Tablet Nation?

In an age when technological devices can achieve rock-star status, the launch of the iPad managed to attach “mania” to the brand’s name as a popular suffix. (Try a Google search for the ungainly neologism “iPadmania” and you’ll see what I mean.)

But looking beyond the media hype, how do iPad owners and non-owners actually feel about the gadget, and what do their attitudes portend for a broader category of tablet devices? Based on polling of iPad owners and adults in general, a report from YouGov Marketing Insights takes a close look at the matter.

Notwithstanding the torrent of publicity that accompanied the iPad’s launch, it’s not as though everyone and his brother is itching to buy one. Respondents who hadn’t purchased an iPad were asked, “How likely do you think it is that you will buy this product in 2010?” Two percent said “definitely will buy it” and 5 percent “probably will buy it.” Apart from the 14 percent who weren’t sure, this left eight in 10 saying they “probably will not buy it” (32 percent) or “definitely will not buy it” (47 percent). The polling was fielded in mid-May.

“A lot of the initial hype was around early sales, which were much higher than many analysts predicted,” says Katy Mogal, who follows the new-media market in her role as svp of client services at YouGov Marketing Insights. “But apart from its sales success, in its current form the iPad is unlikely to see mass adoption along the lines of the iPhone, for example, because it doesn’t easily accommodate office functionality, such as word processing and spreadsheets, and it doesn’t make phone calls. It’s not a substitute for anything a consumer already has. It really is a ‘third device’ — i.e, something nice to have but not necessary, and this limits the market potential of a device that costs at least $500 and does nothing you can’t already do on a smartphone or a laptop.”

The iPad’s early sales success has come largely thanks to people who already owned an Apple product — or, rather, plural Apple products. Forty-five percent of the survey’s respondents who’ve bought an iPad are owners of at least three other Apple products, and another 22 percent own two other Apple items. Just 9 percent don’t own anything else from the company. The early-adopter audience for the iPad also skews male, with men accounting for 65 percent of respondents who’ve bought one.

You might expect such a heavily hyped item to turn into an object of much buyer’s remorse on the part of those who were swept up in the frenzy. But there’s little sign of that so far. Seventy-two percent of the survey’s iPad-owning respondents said they’re “very satisfied” with it, while just 6 percent are dissatisfied. Fifty-one percent said it has been better than they expected, vs. 6 percent saying it has been worse. Of course, that’s not to say satisfaction has been universal. Mogal notes that “there’s also plenty of evidence of dissatisfaction among some owners — just take a look at the reviews of some of the media apps in the iTunes store.”

As a rule, though, iPad owners regard the device as superior to smartphones for a range of entertainment-related functions. Seventy-six percent said it’s better for reading books, 75 percent for reading newspapers and magazines, 74 percent for surfing the Web, 72 percent for watching movies or TV shows, 70 percent for watching short videos and 63 percent for playing games. Among owners, the iPad also outscored the laptop for these functions, albeit by less lopsided margins. For instance, 57 percent said the iPad is better than the laptop for reading newspapers and magazines, and 42 percent said it’s better for watching movies or TV shows.

“There’s no question that a lot of iPad owners consider the device far superior for media consumption, gaming and a host of other applications,” says Mogal. “If competitors can come close to rivaling this, as well as add, say, strong office functionality, the high-end tablet computer market could become truly explosive long term.”

One gets a hint of the potential market for tablet computers — beyond the iPad — from the findings when the survey asked how interested respondents would be in a hypothetical “tablet computer from Google, using its Chrome operating system, at a price point of $499.” One percent said they’d “definitely” and 5 percent “probably” buy it, vs. 32 percent “probably not” and 46 percent “definitely not.” While the numbers saying they’d buy such a device might look small, there aren’t many discretionary items for which 6 percent of the population is ready to shell out $499 before it even exists (if it ever will). As Mogal puts it, response to the survey on this question “strongly suggests there could be a similarly high demand for a product offered by a strong competitor [to Apple] — provided, of course, the company executes well.”

As iPads and other tablets catch on more broadly, will this tend to constrain the current growth in smartphones and laptops as media-consumption devices? “Yes, especially if iPads become more general-purpose devices and can be easily used for most work applications,” says Mogal. “In this scenario, tablets could actually become laptop substitutes, which means people would carry them more frequently.” And the size of the iPad gives it an edge over smartphones for entertainment functions. “Most people would prefer watching a film or reading a book or magazine on the bigger iPad screen than on a small smartphone screen, given the option,” says Mogal.

In the meantime, iPad owners are creating plenty of word of mouth about the category. Eighty-five percent said they’ve “discussed the device with others” and 69 percent have “recommended in favor of purchasing.” As good as those numbers are, though, they’re lower than the equivalent figures for the Kindle or the iPhone 3GS. Why the gap? “It’s the ‘third device’ issue,” responds Mogal. “Some people may feel they actually need an iPad if, for example, they travel a lot and love movies and are voracious readers. But they’re the exception, not the rule. So some owners seem to struggle with what to recommend it for. This explains why recommendation levels are lower than for the iPhone, for example. Most iPhone owners recommend the iPhone to people who are looking for a mobile phone. That makes it an easier recommendation.” 

The polling numbers underscore the point that people who haven’t bought an iPad are unclear about its utility for them. Forty-one percent strongly agreed that they’re “not sure what I would use an iPad for.” Gaming might be one such function, and iPad owners express enthusiasm about using the device for this purpose. But gamers who don’t own an iPad are wary. As an example of this, 49 percent of non-owners agreed, “I’m not sure how I would hold it and control the game”; 27 percent endorsed the idea that “It’s too big to be a portable gaming device.”

While the videogame industry scarcely needs an assist from tablets, the iPad’s success has stirred hope among publishers that such devices might throw a digital lifeline to their struggling sector. But will consumers who’ve been averse to paying for digital media via computer feel any differently about paying to receive it on an iPad?

“Studies by Nielsen and Boston Consulting Group show there are plenty of people who will pay for online content, provided it gives them some value they can’t get elsewhere,” responds Mogal. “The problem for many publishers today is that free content is ubiquitous, so there’s no compelling reason to pay for it so far. But brisk sales of the iPad and the early success of a couple key apps such as Wired that are designed specifically for this platform seem to indicate that there’s a substantial group of people who are willing to pay extra for something that gives them a better, or at least a different, experience. It will be interesting over time to see how this plays out. Market reactions to new apps like Gourmet, which could potentially resurrect a dead media brand, and Hulu Plus, which proposes an ad-supported subscription model — the concept of which has met with a lot of skepticism — will be telling.”