This is going to be a long post, but its on subject, it is me responding to a person who says we know who is going to buy this tablet, it is X, and this is my counter response.
Feel free to skip it, if you do not care about consumers vs creative professionals, vs schools, vs consumers again. I do provide sources and good comments but my post is long.
Who is going to buy the Ipad Pro?
The Pro is probably aimed at creative professionals who would replace a Wacom tablet with this thing. There will probably be a few who buy one just because they want a bigger iPad, but I think most sales will go to people who want to use it for drawing or other workflows suited for a stylus. These people won't have a problem shelling out $$$ for the pen or keyboard because they're already buying expensive gear from other companies to suit their needs.
The creative
professionals market is probably not as big as you think it is.
1st Group, the
Creative Professionals in the United States, I do not have numbers for Creative Professionals in the World with Income to buy a 1k tablet
There are only 2 million people in the US employed in jobs related to design, art (like drawing, illustrating, and painting), architecture, and photography. But that 2 million number also includes, writers as in books, writers as in movie and television, directors, producers, performing artists such as movie, television, radio, plays etc.
Source Washingtion Post.
Thus when you remove those performing arts type people such as writers, directors, and actors only about 65% of those 2 million people are related to some form of artistic design which most people associate with the word art and not the word performing arts.
So roughly 1.3 million people in the US that do this for an occupation. But this does not mean there is going to be 1.3 million sold units yearly to creation professionals
* Some of these people can't afford the ipad pro,
* Some of these people are happy (at least for the next year, after 12 months we see a newer model) with their current set up.
* Some of these people have no need for a active digitizer stylus unit.
* Some of these people already have or going to prefer a windows or android tablet with active digitizer.
So how many of these 1.3 million people plus other people in similar countries around the world are going to buy the ipad pro
in the next 12 months since after 12 months there will be a newer model the Ipad Pro 2 or something
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Here are some other possible markets and why I do not think they are going to be big markets
2nd Group,
Public School Districts
I do not believe we are we going to see a lot of these in education via school districts for art due to the disaster the past ipad sales to education were, and the fact these are significantly more expensive than traditional ipads.
* There are about 15 million people in the US that are currently attending high school (9 to 12), and about 55 million people once you consider k to 12 (higher amounts of kids drop out the older the person gets, kindergartens often go to school). I mention the high school vs elementary and middle school since high school is more likely to have fancy art equipment that is meant to be professional vs the k-5 or 6 to 8.
* Of those 55 million people in school, 50 million are public school
* Almost all public schools flat out can't afford $1000 tablets. The LA 1.3 billion dollar Ipad deal was a very good test case of whether Ipads are useful for education. This program when started was hailed as showcase of apple and pearson bring innovation to education. 2years later LA school district is returning the tablets and they want their money back.
--- If you do not know who pearson is, they are the largest US textbook maker. They are not very friendly to parents and teachers, here is john oliver comparing them to the cable companies and implying they are as equally evil (
https://www.youtube.com/watch?v=J6l...Youtube of Last Week Tonight with John Oliver)
---- So the reason why LA wants their money back with LA school district currently is in mediation with Apple and Pearson where LA is hoping to get a good outcome, or else they will sue is
* LA signed a $1.3 billion dollar contract with apple and pearson with clauses in the contract that apple and pearson must satisfy to get their money. This is not free money, you must meet certain benchmarks which LA says they have failed. LA says the
---Ipads were not reliable/durable enough for daily use by children and teens,
---The tablets were not locked down so they became distractions for kids where they went to facebook and other stuff during class. This was so bad they had to do a recall of all tablets and update the software manually
---The curriculum that pearson promised was flat out not there, and when it was provided it was not useful or functional due to lots of technical glitches.
The last 2 reasons are the bigger complaints on why they want their money back, but the first is also showing why its a bad idea to give a kid a $700 tablet. $700 was the individual price per each unit which was more than what Apple was charging consumers, with that number apple+pearson were including the actual device+repair contracts+digital education media like digital textbooks, a case, etc.
* With such major budget problems in education you will not convince school districts to buy a $1000 ipad pro tablet vs a $200 dollar chromebook. Chromebooks have been studied in other school districts side by side with Ipads and the Chromebooks are just flat out better and more useful.
---1) Chromebooks are more reliable with each unit breaking down less often
---2) Chromebooks are easier to lockdown and to keep the use of them via students to only education related activities during school hours. This is because the kids see it as "work device" instead of fancy technology good for facebook. In addition google offers better tools for teachers and the districts to lock it down compared to apple.
---3) Chromebooks are significantly cheaper to purchase as well as cheaper to repair and thus cheaper service contracts. So in addition to a lower failure rate, they also are cheaper to repair when broken, and cheaper to buy in the first place.
---4) Google is flat out better with the cloud, any chromebook can recover your info instantly so there is no downtime if you forget to charge your chromebook, or you break it accidently. You are back in business immediately with just a few loaners on site which you can keep in places like the library storage closet on chargers.
In summary Chromebooks act more like actual Textbooks while still allowing internet and document creation vs the apple branded touch tablet.
Conclusion not men of these are probably going to be sold to public schools
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2nd Group Conclusion. Thus in school districts it is likely you will only see these ipad pros in a dedicated art classroom which is representative of 1 in 10 or 1 in 50 of the children going to that school depending on the school's budget. Even then these devices must compete against the windows and android alternatives.
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3rd Group,
Private Schools
* You may see more of these in private schools as a percent of the population of students compared to the percent of public school children who get ipad pros.
* There are about 5 million US children who go to private school vs the 50 million public for about 55 million total in K-12.
* But private schools does not mean rich. Of those 5 million,
--- about 2 million are Catholic based private schools which means funded by their parishioners, or are private charter schools where the government (often state and local) funds some of their cost for these kids are not using the public school system yet often their parents still pay for the public school system with things such as property taxes.
--- about 2 million are connected to other religious organizations often christian based such as Conservative Christian, Lutheran, Episcopalian, Baptist, Friends, Seven Day Adventists, etc.
--- only about 1 million children are in private based k-12 that are secular in nature. Some of these 1 million children have families which are rich and thus school districts who can easily give every kid an ipad pro or similar electronic device.
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Will individual personal parents get these for their kids for Art?
If not the school districts the parents are another option to get these for their kids for art.
* Lets assume parents will buy $1000 tablets for their high school kids to do drawing and not the cheaper options that exist from $300 on up for drawing. Lets assume the ipad pro is the only active digitizer tablet.
-----A) How many kids are seriously into art and will ask for an ipad pro for christmas? What 20% I am asking you, how many percent?
-----B) How many parents can afford it? 16 million of those 55 million children and teens live in a family that makes below the poverty line. 31 million of those 55 million children are on free or reduced lunch programs where the parents may make more than the poverty line but they are too close to the poverty line that most families will be suffering financially. The reduced lunch program ends at 180% of the poverty line, so a single mom with 1 kid needs to make less than 27 thousand dollars, or a 2 parent family with 2 kids less than 42 thousand dollars. Do you think such parents are going to buy the 1k tablet vs the $269 ipad mini or some android or windows tablet? we are talking about 55% of all children in the US are in this categories, they can't afford to buy the pro model.
*If the kids are not into art, why do we need to get them a 12.9" apple tablet vs the 10.1" Air 2 for $500 vs $800+accessories that can end up being $270 or more? Yes the pro is bigger and faster but both do multiscreen, the Air 2 is already fast with the A8x processor and 2gbs of ram. But is there any other reason to get the pro besides, size, stylus, an even faster processor and even more ram? Thus see a lot of parents getting the cheaper models and not the pro. Hell the $400 model ipad mini 4 also does split screen (who knows if it does it well, see info on this later)
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4th Group,
Medicine
I have no idea if medical is a viable option for the ipad pro vs the windows models. They have the money but I do not know enough about the software and which one is utilized more currently in medicine and is likely to be used more in the next few years.
We have 800k doctors in the United States, and 18 million health care or health assistance workers (things like nursing homes and such). Not everyone would need an Ipad Pro even if we gave all 18 million plus similar other industrialized countries, but this may be a significant market but I do not know all the information on the breakdown on the equipment they use in this industry and all the HIPAA stuff.
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5th Group
How about other people who are not creative professionals and not schools?. They just want the ipad Pro for its the best iPad of them all.
* Apple ipads for the last 4 quarters worldwide (not US) has been 65 million (
Source) . But this includes those $269 ipad minis and not models that start at $799+accessories
---(for reference in 2013, q1 to q4, apple sold 71 million ipads for that year, and at higher average selling price due to less competition from android and less people already having a tablet already)
* During the same time all the macs sales, from the old macbook airs, to macbook retina (new core m model), to 13 and 15" macbook pros, and mac minis, imacs, and the mac pro (which looks like a trash can) was 19.1 million and they are actually making apple more revenue for the average mac sold is $1200 vs the average ipad selling price of about $415 once you average those $269 ipad mini intermixed with those $800+ ipad air 2 with lte and 128 storage.
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So in Conclusion
My question is how many of these ipad pros that apple will be selling that are really just cannibalized macbook air or macbook retina sales since they have a similar form factor, similar prices? Remember the old macbook air 11" which is a crappy tn screen at 1366x768 is $899 and the macbooks that are not pro related like the 13" air and the new macbook retina just go up in price from the $899 mark.
* My question Is apple just just going to retain their existing customer base but shifting them from 1 product to a similar price product? If so that is not growth. Now apple is the largest company on the planet, so just treading water is still printing money but it not really creating new users that apple did not have before.
---Here is a contrary point, this may actually be growth per profit per unit even if there is not growth per revenue per unit. This is because apple will be using their own in house cpu which is cheaper than buying intel core i5s for macbook airs and core Ms for macbook retinas. It also gives apple leverage with negotiating power showing Intel they can switch to their own cpus for the low end and not the 35 to 91w skus if Intel does not give them a good price. This in turn means lower prices or more control over sku design with better graphics and such.
How many of these ipad pros are just going to be moving the ipad average selling price a little higher for the ipad cheapest model has gone from $500 to $269 over the last 5 years, and many people already have a tablet of some form?
Is this just Apple treading water and them trying to retain market share and average selling price while at the end of the day having similar revenues and similar profit as the 2014-2015 apple. Or is this a growth area that will make apple have their new most profitable year of all time.
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The Pro is probably aimed at creative professionals who would replace a Wacom tablet with this thing. There will probably be a few who buy one just because they want a bigger iPad, but I think most sales will go to people who want to use it for drawing or other workflows suited for a stylus. These people won't have a problem shelling out $$$ for the pen or keyboard because they're already buying expensive gear from other companies to suit their needs.
I do not know if you were responding specifically to me but I think so due to it being a response just right after mine. But if you do not remember I asked who are consumers and not professionals going to buy this tablet vs the other tablets Apple already made within the next 12 months and I put an important qualifier.
most consumers as in
-----Not schools, not artists, not medical.
This is because it is consumers and not schools, nor artists, nor medical who has made Apple the current business it is, since the return of Jobs and the revitalization of the mac, and the creation of the ipod, iphone, ipad, etc. It is consumers who bought those 65 to 70 million ipads world wide.
I ask for consumers are both price sensitive but also comparison based where they often go for the next best thing when their is a big price difference. Are consumers really going to buy an $800 tablet that is really $1k with accessories when all this tablet is is a bigger faster version of a very good ipad tablet for $500? You also gain the stylus, which while is completely and utterly awesome will not have any launch apps for those non artists users.
-----Especially when the software released over the next year will not be helping the consumer that much with the apple pencil. Artists will have use immediately from day 1 when the Pro comes out in November, but how about the other appl makers who do not do creative art programs, or medical dictation?
I completely agree that in a year or 2 or 3 that this ipad pro will be completely and utterly awesome for consumers for eventually other app makers will incorporate the pencil more into their apps. Furthermore when you add input modalities you come up with apps you never originally create during the launch day.
But that is a year, or 2 from now when we see Ipad Pro 2 or 3, and until then it is a question do you want the $500 model, or the $400 model, or the $269 model vs the $800 model which really is $800+$100+$179 for you are buying it for the tablet and stylus, and probably for keyboard as well.
See next response where I compare the new apple models and their prices. Remember the apple units in the lower tiers are amazing tablets for their price, no android tablet really competes that well once you go $269 and above.