NPD Group Blog » Preaching To The Converted

Preaching To The Converted

Monday, March 29th, 2010
By Stephen Baker, Vice President, Industry Analysis

As we near the release of the next market-changing device (maybe!) from Apple, NPD has released some interesting numbers from a new survey Apple iPad: Consumers’ Perceptions and Attitudes. The good news is that awareness among the general population for the iPad is unbelievably high. Almost two-thirds of all respondents were aware of the product with that number ranging from a low of 61 percent among 55–and-older consumers, to more than 80 percent of consumers who owned another Apple branded product. Among the most aware demographics; young people, $100k income earners, and current Apple product owners not only was general awareness high but ownership interest and purchase intent over the next six months were much higher than overall. More than one-third of those expressing interest in the iPad in both the 18-34 year old demographic and among Apple owners claimed they intended to purchase the device in the next six months. Among the high income earners intention to buy in the next six months was more than 50 percent.

But none of this should surprise as these are the core Apple loyalists. Among these two groups, their current ownership of Apple products is nearly 50 percent higher than the overall population. 18-34 year olds are approximately 50 percent more likely to own an iPod, an iPhone, or a Macbook. Within the over $100k demographic there is almost 75 percent more likelihood to own an iPhone, or an iPod touch, and 50 percent more iPod ownership.

Combining the interest, awareness, intent to own, and purchase data give us a pretty solid idea of where the iPad might be headed. With these key demographics being the first buyers Apple will have a great opportunity to see how folks that they understand react to the product. This is really the first time in a very long time Apple has released a new product that is actually really new to the marketplace, and in fact few companies ever get a chance to do that. The iPod followed a few years of MP3 player development, and smartphones and internet access on them was certainly not unusual prior to the launch of the iPhone. What they are really doing is creating an army of beta testers (who are paying $500-$800 for the privilege) to help them understand the potential of this new device. While young people thought the product was too expensive, Apple owners and the $100k demographic felt OK with iPad pricing.

It is apparent both from our survey, and the launch event, that even if the potential buyers are pretty obvious, the potential usage and need is not. The launch event was about email and productivity. And while the survey tells us that most of the activity on computing devices surrounds those two activities and that most activity on mobile devices also follows those two paths, the bigger opportunities are around content and many of the likely buyers are looking for new ways to access content. Young people were far more likely to want to listen to music, watch video clips, watch movies, and display photos on the iPad than other age-based demographics.

All of this makes sense for Apple. In a segment with uncertain prospects target your best customers with a value proposition that is focused around what they currently do with similar devices. This lets Apple challenge those current devices (notebooks and netbooks especially) that consumers are currently using for these core activities without cannibalizing their current businesses (except the iPod touch and since the iPad sells for $100 more than the most expensive Touch, that is an OK trade for Apple). Then Apple can watch and see if that productivity story turns to media.

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