Marco.org

Given:

• iPhones and iPods Touch in use today: 50-60 million¹.
• iPhones sold in the first year (Q3-4, FY 2007): about 1.4 million². For most of this time, the price started at $499, but nearly everyone bought the $599 model.
• iPhones sold in the second year (FY 2008): about 11.6 million, over half from Q4. Most sales in FY 2008 were the better, cheaper iPhone 3G.

How many iPads do you think will sell in 2010?

This is important for app economics. Many developers want to know how many potential iPad customers will exist to determine how quickly (or even whether) our apps need to be iPad-ready and how we should allocate our resources relative to the iPhone editions.

iPhone sales have largely followed the price drops. I expect the same to apply to the iPad, with the added caveat that I think the overall userbase will be smaller in the beginning. As I said in the first article:

Nearly everyone can justify having a phone — the only question is which phone, and it’s easy for people to rationalize spending a bit more money for the really nice one. The same rationale applies to iPod Touch owners: they’re already buying a portable music player, and the iPod Touch is just the medium- to high-end choice.

The national economic problems seem not to be noticeably affecting sales of high-end tech gadgets, so I won’t factor them in directly.

I’ll take a wild guess and say that I expect about 3 million iPads to be sold this year³.

So how will that translate to app sales from iPad owners? For simplicity, I’ll assume that the value of your app to users is approximately the same on the iPad as on the iPhone.

If my three-million-iPads prediction is accurate, and the iPhone and iPod Touch keep growing at steady rates, by the end of 2010, I predict that about 3-4% of app sales will be to iPad owners.⁴

But there’s another dilemma: it looks like there will be significant pressure, both political and technical, for universal apps that run on both the iPad and the iPhone. Like multiple-iPhone owners, this only counts as one sale, since one purchase of the app will run on both devices. So for any apps that use a universal edition, their entire existing customer-base will result in zero new sales. (This effect may not matter in the long run. For most iPhone apps, new sales outpace existing-customer upgrades by a large margin.)

A significant portion of iPad owners will probably also own an iPhone or iPod Touch, and you could argue that they would have bought the app for the iPhone anyway.

So not every iPad owner who uses your app will have been the result of another sale.

Economically, there doesn’t seem to be a huge incentive to spend a lot on an iPad edition.

I think, overall, this is a good thing: it should dampen the gold-rush effect, leaving most iPad development to those who care strongly about it and want to do it well.

Running the numbers like this helps clarify my opinion a bit on the iPad App Store timing question: since the initial gold-rush period won’t be anywhere near the magnitude of the iPhone’s, it’s unlikely to hurt your app much in the store if you’re not there exactly on day one.

Meanwhile, if the iPhone is likely to represent at least 90% of your sales for 2010, it’s probably not a good idea to slack off much on the iPhone versions of your apps, even if the iPhone is no longer the focus of the tech press.⁵