Sales of the Apple iPad have been on a tear, but it hasn't been clear who exactly is buying them. We got part of the answer this week. It's the enterprise.
Last month at the CEA's mid-year trade show in New York, I had an interesting conversation about the Apple iPad with Jeremy Toeman, one of the smartest guys in the tech space. Jeremy and I were talking about the report that Apple had sold three million iPads in the product's first 80 days.
Like most analysts and observers, we were both a surprised at how quickly the iPad was hitting critical mass, but not surprised that people were responding well to the device itself. After all, we'd both traveled to the conference with an iPad in tow. Jeremy brought his iPad in place of a laptop and used it as his primary computing device throughout the trip. I brought my iPad in addition to my laptop and used it during my flight to New York to prepare my notes for the panel that I moderated at the event.
As we talked about the iPad's big sales numbers, I told Jeremy that I was skeptical about whether the brisk sales would continue and turn the iPad into a bigger trend. After all, I said, the sales could all be to tech geeks like us who can't resist trying the latest gadget. The iPad is simply the flashiest gadget any of us have ever seen, but I argued that that doesn't mean that it will be useful to regular people.
Jeremy emphatically disagreed, saying the first million sales were likely to tech geeks but the next wave of sales after that were to others. At the time, neither he or I had many ideas about who those "others" might be, but we were both interested to see how things would shake out when more information surfaced about who was buying iPads.
On Wednesday, we learned where a chunk of those sales are coming from: Large corporations.
Bloomberg reported that Wells Fargo, Mercedes-Benz, and SAP are among the enterprises buying iPads. Forrester analyst Ted Schadler said, "This iPad thing has taken the world by storm. It came in as a consumer product and very quickly the people who actually bought them were business people."
Dan Shey, director for enterprise at ABI Research, said, "A lot of businesses right now are in experimentation with these devices."
Here are the experiments that are happening at the three companies that Bloomberg mentioned.
The luxury automaker started using iPads on showroom floors as an experiment at 40 U.S. dealerships in May. The iPads were used to present and execute the various financing options for customers without having to go sit down in an office. The experiment is going well enough that Mercedes is now looking at deploying iPads to all 350 of its U.S. dealerships.
Wells Fargo quickly recognized the potential of the iPad. The weekend that it was released in April, Wells Fargo noticed that finance executives from some of its largest accounts were using iPads to access corporate accounts. So Wells Fargo decided to experiment with the iPad for its own internal use.
Bloomberg reported that Well Fargo "spent two years studying the iPhone before letting bankers use the device at work. Apple Inc.'s iPad, released in April, took just weeks to get cleared." The company ordered 15 iPads to start, and used two of them to help demonstrate some of its financial products at a conference for investors on May 13-14.
Now the company is ready to deploy more iPads. Wells Fargo senior vice president Megan Minich said, "We've got a bunch ordered."
SAP chairman Hasso Plattner gushed about the iPad at the company's Sapphire conference in May. After the event, Plattner said that 8 of 12 company representatives he met with at the conference were using the iPad. Of course, SAP is not just your normal enterprise but is also the world's largest business software developer, and the company has already released an iPad app so that its customers can access their reports and corporate data with the iPad.
However, the company is also using and supporting iPads internally. Co-CEO Jim Hagermann Snabe uses one. So does Rob Enslin, the North America president at SAP, who says that he now carries an iPad instead of a laptop when he travels. "It's allowed me to almost run a paperless office," said Enslin. He said that he uses the iPad to access business apps, briefing documents, customer information, and other corporate data.
We have to be careful not to take these few examples and extrapolate too broadly about the uptake of the iPad in the enterprise, but it's clear that the iPad is generating some genuine enthusiasm -- and sales -- from some prominent corporate customers. This is certainly a much better reception than the iPhone got when it was first released. There were a few pockets of enterprise interest back then, but it was mostly drowned out by the skepticism of traditional IT and business professionals. Not so with the iPad.
I thought it was interesting that Wells Fargo noted that it took two years to get the iPhone accepted, but only a few weeks to bring in the iPad. In many ways, the iPhone has paved the way for the iPad, both technologically and culturally. I also think that through the iPhone, Apple has learned how to interface with the enterprise more effectively. As i wrote last week, I still don't think Apple is officially cozying up to the enterprise, but the iPhone and iPad have become enterprise products, for better or worse, and Apple is doing what it can to help remove the traditional enterprise obstacles.
Now that that door has swung wide open, some enterprises are ready to walk in. And that explains where some of these iPad sales are coming from.
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