MARKET LEADER q1 11 COVER draft 1.indd - The Marketing Society

t e c h n o lo gy
dick stroud
Image: Courtesy of Apple
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Philosophical: When
the iPad was launched
it received a lot of
criticism from ‘techy’
commentators who saw it as yet
another tablet PC with an appeal
limited to Apple devotees.
Apple sold more iPads, in
the three months following
its launch, than the worldwide
sales of tablet computers, by
all vendors, in the previous
two years. Sales for 2010 are
expected to top ten million.
This suggests that there is
more to the product’s success
than just Apple’s brand
reputation.
When interviewed about
the reasons for its success,
Apple’s chief executive
officer (CEO) Steve Jobs
explained that the iPad was
not for people inputting lots
of data but for those who
wanted to consume content,
be it text, audio or video,
wherever they wanted, in the
most pleasurable way. This
describes the requirements of
many older people.
The iPad’s success is not just
about ‘what’ it can do but the enjoyment
of doing it. We know that as people age
they value ‘experiences’ more than ‘stuff’.
Apple seems to instinctively understand
this and has, with its smart devices, made
using a computer both functional and fun.
The future for older people could be
app shaped. The market research about
the sales of smart devices is limited and
sometimes contradictory. There is general
agreement that the 55-plus age group
accounts for just under a quarter of the
smartphone market and is growing in its
share. The chart (left) shows research
from Nielsen for the sales in the US of
the Amazon Kindle and the Apple iPad
and iPhone.
Nielsen estimates that 22% of iPads
are purchased by the over-45s. In
another report, Nielsen states: ‘Over
time, we believe the over-55s age
segment will represent a significant
growth opportunity … we should not
underestimate the appeal of Apple’s
products as easily and intuitively usable
devices for consuming content.’
The age demographics of Kindle sales,
an e-book reader that was launched a
year before the iPad, is now exhibiting
a significant skew towards the older age
Apple has continued to push the boundaries
of technology to simplify access to content
groups with the 45-plus accounting for
42% of sales. This is not surprising since
people in the 55-plus age group purchase,
on average, twice the number of books of
25- to 34-year-olds.
Most reviewers believe that reading a
book on an iPad, using the Amazon app,
is a more pleasurable experience than
using the Kindle. With sales of Kindle
e-books greater than the combined
sales of hardback and paperback books
it suggests that the use of smart devices
for book reading will be a major driver
of sales.
Recent research of iPad sales in the
UK, conducted by YouGov, revealed that
the over-55s account for 20% of sales,
approximately the same level as 35- to
44-year-olds. Two-thirds of iPad users
are male, but YouGov discovered that
the people thinking of purchasing the
product were predominantly aged 55-plus
and female.
Older consumers already represent
a significant customer group for smart
devices and one that seems set to grow
in importance.
Implications for
marketers
If the challenge of integrating
Web 2.0 and social networking
into their organisation’s digital
strategy was not complicated
enough, marketers must now
embrace the opportunities
enabled by apps and smart
devices. These are four of the
most important issues that
marketers must resolve.
This is ‘day one’ of the
evolution of apps and smart
devices. In the next 24 months
there will be significant price
reductions in the hardware and
an order of magnitude increase
in numbers of apps. Already
speculation has started about the
functionality of the iPad 2.
The digital marketing
intelligence website eMarketer
estimates that in 2011, iPad
shipments will reach 36 million
devices. Although slow to
respond, other vendors are
beginning to ship competitive
products that will accelerate the
downward price pressure.
Soon, hundreds of millions
of consumers will spend the
majority of their digital time
using apps on these devices. This is not a
technology that can be ignored.
An age-neutral technology
Two of Apple’s ads for the iPhone feature
a dialogue between child, parent and
grandparent. The US ad features a video
conversation between father and son. This
must be the first instance of a categoryleading
consumer technology product
not being marketed exclusively to the
youth sector. Apple seems to instinctively
understand the age-neutral appeal of its
products.
Marketers need to learn from Apple’s
approach and not pigeonhole the
technology as an early-adopter youth
product. Not only will smart devices
be popular with the digitally literate
older consumer but they are likely to be
important in helping to reach the UK’s
nine million digitally excluded over-55s.
Post Web-centric world
In August 2010, Wired Magazine
published a contentious article entitled:
‘The web is dead. Long live the internet.’
Clearly the web is far from dead but the
use of apps is likely to reduce the amount
of time that we all spend accessing the >
Market Leader Quarter 1, 2011 45