Is the iPad Another AppleTV?

I was trading tweets the other day with David Griner about the iPad. He thinks it’ll be successful. I don’t. Time will only tell if that’s the case. As we were conversing the subject of AppleTV got brought into the conversation. I purchased an AppleTV in 2008 and like it for what it is. It’s not a game changer. It’s not revolutionary. It is, however, a very cool way to bring photos, videos, and music to your primary screen…the TV. Despite how cool it is to me, even the great Steve Jobs openly admits it’s a failure.

In my 5 Reasons Why The iPad Will Fail post a few days ago, I compared the iPad to the Newton. In raw sales the iPad has already surpassed the Newton. However, I wasn’t thinking of total sales when I was talking about success. I was thinking more about sales relative to expectations and hype. For example Piper Jaffray thought the iPad would sell 700K units on opening day. Guess what? It didn’t. It sold less than half of that. Of course, that alone doesn’t make the iPad successful or a failure.

As I was reading old articles about the AppleTV, I was strick by this great quote from a 2008 CNET Article:

The problem is, once again, that Apple refuses to accept the world doesn’t begin and end with QuickTime and the iTunes Store. Whether or not his proprietaryness Lord Jobs likes to admit it or not, there’s oodles of video online, most of it encoded in DivX, XviD or H.264/x264

This is eerily similar to the situation with the iPad. Except with the iPad, we’re not only limited with video content, we’re limited with photo content, document/business content, and more. The chief problem here of course is that Apple believes your life should be managed through iTunes. And the reality is, we shouldn’t have to, nor do we want to.

But, I digress…let’s get back to the topic at hand. The AppleTv was a failure. That’s not a topic for debate. Jobs specifically said,

Here’s how I look at it. Everybody’s tried to make a great product for the living room. Microsoft’s tried, we’ve tried — everybody’s tried. And everybody’s failed. We failed, so far.

There’s nothing wrong with failing. I truly believe that Apple failing at the AppleTV lead to product and feature innovations in the iPhone and now the iPad. So let’s focus on the iPad for a second. Here’s what we know so far:

Analysts predications were 600,000 iPads would be sold on day 1
300,000 iPads were sold on day 1
74% of buyers were mac users
66% of buyers were iPhone users
39% of buyers opted for the cheapest option, the $499 16GB iPad

The full survey and all the data is as follows:

So what does the data tell us? Well a few things, from my perspective:

Are we really surprised that the majority of iPad buyers were existing mac and/or iPhone users? They are the baked in audience. They are the Apple fans. That’s not a slight nor is it an insult. It’s simply a fact that Apple fans are more likely to purchase Apple products than non-Apple fans.
If only 26% of iPad purchasers were non-mac users, that means Apple grew their market by 78,000 people. That’s small. That’s crazy small. Why do I say that? Well, of those 78,000 you’d need to subtract out corporate purchases (my agency purchases at least 3), developer purchases, bleeding edge/technology buffs, schools, etc. If you take those out of the equation, the 78,000 looks pretty damn tiny.

I feel like the data above is a great indicator that the iPad market is small. The pricing information shows us that it’s simply too expensive of a price point for a device that doesn’t solve a specific need.

Piper Jaffray is forecasting 5.6 million iPad purchases by the end of the year. I just don’t see it. What do you think?