I happened to be in Australia on Friday as the Apple iPad went on sale there, predictably attracting shoppers who queued through the night at the George St Apple store in Sydney.
Adelaide, where I was, doesn’t have an official Apple store, but the iPads on offer were long gone by the time I got to the Next Byte store off Adelaide’s Rundle Mall. Apple wannabes pensively asked the shop staff if they had any more units available and lingered pitifully around the display units when told the iPad had sold out.
Ironically however just 30 metres down the street and three floors up, in the middle of the David Jones department store, sat a stack of iPads. It seems no one had thought to check in there for an iPad and/or David Jones completely dropped the ball on getting in on the iPad hype. After all, who goes to a department store to pick up gadgets anyway?
What really struck me however, is the huge rort that exists in iPad accessories. How about paying A$82 for a simple aluminium and rubber stand to prop up your iPad, or A$40 for a badly sewn nylon bag to carry your iPad around in? I saw both being snapped up by early adopters keen to kit out their iPads with accessories and happy to take the dregs of what was left over after the stampede had receded.
Padding out a sale
So just how much do accessories add to the price of an iPad? Forbes have done some calculations on this, estimating that the average iPad and accessories sale comes to US$650:
* It’s possible Apple will reach 2.5 million iPad shipments for the June quarter. We’re assuming that delays in production, as well as a general slow down lead to just 500,000 sold in June.
* Apple’s entire company only generated $1.8 billion in revenue during the June quarter of 2000, ten years ago.
* Assuming an average sales price (iPad and accessories) of US$650, that’s 1.3 billion in iPad revenue for Apple already, and could reach more than $1.6 billion for the quarter.
Now that probably assumes that the accessories sold are Apple-branded accessories, such as the keyboard dock or the official Apple leather folder. A range of vendors who made their name selling accessories for the iPod, such as Griffin (no relation, but it would be nice to have an iPad case inscribed with my surname!)and Belkin, are also selling iPad accessories. What is the potential market here? Well, you need only look at the accessorising fad that the iPod kicked off. This from the New York Times in 2006:
Last year, Apple sold 32 million iPods, or one every second. But for every $3 spent on an iPod, at least $1 is spent on an accessory, estimates Steve Baker, an analyst for the NPD Group, a research firm. That works out to three or four additional purchases per iPod.
Some of the accessories that came out in the early days of the iPod were incredibly useful – I had an adapter that turned the iPod into a dictaphone and an FM tuner that allowed me to use it through my stereo in the car. But early adopters need to beware when the iPad arrives in New Zealand late next month. The initial wave of iPad accessories contains some real duds – shoddily made gear at over-inflated prices. Wait for supplies of the good stuff to replenish or for the iPad ecosystem to grow, which it rapidly will do, if the iPod is anything to go by.