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Why publishers ignore the iPad at their peril

Apple’s iPad is redefining the future of computing, says YUDU’s Robert Elding. It’s not just a mobile device, an eReader or a netbook, but provides the capabilities of all three.

By Robert Elding

YUDU has closely tracked iPad adoption since its introduction – and the numbers tell a compelling story. Here, we present the highlights from our iPad trends report (read full report here) that are most relevant to publishers.

1. The iPad is fast becoming the world's most popular mobile device

In the 3 months following its launch in April 2010, Apple sold 3.3 million iPads, making it the fastest consumer device to achieve $1 billion in sales. Morgan Stanley projects sales of 16 million units in the first year. Similarly, Forrester Consumer Technographics found that nearly 10 million consumers say they own or intend to buy an iPad.

iPad sales helped Apple exceed profitability goals for the quarter by 10% – sales represented 14% of Apple’s total income for the period.

2. The iPad is changing the rules of digital publishing

It increases viewing time. Viewing time for Web-based magazines has traditionally hovered at just a few minutes a month. For example, according to ComScore, the average figures for and are 3.8 and 2.1 minutes per month respectively, while the same titles’ iPad app viewing exceeds on average 60 minutes per issue.

It’s helped increase eBook sales. recently announced that eBook sales now outpace sales of printed books. Already the iPad has become the #2 eReader device with 16% market share, after the Kindle (62%) and ahead of the Sony Reader (10%), and 1.5 million eBooks have been downloaded at the App store.

It may hurt revenue models for traditional print publishing. While the iPad’s effect on the publishing industry in the long term remains to be seen, we can draw parallels and conclusions from how the iPod and digital music affected the music industry:

• In 2007, physical sales represented 80%; this figure fell to just 64% in 2010.

• Digital sales increased 80% in those three years

If these trends are replicated in book and magazine publishing, the industry could see as much as $20 billion in annual sales evaporate. There is a silver lining however, because…

3. The iPad creates new revenue opportunities for publishers

The sale of iPad Reader Apps in the App Store. According to research, many iPad Apps are priced higher than their iPhone/iPod versions. The average iPad App costs $4.67 compared to the iPhone’s $3.87.

In-App purchases of iPad editions. Publishers can sell editions within their Apps as single editions or multiple issue subscriptions.

Advertising revenue. As a recent Financial Times blog posting on Wired’s iPad app noted, with all the rich media involved, “even the ads look interesting.” On the iPad, advertisers can expect eCommerce conversion rates 5.5x times higher than that of other mobile devices. Linking products in ads directly to a brand’s eCommerce site could prove highly lucrative for advertisers and so, also publishers.

The confluence of these three trends make for interesting times for publishers – and suggest that those who ignore the iPad as a channel for marketing and distributing content do so at their peril.