Black Friday has come and gone, kicking off the holiday season. As with past years, one of the key trends is that online shopping is booming, once again seeing growth rates around 20%.
However, while giant retailers such as Amazon.com (Nasdaq: AMZN ) will rightfully get much of the attention for this shift, mobile devices also had an outsized impact in shopping this Black Friday. Let's look at Black Friday online sales and take a deeper dive into the iPad's growing influence in online shopping.
The iPad's growing influence
Typically, researchers such as IDC show the iPad commanding no more than two-thirds of the tablet market in any given quarter. In the latest quarter, the iPad's market share of tablet shipments shrank to 50.4%. That drop caused many to wonder whether the iPad was destined for continuing share losses across the next year.
However, an important caveat to any market share statistic with Apple products is that usage of its products tends to far outstrip its market share. For example, while Android has taken a commanding market share in smartphones and thus mobile devices, studies commonly show that iOS accounts for the majority of mobile traffic. Netapplications.com currently has iOS commanding 60% of all mobile traffic.
A Black Friday blowout
There could be a number of ways of looking at this data. However, an obvious conclusion would be the more that you use a device, the more satisfied a user is with it and likely to purchase a later model in the future. Today, IBM (NYSE: IBM ) released yet another piece of evidence that shows just how differentiated the iPad is not only from other tablets, but also from smartphones themselves.
In IBM's 2012 Black Friday Report, we get a clear picture of how mobile is changing consumer behavior. Not only did 24% of consumers visit retailers' sites using a mobile device, but 16% of online sales were also mobile.
Not only that, but the iPad also led the way in dominating fashion in the tablet space. Here's a summary of IBM's findings on tablet and smartphone usage in Black Friday shopping.
Not featured in either of those snazzy graphics is IBM's note that "he iPad generated more traffic than any other tablet or smartphone, reaching nearly 10 percent of online shopping." That means the iPad led to more traffic than the iPhone in spite of a significantly smaller install base.
No tablet competitors in sight
To some extent, that should be expected. The iPad's significantly larger screen lends itself more to surfing the Web and making purchases. This demonstrates a markedly different way of using tablets compared with smartphones.
Not only are shoppers using tablets differently, but they're also just about only using iPads. Despite being at a run-rate of a million sales per month, Google's (Nasdaq: GOOG ) Nexus 7 falls into the "other" category. Despite IDC's report that Samsung had 18% of tablet market share last quarter, its own tablets accounted for 1.8% of tablet traffic. Even the Kindle, which has now been on the market for more than a year, with Amazon once boasting of commanding 22% of U.S. tablet sales, saw only 2.4% of tablet traffic. Instead, the iPad's top competitor in online shopping was Barnes & Noble (NYSE: BKS ) , whose offerings are often seen as an afterthought in the tablet race.
This usage isn't trivial, because it helps answer a central debate in the tablet race: Do ecosystems matter? Will consumers be willing to pay the premium for Apple tablets if many users just want to hop on the Internet? In other words, why pay $130 more for an iPad mini when the Nexus 7 and Kindle Fire sell for far less?
While no silver bullet to the debate, IBM's data shows that consumers are using their iPads in a much different fashion from how consumers use other tablets. Those cheaper tablets are being left in drawers while iPad users rabidly shop, download apps, and surf the Web.
Can the iPad always be this dominant?
The iPad's market share will probably drop in the coming years for a big reason that's dragging on iPhone market share: emerging markets. In those countries, while Apple has found success, keeping market share to developed-market levels is a trick not suited for the company. Many consumers in emerging markets have low levels of income and truly do want just a cheaper window to the Internet. With tablet sales just beginning to take off in those countries, cheap Android models will prove effective in gaining share.
However, today's Black Friday data does show Apple's marked advantage that remains in tablets, especially in developed markets, where build quality and ecosystem matter. With the introduction of a cheaper iPad Mini, the influence of tablets in this year's Black Friday looks only to be a warm-up for larger gains in the year ahead.
How can the iPad Mini change Apple's future?
If you're looking for more advice on Apple and how the iPad Mini changes its future, we've created a special report on the device. It comes free as an added extra to our Apple Premium Report, which will tell you whether Apple remains a buy. I'm prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and, more importantly, your portfolio) going forward. To get instant access to my latest thinking on Apple, simply click here now.