How Will iPad Sales Rebound?

With all the talk surrounding Apple’s new iPad Pro and its predicted assault into the corporate workplace, replacing legacy PCs, you would be forgiven for thinking that all is well in iPad/tablet land, and that sales are growing healthily.

Except that it’s not. iPad sales have been flat/declining since 2013 and up till the last earning report from Apple, there has been no sign that it has even hit the bottom.

Therefore, any analysis of what iPads future prospects are has to balance and ideally encompass two opposing trends. You need a holistic discussion.

The following are a few things that we might consider;

  1. The majority of iPad use to date has not been at work. Usage data by hour-of-the-day clearly indicates that iPads are used during leisure hours, and that work hour usage is much less.
  2. Smartphone hardware and software have improved to the point that a very large proportion of tasks can be performed on phones. It is questionable if there remains any common home computing task which definitely needs larger devices.
  3. As far as I know, corporate deployment of iPads has mostly been limited to special tasks for which PCs are ill-suited. Tablets have not yet replaced PCs in corporates in any significant degree, and we haven’t even seen any clues that this is imminent. Common reasons are the lack of support for legacy systems and software (which includes MS-Office).
  4. It has been commonly accepted that long replacement cycles are a major factor in the lack of growth in iPad sales. Well do you know what? Even the latest iOS 9 supports the iPad 2, introduced in March 2011. The only news coming out from Apple that might spark upgrades is the iPad Pro, but given its much increased price, we can safely assume that most current iPad owners will not upgrade their devices to the Pro.
  5. The iPad Pro with the new Pencil and software from Adobe make a compelling case for a device that graphic professionals would love. But we also know that this is a small market. Adobe Creative Cloud, for example, is aiming for a total of 6 million subscribers by the end of 2015. In comparison, it’s likely that the iPad installed base is several hundreds of millions.

Considering the above points, the following is what I’m thinking;

  1. Discussions about whether or not tablets will replace household PCs is totally irrelevant. The household PC market is probably shrinking rapidly, especially in usage hours, as people find that they can browse the web, download music, manage photos, reply to emails very comfortably from their smartphones. Discussing who will prevail in this market isn’t very forward thinking, and as time passes, the relevance of household PC replacements will diminish to the level of insignificance. It is questionable whether replacing household PCs will significantly contribute to increased iPad sales, even if it happened at a large scale.
  2. Selling to creative professionals will not significantly affect iPad sales. The iPad Pro is a great device, but the Pencil will not lift iPad sales.
  3. The iPad Pro is unlikely to mass accelerate the iPad replacement cycle.

It is blindingly apparent that what we have seen with the iPad Pro alone will not revive iPad sales. The answer will have to come from elsewhere. It will have to come from non-consumption of computing; i.e. the conversion of non-computing tasks into computing tasks.

Exhibit. 1: Diminishing role of PCs in household use.

StatCounter comparison US daily 20120816 20151001

This graph (from StatCounter) shows daily web usage by device type. The spikes in the data indicate weekend usage. In the blue line (desktop PCs), weekends show reduced usage. In the green (mobile/smartphone) and purple lines, weekends show increased usage. This shows how desktop PC usage skews to workdays and smartphone/tablet usage skews to weekends. Interestingly, as smartphone usage increases, desktop PC spikes get deeper. This suggests that mobile usage is taking away home PC usage, but not so much of work PC usage.

Google’s Response to Accidental Clicks

Google recently described on their blog, some of the ways that they have been trying to rectify the “accidental click” problem, which some 3rd party studies have estimated to amount to 50% of ad clicks.

This is obviously a welcome move from the advertisers which have ultimately pay for these accidental clicks, but it also raises the question of a) is this enough from the advertiser’s point of view, and b) how much will this impact Google’s revenues.

To understand this, we have to carefully look a the constraints that are carefully worded into this article.

  1. This only applies to AdSense: This article carefully mentions that all remedies and conversion rate improvements apply to display ads only. This does not apply to AdWords ads, the ads that show up on Google search result pages. Now the vast majority of Google’s revenue comes from AdWords. Google’s AdSense business is much smaller and hardly growing in revenue. Therefore we can conclude that Google’s remedies only apply to a small portion of their overall business, and it is a business that is decreasing in importance.
  2. AdSense text ads are not affected: AdSense is comprised of a image ads and text ads. It is unclear which of these is a larger business. However, since banner blindness is well documented and users have learnt to not click on anything that looks like a banner ad, it is possible that text ads actually attract the bulk of clicks for AdSense. This article again carefully makes it clear that the enhancements only apply to the image-containing banner ads.

It appears that Google has restricted the improvements for click quality to the segments of ads which will impact Google’s revenue the least. This is completely understandable given that Google, as any other company, wants to increase revenue and profit, but it is also important that the current efforts will only fix a minor segment of accidental clicks. This means that going forward, there will still remain a significant number of accidental clicks, and that Google may again be pressured by advertisers to reduce these in the not-too-distant future. Although not necessarily a likely possibility, it would be particularly damaging if Google was forced to modify its search ad format (AdWords) to prevent accidental clicks from users who did not recognise that the links were actually advertisements.

Thinking Of Xiaomi, And What Services Are Profitable

One common narrative is that the profits in tech are not in hardware nor even in software, but in services. The poster example for this trend is Xiaomi, a company that is supposedly subsidising the cost of its smartphones, and making it up with profits from services.

I have always had a problem with this logic. My problem resides in the fact that not all services, even the very successful ones, are profitable. Another problem is that the most profitable tech company in the world, Apple, is making its money, not because it has the best services in the world, but because it has the best devices (which are a combination of hardware, software and services). It doesn’t seem to be as simple as services = high profits, hardware = low profits.

In this light, I think it’s important to look at exactly what kind of services Xiaomi is offering. This Wall Street Journal article is a good place to start.

Mr. Lei expects big growth in services built around the smartphone ecosystem. Each day, Xiaomi’s 130 million users use their phones 115 times for a total of 4.5 hours on average, he said. The company has set up a marketplace for online commerce and services, including things as diverse as video, news, financial services, television sets, air purifiers and luggage. “We’re a huge content platform,” he said. “All our [traffic] numbers are astronomical.”

The services described here are all quite commonplace. There are many companies doing video and online commerce, and technically it is very straightforward to do. Online financial services are also provided by many companies, and there is little reason to believe that Xiaomi’s offerings are significantly better than average. The selling of branded television sets, air purifiers and luggage is really low-tech, and in many ways what we would consider a commodity. If these are the services that are profitable for Xiaomi, then we have to rethink what it means to be profitable in services.

It would seem that profitability in services is not directly tied to the innovation provided. At least Xiaomi doesn’t believe so. Instead, Xiaomi seems to be selling mediocre services and products to its loyal fan-base, and it appears to believe that this is how to make profits.

The way I see it is this;

Android smartphones are unprofitable because of hyper-competition. The promise of high-growth lures companies into this market, despite very low short-term profits. On the other hand, commodities like air purifiers. luggage, online financial services etc. have a proven business model that is at the very least, more profitable than smartphones, partially because competition is less fierce. Therefore, one business model is to gain the trust and loyalty of customers by selling good smartphones at cheap prices, to the extent that you become a lifestyle brand. Then sell mediocre but profitable lifestyle products with your branding to these customers.

In a nutshell, gain customer loyalty through high-tech, but earn profits from low-tech.

And “services” is the low-tech part. Which also means that it’s relatively easy to copy.


Just to extend this argument and make it more interesting.

Imagine if Google decided that it needed another business model outside of advertising. Imagine if they adopted the Xiaomi model. What might we see?

I could imagine;

  1. Google branded bicycles, apparel, furniture.
  2. Google banking and insurance services.
  3. Google virtual shopping malls.

Mind you, none of these need innovative tech inside them. Just do what everybody else is doing but leverage the power of your brand to earn higher-than-average margins.

iPhone: “Good Enough” is Nowhere In Sight

A central tenet of disruption theory is that the threat of disruption occurs when products start to overshoot the market. Back in 2012, Horace Dediu posted “Is the iPhone good enough?” and offered a way to measure whether or not the iPhone has reached this point.

Horace suggested measuring sales of the newest model against the year-old versions that Apple sells in parallel at discounted prices. I am not currently aware of any data for this, but there are other ways (although not quantitative) to see whether this is the case. For example, you could look and see if the excitement over new products is high or not. You could see if the average selling price is increasing or decreasing. You could look at whether the new features are being used by the general public (and not just a few enthusiasts).

Judging from the record launch weekend sales of the iPhone 6s/6s plus which were just announced by Apple and from the glowing reviews of the new 3D touch feature, it seems that the iPhone has managed to escape becoming “good enough”. That is, they have discovered new features that customers truly want, and more importantly, their customers still trust Apple to deliver significantly better experiences with each new release. Of course we are only looking at the launch weekend, when sales are mostly supply constrained, so what we have right now is not a very good indicator of consumer attitude. It still seems very positive though.

Contrast this with the situation on Android where average selling price is falling, and each new Samsung Galaxy S release is getting less attention with each coming year. This is what you would expect from a market that has reached “good enough”, and sure enough, we are seeing Samsung being disrupted by low-end entrants. There is a stark difference here.

So back to Apple. Many pundits were worried that Apple would not be able to deliver a phone that would excite customers over new features, after picking the low-hanging fruit that was larger displays for the iPhone 6/6 plus. This does not seem to be the case. It seems that the innovation engine inside Apple is still running very strong, and that they still have ideas for new features that customers will be eager to upgrade for. That is to say, although pundits may declare smartphones to be “good enough”, Apple has stuff in the labs that will raise the bar when introduced. As long as these features keep rolling out and capturing the imaginations of consumers, “good enough” won’t come to the iPhone.

This also means that if Samsung (or any other Android OEM that aims to sell phones profitably) successfully copies the iPhone’s new features, then they will too manage to escape the “good enough” trap. That is the challenge though. Without controlling the software, Samsung will have difficulty getting traction with something like 3D touch.







  1. 原案が非常にダサい: これはインターネットを見ても、多くの人が感じているようだ。私は最初にエンブレムを見たときも非常に違和感があり、このエンブレムはオリンピックには向いていないと感じていた。オリンピックにはふさわしくはないものの、デザインそのものとしてのまとまり、完成度、重厚さは優れていると認めていた。しかし原案は完成度、重厚さすらない。バランスに欠け、色合いもただただ軽率な感じで、何よりも安直な感じが強い。これが審査を勝ち抜くのは、到底考えにくい。
  2. 赤い丸が下にあることの違和感: 最終案ではこの赤い丸は鼓動する心臓を表していると佐野氏は解説していたが、同時に日の丸を意識しているのは誰の目にも明らかであった。国旗である日の丸を一番下、地面に配置するのか?日が昇るというイメージではなく、日が沈むというイメージにするのか?「日」「太陽」のイメージとして、それはさすがに理解に苦しむ。
  3. 以前のコンセプトとの不一致: 以前の佐野氏の解説では、真ん中に大きな丸を意識していた点、さらにDidot, Bodoniのフォントの中に日の丸をイメージした点などを述べている。しかし原案を見ると、円形になっているのは赤い丸だけであり、それ以外には曲線は一切なくなっている。佐野氏が解説したコンセプトとは全く合わなくなっている。したがって原案のコンセプトとして全く別のコンセプトが存在していたと考えざるを得ず、修正過程でコンセプトをまるっきり変更したということになる。本当にそんなことをしたのか、強く疑問を持つ。






永井一正さんのコメントを考える:東京オリンピック2020 ロゴ問題







  1. 問題が表面化してから20日以上経ったタイミングで初めてデザインの変遷に言及したこと。本来であればこれは8月5日の記者会見で言及があってもおかしくないし、私も、大阪芸術大学の純丘曜彰教授も、そしてベルギーの劇場のデザインを手がけたOlivier Debie氏自身もここを突いている。これだけの間、審査員に口止めをしていたという事実だけははっきりしている。その裏には、何か疑わしい事情があったのではないかと想像してしまう。
  2. 「個人的には、応募されたほかの案や審査の過程も公表した方がいいと思う」と永井氏はコメントしているが、この含みのある表現が気になる。大会組織委員会が記者会見を開くのではなく、永井氏が朝日新聞の単独インタビューに応じる形でこの情報が出てきているのも疑わしい。大会組織員会が本気で審査過程を公開するつもりなのか、それとも時間稼ぎをしようとしているのか。どちらかという後者のように見える。




Google Now And The Priorities At Google

Mark Bergen (@mhbergen) wrote an interesting story on Google on how most of the original Google Now team has left the company, mainly due to a lack of prioritisation.

Although we need further reports to confirm this and to get a picture of what the consequences may be, I found this very interesting because it aligns with some predictions I had made previously.

  1. Predicting Android’s Change Of Direction: Thoughts from Andy Rubin’s Demotion (Apr. 2013, in Japanese)
  2. Who Is To Blame For Samsung’s Bad Fortune? (Nov. 2014)
  3. Android No Longer Competes With iOS (May. 2015)

Mark Bergen’s article in essence says;
1. Google Now was born within Android.
2. Larry Page heavily prioritised it, but then became too busy with moonshots.
3. Sundar Pichai de-prioritised Google Now as an independent intelligent assistant, and moved it from Android to Search.

My argument was that whereas Andy Rubin wanted Android to be the best mobile operating system in and of itself, Larry Page (and consequently Sundar Pichai) thought of it as a gateway to their Search cash cow. Hence priorities are determined based on potential contribution to the Search business, and not on the merits of Android itself. It seems to match Mark Bergen’s discussion, with the exception of heavy support from Larry Page, which I didn’t expect because of how he removed Andy Rubin.

At this point, it is difficult to say whether Google Now should be a priority for Google or not. I suspect that Android is more focused on emerging countries than developed ones, and if so, then de-prioritising Now makes sense. It’s also unclear whether Google Now will really provide good advertising opportunities. Despite theoretically being attractive for ads, I do not know of any mechanism provided by Google for purchasing ad space, and it is possible that it isn’t really very good. Sundar Pichai may be fully aware of the consequences of what he is doing, and that he is convinced that it is better for Google long-term. Google’s multiple projects were always in conflict in one way or another, and it’s possible that Sundar is simply clearing the mess up.

What I do worry about is the fate of Android OEMs. Android, if it is to compete with iOS at all, needs to have features that are unique to it. Tight integration of Google Now seemed to be a great opportunity. Without it, Android will struggle even more in the high-end. As a result, profits for Android OEMs will get even worse.












  1. 中村勇吾: 「すごく基本的な形態の組み合わせのシステムなので世界中探したらどっかに似たアウトプットは必ずあるだろう。これでパクリだと揚げ足取られると今後シンプルな提案は何も出来なくなる」 リンク
  2. 水野祐弁護士: 「著作権法は偶然似たものを侵害とはしない」「『パクり』という言葉を使って煽ってるとしか思えない。発言を拾った報道側のリテラシーの問題では」 リンク
  3. ナガオカ ケンメイ: 「シンプルで力強いデザインはグラフィックに限らず、似てきます。」 リンク
  4. 中村勇吾: 「これでパクリだと挙足取られると今後シンプルな提案は何も出来なくなる。」 リンク







これについては私も言及しているが、やはり大阪芸術大学の純丘曜彰 教授が書いたものが詳しく書いてある。




実際、ベルギーの劇場のロゴをデザインしたOlivier Debie氏はこう語っている

“Sano gave no explanation showing the artistic progression and development of his logo. He only explained how, according to him, the philosophy behind his design was different,”
“Sano’s explanations do not appear to me to be convincing,”




例えばデザインした電子ファイルは上書きせずに、日付などをつけた別のバージョンを毎日保存すれば良い。あるいはMacのTime Machineなどでバックアップしていれば、かなり過去にさかのぼってファイルを復元することが可能である。最近ではDropBoxでも過去のバージョンを復元できるし、プロバージョンであれば無制限に履歴を保存できる。理想的にはSubversionやGitなどのようなバージョン管理ソフトを使えば完璧である。




Evaluating Windows 10’s Launch

About two weeks ago, I mentioned that one could use web usage statistics to monitor the penetration of Windows 10. As Microsoft itself mentioned, Windows 10 had a very successful launch and huge numbers of installations during the first days after launch.

Here I would like to show how web usage of Windows 10 looks after 20 days and how it compares to previous Windows launches.

In the following, I will use data from StatCounter and focus primarily on US data. I do not consider the way StatCounter aggregates global data to be meaningful so I will only look at data per country (I don’t agree with NetMarketShare’s weighting method either).

The following the US StatCounter data for only PCs (excluding tablets, smartphones and consoles). The data goes back to 2008 so we can monitor the launch of Windows 7, as well as Windows 8 and 8.1. Windows 10 does not yet have its own line, but from the CSV data that you can also download, we know that the final uptick in the “other” category at the right end of the graph is almost entirely due to Windows 10, which garnered 5.72% web usage share on August 2015 (to date).

StatCounter os US monthly 200807 201508

We can clearly observe the following;

  1. Windows 7, 8 and 8.1 experienced stable increases in usage share up until the point where a new version of Windows was released. Although there is a slight flattening of the slope, this is to be expected as the number of computers with older versions decrease.
  2. The only event that significantly slows the increase of usage of a certain Windows version, is the release of a newer version. Growth of Windows 7 web usage flattened only when Windows 8 was released, and likewise, Windows 8 growth slowed only after Windows 8.1 was released.
  3. Importantly, there is little evidence that there is an initial burst of upgrades followed by a severe slowing down.
  4. However, the rate of increase in web usage differs significantly between versions. Windows 7 had much better uptake compared to Windows 8. Windows 8.1 improved on Windows 8, but was still not as rapid as Windows 7. This suggests that uptake is positively related to how well the OS is received, and not so much to the sales of PCs in general.
  5. Windows 7 managed to penetrate 50% of PC web usage in August 2012, 3 years after being launched in October 22, 2009. Web usage share in the first month after launch rose to 6.61% maximum.
  6. Windows 10 web usage increase in the first month following launch is phenomenally rapid. It has risen to a maximum of 7.97% in the first 20 days since launch.

There are some questions that arise from this data;

  1. How could Windows 7 achieve 50% penetration in 3 years when the refresh cycle is ~5 years?: It is widely known that most Windows OS upgrades come from customers purchasing new PCs. Most Windows customers do not go out and buy new versions of the OS and install it themselves. The way to understand this is that inside the 1.5 billion PC installed base, there are some PCs that are used frequently and some that are only seldom used. The seldom used PCs do not get upgraded or refreshed but they also do not show up in web usage data. Hence if we look only at the frequently used PCs which do show up in web usage data, the refresh cycle will probably be closer to 3 years than 5 years.
  2. Can we estimate the size of pent-up demand?: Windows 7 managed to reach 50% penetration in 3 years. On the other hand, even after 3 years since Windows 8, the combined web usage share of Windows 8 and 8.1 is only 20%. This suggests that there might be 30% points of pent-up demand.
  3. Can Windows 10 maintain its current rapid adoption rate?: This is the big question that needs to be addressed. At this point everything is highly speculative, but I think the signs are positive. I do not think it is unreasonable to expect 40% web usage within a year (Windows 7 reached almost 25%).

A rapid upgrade towards Windows 10 is a pre-requisite for Microsoft’s strategy of moving towards a universal platform for multiple devices and getting developers on-board. Web usages statistics suggest that this is what we are seeing right now.