Retailers Size Up the iPad
For CE retailers, the consolidation of multiple devices into one content-flexible device will pose a significant challenge because, Manlove says, “you’re really consolidating dollars down into one device that more than likely is going to have a lot lower margins.”
Manlove was shocked at iPad price points but expects the device will be a $20 billion business for Apple, equivalent to roughly 40 percent of the manufacturer’s existing revenue. He believes the iPad accessory business “will be as big or bigger than the hardware side,” with “cottage industries” springing up, especially among application developers.
Merchants are waiting to pounce on the opportunity. On the day of Apple’s mid-day announcement Ahron Schachter, director of new product placement/merchandise at Adorama Camera in New York City, was nothing less than giddy with excitement. He expected the much-rumored Apple tablet to be “the Swiss Army Knife of technology” — a “glorified iPhone” packaging camera, 3G, computing and eReader capabilities into one sleek, intuitive Apple design.