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Apple: What Black Friday May Mean for iPads

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It’s time to refocus the smartphone discussion on tablets.  Apple’s iPad has proven to be disruptive, innovative and a market leader.  The iPad’s performance over Black Friday lends insight into another venue that Apple is expanding its reach.

The iPad generated more online shopping during a record Black Friday than any other mobile device.  Online sales surged past $1B for the first time ever on Black Friday last week.  According to comScore, online sales were up 26% to $1.042 Billion, making it the biggest online sales day in 2012.   More importantly to this analysis, mobile shopping boomed with 24% of consumers using a mobile device to access online retailers, and purchases were up 16% over last year.  According to IBM’s 2012 Holiday Benchmark Reports, the greatest source of mobile traffic came from the iPad.  It generated 10% of online shopping, compared to 8.7% from the iPhone and 5.5% from Android devices.   And while iPad’s traffic leadership is impressive, what is more stunning is the growth from last year relative to Android devices and iPhones.   Android device traffic grew 36% this year from a 4.0% market share last year.  iPhone traffic grew 62% this year from 5.4% market share last year.  But the iPad took the lead with an impressive 105% growth this year from 4.8% market share last year, clearly accelerating as the preferred mobile online shopping device.

One reason why the iPad has become more popular as a mobile shopping device is the screen size.  Shopping is inherently a visual activity, and the larger screen size makes the experience easier and more compelling.  comScore’s Andrew Lipsman commented that, generally, they have noticed that tablets connect to the internet more in the evening hours, 7pm -12am, than other times of the day, and one of the most common activities is shopping.

Yet, other tablets did not come close to the iPad as a shopping venue this past Black Friday.  The iPad dominated over other tablets by an even greater margin than it did with smartphones.  Of the tablets connecting to online retailers, the iPad accounted for 88.3% of traffic, followed by 3.1% for the Barnes and Noble Nook, 2.4% for the Amazon Kindle and 1.8% for the Samsung Galaxy.

One reason for the shopping disparity between iPads and other tablets could be if the sheer installed base of iPads dwarfed that of the other tablets.  But that is not the case.  In October, Pew Research estimated the market share of the installed base of tablets in the US.  They determined that 52% of tablet owners have an iPad while 48% of tablet owners use an Android device.  21% of tablet owners have a Kindle Fire (part of Android’s 48%).   This means that while Apple has 52% of the installed base, it is accounting for 88% of traffic versus Android’s 48% market share with only 12% of traffic.  At least for now, consumers with iPads are shopping online more than other tablet owners.

And how does the iPad’s installed base stack up against smartphones?  According to comScore, 52.5% of smartphones in the US run on Android (approximately 62.6M) while 34.3% run on Apple iOS (approximately 40.9M).  And there are an estimated 30M iPads in use in the US.  With this installed base and a greater familiarity with smartphones, one would expect that more online shopping would be accessed with a smartphone.  But that didn’t hold true.  Despite having less than half of the installed based of Android smartphones, the iPad achieved almost twice the online shopping for Black Friday.

What does this mean?  First, it could mean that the iPad is proving to be an extremely meaningful category sitting between laptops and smartphones.  As we know, many market researchers expect tablets to overtake computer sales within the next five years.  Second, it could mean that the screen size of the iPad lends itself to visual activities that smaller screen sizes don’t.  As I’ve written before, video advertising has proven to be very effective on tablets.  And, third, the data evidences, at least as of Black Friday 2012, the preferred mobile device for online shopping is the iPad.  This could have big implications for the iPad going forward.  Most tend to think of the iPad as a great device for content consumption, be it reading or watching video.  However, e-commerce may become the killer app for the iPad.  As mentioned above, one of the more popular tablet activities during leisure hours is online shopping.  If shoppers arrive through iPads, retailers and advertisers will notice and allocate resources appropriately.  This is just one more area where Apple is building up an ecosystem around creating delightful user experiences.