Apple’s earnings announcement highlights the shift in the computing and internet application platform from PCs to smartphones and tablets.
Apple shipped 4 million Macs, 48 million iPhones, and 23 million iPads. That means Apple shipped nearly 6 times as many iPads and 12 times as many iPhones as it did Macs. Tim Cook referred to the inevitability of this platform shift during the earnings call in response to iPads eating into iMac shipments.
"I see cannibalization as a huge opportunity for us. Our philosophy is to never fear cannibalization, if we don't do it someone else will," Cook said during the earnings call.
The time people spend on smartphones and tablets is shifting, too, at the expense of legacy web browsing, while television viewing is holding steady. The only reason television viewing is maintaining its share of viewer attention is that viewers are simultaneously using a second mobile device while viewing television. If consumers had to choose, television viewing would likely decrease.
2013 will beat all records for mobile growth as small and large companies from every industry adopt mobile-first strategies to build their brands with mobile apps as a top priority and with web, PC, and other media taking a back seat.
In the U.S., Facebook and Google have an early lead on acquiring viewer attention as eyeballs turn from TV screens and fingers are withdrawn from PC keyboards. Google Maps and Facebook have been in competition for the lead Google lost when Google Maps was dropped from iOS 6. While Facebook leads, Google occupies five of the top 10 apps ranked by unique visits.
It’s not game over for either competition or innovation. Facebook and Google’s leads can’t be projected into their domination of the future. These two leading firms, which have some of the smartest designers and developers, only have 33% of the attention of users measured in time spent immersed in their apps. Facebook and Google will maintain their positions as the market grows, but at this point in time more than 64% of viewers’ time is finely minced into market share holdings of less than 1%. There is at least one more Google or Facebook yet to emerge from this 64% with a disruptive app.
Now that the post-PC era has arrived it is on one hand exhilarating in its breath-taking growth and on the other discomforting because of its infinitely fine fragmentation and seemingly insurmountable challenges to measure and predict its development. Tablets are shipping at an accelerating rate with 22.9 million iPads reported shipped last quarter, yet 4 out of 5 mobile internet minutes are attributed to smartphones, according to Comscore. This obscures the separate use cases of lean-forward smartphones and lean-back tablets. Most measurements don’t differentiate between smartphones and tablets, but the two are unrelated except for the design and manufacturing technologies that made tablets possible because the use cases are entirely different. For instance, streaming video subscriber growth due to tablets was identified as a significant contributor to Netflix’s blowout earnings announcement yesterday.
There will be much more disruption as large and small companies invest in mobile-first development and entirely new category leaders will emerge from the app fragmentation and tablets will become a separately identified category based on use cases.