Yankee Group Blog » Blog Archive » Apple’s new record: the fastest product ramp to $1 billion

Apple’s new record: the fastest product ramp to $1 billion

by Carl Howe
May 5, 2010

Update: i’ve corrected the post to recognize only the time since pre-orders on March 12.

I brought my 3G iPad to last night’s panel discussion at the TiE Boston panel, “The Google Effect”, and it attracted the usual crowd of admirers. That kicked off an active discussion of the similarities and contrasts between Apple and Google, and during that I threw out some of my favorite statistics about these two high-tech Golliaths.

My favorite stats to cite about Google that I trotted out last night are largely about how quickly it has come to dominate our Anywhere lives. As a just over ten-year-old company, Google can boast:

One of the fastest growths to $1 billion in revenue.
The fastest growth to a more than $1 billion market valuation
The second tech company since Xerox to become a verb (TiVO is the other one).

Now Apple is a much older company, having just celebrated its 34th birthday on April 1. However, its latest product, the iPad, will give it a record that Google isn’t about to replicate. Apple announced on Monday that it has sold more than 1 million iPads since it started taking pre-orders on March 12. I’m counting since March 12 only because pre-orders are included; the reality is the most of those sales and deliveries have been in the last 30 days. Assuming that rate continues in May (and because even Apple Stores keep running out of stock that seems likely), we’ll see Apple having sold about 1.5 million units by the end of May. Average sales prices seem to be in the $645 range (16 GByte WiFi and 64GByte 3G units seem to be the top sellers). Do the math, and we discover a quite remarkable number: Apple’s iPad will likely take the crown for the fastest consumer product growth to the $1 billion revenue mark in history, taking less than 80 days from the beginning of pre-orders to reach that milestone.

Now while I’ve been claiming since the announcement that Apple was going to sell millions of iPads in 2010, but many pundits such as Wired.com, Fortune, and, others got a lot of ink after the iPad announcement claiming that the iPad would fail. The complaint, roughly summarized, was that smartphones, notebooks, and netbooks left no market niche for an “in-between” device to establish a foothold. This month, Apple will have one billion reasons why these predictions were wrong, and will have done it in record time to boot.

Filed under: Access Devices | Comments (80)

80 Responses to “Apple’s new record: the fastest product ramp to $1 billion”

Kiki's friend
May 5th, 2010 - 8:37 pm

If you are right with the $1 billion record may I point out that number would be achieved before the official very limited international launch of the iPad (of just a few countries). Thanks Carl.

ToddA
May 6th, 2010 - 10:07 am

I would add one company to your list of companies-that-became-verbs, Kodak. It was, arguably, an early tech firm. For decades, Kodak was at the cutting edge of imaging technology and held, or still holds, many of the core patents in digital imaging.

Back when film was king, Kodak fought a constant battle to protect their trademarked name from the ubiquitous use of it as a verb.

Ronin
May 6th, 2010 - 10:15 am

Please do some very basic research before you write.

Apple pre-orders for iPads in the US started on March 12, 2010, NOT as you incorrectly imply on Jan 27 when the iPad was announced.

frazman
May 6th, 2010 - 10:20 am

While Apple did announce the iPad on January 27th, it was not available for pre-order until March 12th–making it an even faster sprint to $1 billion, right?

Constable Odo
May 6th, 2010 - 10:20 am

Those idiots that claimed the iPad would fail before it even came to market are just plain stupid to even try and project such a thing. They should have realized that Apple can sell products to loyal Apple consumers without even trying. That’s just brand loyalty at its finest. Those pundits could have just said, “We’ll wait and see how consumers take to the product” instead of trying to show how smart/stupid they were.

There are so many people that had said they’d have no use for the iPad until they actually held it in their hands and used it. Geeks instantly hated the iPad merely because it lacked certain specs or hardware. Can you believe that sort of narrow-mindedness. Fact in point, average consumers may not have a clue about technical stuff, but they know what they like.

Kudos to Apple for showing Microsoft what consumers actually like instead of forcing some geeks idea of a perfect computer down consumers’ throats. Proving a “toy” can be just as useful as a “real” computer. Whatever the hell that’s supposed to mean being said by the idiot geeks. Something like calling a pencil and paper pad as not being “useful enough.” Consumers need products that are easy to use to get simple tasks accomplished. Apple figured it out and currently owns the tablet market. The iPad a failure? Those pundits should check their own brains for failure.

RattyUK
May 6th, 2010 - 10:41 am

Might be different in the States but in the UK Hoover is a verb.

Dave Caolo - Gloating Pt. III
May 6th, 2010 - 10:46 am

[...] Carl Howe: “Apple’s iPad will likely take the crown for the fastest consumer product growth to the $1 billion revenue mark in history.” [...]

Analyst predicts iPad will be fastest product to $1 billion sales, ever
May 6th, 2010 - 11:00 am

[...] Carl Howe, for Yankee Group: “Apple announced on Monday that it has sold more than 1 million iPads since its announcement on January 27. I’m counting since January 27 only because pre-orders are included; the reality is the most of those sales and deliveries have been in the last 30 days. Assuming that rate continues in May (and because even Apple Stores keep running out of stock that seems likely), we’ll see Apple having sold about 1.5 million units by the end of May. Average sales prices seem to be in the $645 range (16 GByte WiFi and 64GByte 3G units seem to be the top sellers). Do the math, and we discover a quite remarkable number: Apple’s iPad will likely take the crown for the fastest consumer product growth to the $1 billion revenue mark in history, taking less than 120 days from announcement to reach that milestone.” [My emphasis] [...]

Elise
May 6th, 2010 - 11:06 am

Goliath… one L

Blad_Rnr
May 6th, 2010 - 11:24 am

Carl,
I have missed your insights since you went to Yankee Group.

You’re spot on again, as usual. This is huge for Apple and I believe a game changer. You wrote about touch technology coming to the Mac a few years ago, what we all thought Leopard would be. Now we see it, albeit in a different form factor, but one that makes more sense.

I truly believe this is the same scenario as the original Mac was to DOS. But this time Apple will play their cards right and won’t give away the store to MSFT. Jobs is smart, and he has a winning strategy. I believe touch is the future, and the iPad is the logical evolution of the PC. Anyone who thinks not and has a stake in this game will be sitting on the sidelines for years to come. In fact, I predict by the end of the year, Apple has a larger market cap than MSFT.

Cheers.

DAK
May 6th, 2010 - 11:28 am

Regarding your statement:

“I’m counting since January 27 only because pre-orders are included;”

Good that you’re including the time for pre-orders, but pre-orders were not possible until April 3. So that’s probably when you should start counting.

Tina
May 6th, 2010 - 11:37 am

I’m sure this will be pointed out by others but, the presale didn’t begin until March 12th. Making the iPads feat even more impressive.

Peter
May 6th, 2010 - 12:12 pm

Carl, thanks for a great comment about Apple. Now that $1B is in sight, even without an international launch, when will we see $2B? How quickly did Google reach that mark and how much quicker will the iPad blow that mark away? The iPad is an in-between product, much easier to read than a phone and enough for many uses that don’t require a laptop/desktop.

Predrag
May 6th, 2010 - 12:22 pm

I would suggest that the most accurate time period would be from 12 March, because that is when Apple begun taking pre-orders for the device. Actual deliveries started in April though.

philos
May 6th, 2010 - 12:45 pm

OOOh, this is going to give the Apple haters fits. It is just the kind of thing about the ol’ “walled garden” that drives techies up a wall, but one that does not surround a garden.

ipho
May 6th, 2010 - 12:52 pm

How about iPhone 3G or 3GS? They sold these two 1M in just 3 days. If you add another 10 days for another million.

So iPhone 3G/iPhone 3GS sold 2M units in the first 13 days at $600 ASP which means $1.2 billion in 13 days.

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[...] How Apple put the user first to make a billion dollars fast {Computerworld Blogs} 06 May Within a month of the iPad hitting the shelves, Apple’s already sold a million to make a billion, the fastest product ramp in history according to Yankee Group analyst, Carl Howe [...]

stencil
May 6th, 2010 - 1:50 pm

Shouldn’t surprise anyone that there are enough Apple fan-boys, early adopters, nouveau riche, hipsters, and celebrities to scoop up a million or so iPads in the first few weeks. Still stands to be seen if the trend continues. I think you’ll start seeing a lot of used iPads on Craigslist and E-bay in a few months, as the novelty wears off and its limitations become more clear.

Jim Landy
May 6th, 2010 - 2:08 pm

It’s nice to see a tech company lead the pack and force other manufacturers to better serve our needs.

If it wasn’t for Apple we would still be typing; dir/

Dave
May 6th, 2010 - 2:54 pm

A pre order does not constitute a sale. I think you should start counting at the point that the iPad went on sale.

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AffiliateSEOPro
May 6th, 2010 - 11:57 pm

This doesn’t surprise me at all. When it comes to new Apple product launches, the naysayers are usually wrong. Im running into lots of people who are buying their first Macbook Pro, Mac desktop, iPOD etc.

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Tom Ross
May 8th, 2010 - 12:12 pm

I don’t know if a lot of research went into this claim. Video game consoles come to mind as one product category with huge launch volumes.

The Nintendo Wii was launched in mid November 2006, at $249. 3.19 million units were shipped by the end of that year, another 2.65 million in the first quarter of 2007.

Assuming Nintendo needed to sell 4 million to make $1 billion in revenue, they probably crossed that line by the end of January 2007, about 70 days after launch.

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