey

With the exception of a very small number of iPhone apps that don't run on iPad because they require the phone dialer. That's why Apple says “almost all” or “virtually all” iPhone apps run on iPad.
JohnDoey

Not a bit of what you said makes any sense to me.

Building and shipping units to customers has nothing at all to do with App Store prices, which are set by the developers, and they are selling a ton of apps.

Decent calculator apps can be had for free, both native and Web apps.

Chrome uses the same Apple WebKit engine as Safari, and it's only shipping for Windows right now. Even on Mac and Linux it is very, very immature, let alone on iPad. There is no touch version of Chrome at all. There are many browsers on iPhone OS if you don't find Safari useful.

If you can watch videos on a $100 Roku with no TV at Starbucks or on a train, then yes, you made a mistake buying an iPad.
manielse

Openness mentioned earlier does not mean open source. Openness in this case means that a Platform is not tied to a single marketplace and approval process. Windows is much more open in this case that the iPad/iPhone. I can run anything open or proprietary that has been developed for the platform.

But more importantly, don't think for a second that the iPad platform is any more secure from malware than any other Mobile OS. Just last month at the CanSecWest PWN2OWN hacking contest, the Safari browser was fairly easily hacked to compromise the device. The hackers demonstrated it was relatively easy to bypass Apple code-signing routines and exploit non-root user privileges. I'd say that could easily have been malware or worse if done by the wrong people.
Steven

And why do we care about what some dweeb at ZDNet has to say?
player16

'The hackers demonstrated it was relatively easy to bypass Apple code-signing routines and exploit non-root user privileges.'
Yes the Mac went down. It was the first in line to be chosen. It took the bloke (a principal analyst at a security consulting firm) several days of research to write a program(bug) to link onto HIS site to exploit on the day. It took him less than 2 minutes on his Macbook to log in and pull up HIS site.
Personally, I would take that with a grain of salt so I wouldn't let that episode hold you back on getting a iPad (v1). As you can see, the single market place is doing extremely well… unless you like to tinker in which case, get the SDK and make your own apps. But you said it yourself: 'I can run anything open or proprietary that has been developed for the platform' (Widows). The Apps are freely developed for THIS platform and tested by Apple to an agreed standard to run on Apples' product. That's also why the iPad does not do flash -a 12 year old, legacy, somebody-else-controls plug-in: this is 2010, not 1998. Adobe is also closing the market which is making that openness turn into a fallacy. [Adobe does not have a platform so they have and develop plug-ins that runs on other platforms. So, when tech advances, the plug-in gets left behind.] The last time Apple dropped that control was when SJ left and look what happened.
But it's OK to hold back on version 1 with you sounding like a Windows person bringing all that mental security baggage with you, it would make you wait. Try a iPod Touch first and see what you think. It's not nearly as big but the UI is relatively the same.
wingsy

Item #3, “Focus Groups”???? Apple doesn't use focus groups, never has, and never will.

http://www.formandfunction.com/ Jonathan Gibson

Actually, although this is correct, they do study user-actions in great depth and length. Over my career I have done many prototypes for Apple’s Human Interface Group, and others, that simulate interface options.
They take great care to measure the smallest of gestures and this polish is why so many ‘late adopters’ {you know, most of the world: your mom, dad, sis, niece who can’t be bothered load-balancing their Droid-thang and have lives and tasks they want to get on withe} respond well to a device that “just works” as naturally as possible with the interface fading away as users focus on the goal. Apple believes in open standards and closed products and the world is responding with two big thumbs up.

popupbooster

The Emperor's new clothes.
The initial spike in demand is from people that want to be cool: it's the Emperor's new clothes you can buy for $500 – $900.
The question is if the demand will sustain over a longer period of time once the coolness diminishes.

As about half the people in US have or had a foreclosure home, they are not going to buy an iPad. They will be happy to have a roof above their head and a TV set.

http://www.formandfunction.com/ Jonathan Gibson

LoL…
How’s that waiting for iPhones to no longer be ‘cool’ working out for you?
Bueller? Bueller?

Can’t let these comments pass. What a silly stat: Your prices are not factual and you throw a Red Herring because the homeless NEVER buy new gear while a great deal of people, say students, ALWAYS need something like a netbook, which this handily replaces.
By the time it’s cool ‘enough’ for a skeptic like you the prices will be ever-lower and you will _finally_ be able to buy a competitor product … while Apple ships version 2.0 if the iPad.

manielse

I actually do own an iPod Touch along with my Motorola Droid, the iPod Touch is a very nice device even though I don't use it often. The same can be said for the iPad, security is not the issue here as I just mentioned it in response to JohnDoey's view that it's very secure. Also, though I don't agree with how it is being done, I'm glad to see Flash going away in favor of standards such as HTML5. But as Flash is a 1998 plug-in as you said, Apple's view of how development can be done and consumer lack of choice is also an ancient model that has to go away as well. And honestly, I'm not really sure if that's a Steve Jobs thing. I never really felt that control culture while being an Administer of NeXtStep UNIX but, even during those years, Apple has always had that culture. I really do want to like Apple and it's products but there's something about the culture that really bothers me which I place as very important in my product choices. I guess it's a Trust thing.
player16

The WePad? Runs on Android OS. Well maybe she can get 'some real work done' as they say about the iPad… after they make the software programs touch-pad aware… and QuickOffice for Android… forgot, it's an editing program made for a phone not a 'pad'. Well, get some of those free games to try out… good luck with that; are there any… for a 'WePad'?… for Android? Go to WePad Meta-Store. That's right, it does Flash. Plenty games in Flash. Plug in that mouse… Yep, many of the Flash games require a mouse input and aren't made for 'Pads'. Don't drift too fare from that hot-spot… It seems to be G3 only. That's OK. I'm sure you have unlimited G3 access or a looong enough ethernet-cord… near your table… where your mouse is. Get apps from that WePad Meta-Store… in Germany -it's in the cloud. So you'll be buying 'Made for WePad' apps from that WePad Meta-Store only -it's like iTunes but it's not iTunes. But you could probably troll around and Google the net for more apps made by… who knows; using… who knows; to run on… who knows… as long as it runs on Android, you'll be right. You got until August to brush up on that Deutschland when it comes out. That's when it comes out but not sure if it makes it to the states… Maybe in time for xmas. Fly over, pick one up. Hell, by then MS Courier will be out… oh forgot, that's 2011… sometime in 2011.

Crap, just get an iPad … NOW!
jgclarke

Robert,

I'm a long-time reader and fan of your work, but I respectfully disagree with a few of your points on this post, including your thesis. Feedback:

1. The quality of apps is nowhere near as high as not only expectations, but basic quality levels. Taking the high-profile Netflix “app” as an example, the median quality of apps, as well as apps at the margin, are demonstrably lower than even the iPhone, which despite the high range of apps, have a low quality average.

2. Your second point contradicts your first, and in fact would be more sensible as a high-quality reason in favor of a disappointing launch. I'll take that as support of my claim.

3. Your third claim is your strongest, but I am skeptical of it on face and would be curious to read any evidence in support of it. Assuming it is true (despite Jobs' famous quote that “We do no market research”), and assuming that focus groups were designed to correlate to their supply chain, the correlation would be minimal at best.

4. This claim is somewhat dubious in addition to be anecdotal. Skeptics being what they are, they would need to come in contact with a friend or co-workers device in order to even be convinced. The ZDnet blog post you link to provies ample counter-claim (as it is equally anecdotal) that few opportunities for this conversion exist, particularly outside the margin of Apple fans like yourself.

While the ZDnet blog post you linked is equally heavy on anecdotal evidence, it does discusses two other concrete scenarios: One, that Apple is experiencing internal problems with its supply chain, and attempting to “spin” those problems in a predictably positive way; and two; that Apple is notorious for over-stating success claims, partly due to its favorable position in the media and the likelihood of having those claims perpetuated.

I don't argue for sure that the iPad is *not* catching on, only that the evidence in support of this claim is dubious an anecdotal, while the evidence in support of supply chain problems (as opposed to runaway success) seems slightly more likely in the absence of further evidence.
Christopher Coulter

“absence of further evidence”

Historical precedent, rather, and the fact that every manufacturer does this almost as a matter of policy, including his former employer, NEC, extremely limited Tablet PC supply, coughed up as a box-office hit, downright laughable, but they were dead serious. And then the “eyeballs accounting” and millions of dead sign-ups counted at Microsoft Spaces hits, Dare Obasanjo accounting styled.

But as they say in things investing, past success not always an indicator of future returns (and flipside), so history is an imperfect mark unto itself on the whole.

As for contradicting points, thats a blogger default playbook, you get used to it over time.

1. God is Love
2. Love is Blind
3. Ray Charles is Blind
4. Ray Charles is God
Christopher Coulter

I don't think this joke is ever going to get old. http://bit.ly/8WYnvr
Befalump

More like a runaway epic FAIL. Apple is suffering from major supply issues not overwhelming demand. With countless tablets that are as good or better launching this year, some this summer, they will soon find themselves to have an ever shrinking tablet marketshare. That Apple is having to delay launches is terrible for Apple with all the rival tablets on the way. The person who wrote this post must be some sort of apple diehard fanboy. There is probably a picture of the blogger holding up his ipad somewhere all triumphant like.
http://www.BriefEpisode.com/ Gib Wallis

At the Apple Store at The Grove here in Los Angeles, there doesn't seem to be any shortage. Lots of people mill about and try the iPad, and just listening to the discussions amongst friends and family about it is pretty interesting.

In contrast to the selling out the supply, it seems that they aren't moving nearly as much as is being reported in this given store, and a lot of people say it's gorgeous but don't know what they'd buy it for.
MK

Scoble this blog post blows – no content as usual. You ran out of content a long time ago – please read it for yourself, … never-mind why bother making anything good.
MartynChamberlin

Aw I'm glad Patrick discovered the good things about the iPad! He was really skeptical before it came out.
Some Guy

All the foreign developers I know just got a friend in the USA to buy an iPad and ship it to them. As for the simulator not being good enough, most of the iPad apps that were available on day one came from developers who didn't have iPads yet.
James Katt

Apple doesn't do focus groups.

One reason Apple did not predict the huge demand for iPads is that Apple tends to be very conservative in predicting demand of its products. This way, it doesn't get stuck with huge inventories of unsold products. Apple is better than Dell in inventory management.
http://scobleizer.com Scobleizer

You're wrong there. A friend of mine was on the focus group for the iPad.
http://scobleizer.com Scobleizer

Hah! You want content, go over to http://building43.com or http://youtube.com/scobleizer plenty of content there!

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