Last Updated Jun 2, 2010 5:00 PM EDT
We know that Apple has sold over 2 million iPads in under two months, and that includes only a weekend of sales in Europe. Now look at last quarter's distribution of Mac unit sales by operating segment (table is from Apple's 10-Q for January through March 2010):
The retail segment includes all sales through Apple's own stores, regardless of location. That means if you add the Americas and retail Mac unit sales, you get 1.577 million units, which is an upper bound to the number of Macs the company actually sold in the Americas because the Americas will include anything in South America or Central America and retail will include all Apple retail store sales throughout the world. There fore, the number of Macs that Apple sold in the U.S. will be significantly less than this.
However, I'll be conservative and pretend that this is the number of Macs that Apple sold in the U.S. That would mean that, at just under 900,000 units, Apple at the absolute worst sold in Europe 57 percent of the number of units it sold in the U.S.
Assume for a second that the same pattern will appear with the iPad. Remember that 500,000 iPads sold in the first weekend in the U.S. Then we could say that in the iPad's first week in Europe, Apple sold 285,000 iPads, leaving 1,715,000 sold in the U.S. alone in under two months.
But realize that 1,577,000 Mac units -- significantly more than Apple actually sold in the U.S., because it's an upper bound â€" is three months worth of sales. The iPad has already passed the number of Macs that Apple sold in the same geographic territory and is already working on lapping. The European boost came from only a few countries and will continue to grow, with more product availability and additional countries. Even if you argue that Europe was responsible for a full 500,000 iPad sales in the first weekend, that still leaves iPad sales in the U.S., at the very worse, at 1.5 million for two months, versus 1.577 million Macs for three months. The ascendancy of the iPad is clear.
This will have enormous ramifications, both on Apple and on the industry as a whole. It may be that all these iPad sales are incremental and won't depress Mac numbers, but I have a hard time believing that. Although it needs to tether to a personal computer, I think the iPad breaks the need of many for a laptop or netbook. That could mean Apple's success with the iPad will ultimately reduce its net revenue (as average net sales per Mac unit was $1,278 last quarter) and possibly even its profit. However, that is completely dependent on seeing what happens to Mac unit sales and whether they either drop or their growth slows.
More interestingly, the industry is about to have a cow. Apple's competitors simply don't have competitive products yet. Once again they've waited to see what Steve Jobs did and are now late. Many iPad buyers use Windows machines. How many will depart their accustomed camps and take up residence elsewhere? There's also the strong potential that many people who have purchased PCs or laptops in the past will be satisfied with tablets and ultimately spend even less on hardware and software than they have in the past.
I think Steve Jobs has been canny in undertaking the iPad. People want to spend less and they don't need as much computing power and capabilities as they have generally bought. Add the wow factor, and you've got a product category ready to kill off many traditional PCs sales.