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NPD: Expanded distribution of iPad 2 could be Apple's key to success

post #1 of 50
Thread Starter 
Exploring alternative retail partners like Kohl's or Bed Bath & Beyond for the next-generation iPad could give Apple another advantage over its competitors in the booming tablet market.

Stephen Baker, vice president of industry analysis with the NPD Group, wrote about the anticipated launch of the second-generation iPad on his company's official blog on Tuesday. He said he believes distribution and availability of the touchscreen tablet will be an even more important factor than technical specifications for the next-generation device.

"As Apple talks more about small businesses and the iPad opportunity in enterprise it would be great if distribution focus was expanded to include more business-oriented channels like the office stores and the DMRs, such as PC Connection and Insight," he wrote. "Those chains and resellers offer Apple real chances to gain incremental volume versus shoveling a couple more units through carrier stores or adding another Web site.

"Although, even in its consumer focus, Apple's distribution clearly needs to expand into more regional CE outlets and test more alternative distribution opportunities like department and home stores, such as Kohl's or Bed Bath and Beyond."

Though the first-generation iPad was initially only available through Apple, the company gradually expanded its availability as 2010 went on. By the end of last year, the iPad was on sale from a number of partners, including carriers Verizon and AT&T; retailers like Target, Best Buy and Walmart; as well as third-party distributors.

In addition to distribution, Baker said he believes pricing of the next iPad will be a "critical" decision for Apple. This year, a plethora of tablet competitors running a variety of operating systems are set to hit the market and aim to unseat the iPad as the best-selling tablet device.

With tablet competition looming, Baker sees device makers competing for shelf space and an inevitable price war. If the iPad 2 launches with too high a price, Apple could potentially be undercut by a less expensive competitor at some point before the holiday buying season of 2011.

"Since Apple never responds to that type of price activity," he wrote, "the key to iPad 2's announcement will be whether today's price holds or Apple is the first one to shoot off a canon in a tablet price war."

For the moment, the pricing of Apple's iPad remains an advantage over its competition, with the 16GB Wi-Fi-only model starting at $499. Apple executives have said they see the tablet market as an important sector with huge growth potential, and they plan to be aggressive in terms of pricing.
post #2 of 50
Although I would question the help you would get in these stores (kohls, bb&b) it makes sense to have more distribution outlets

The iPad, like the iPod is so well known, it mostly sells itself, and there are few potential customers that don't know enough about it to make a decision to buy.

What is interesting is that right now there are only masculine (ie. best buy) and neutral (ie. target) stores. Adding feminine (ie. bb&b) outlets could certainly help.
post #3 of 50
Quote:
Originally Posted by AppleInsider View Post

"Since Apple never responds to that type of price activity," he wrote, "the key to iPad 2's announcement will be whether today's price holds or Apple is the first one to shoot off a canon in a tablet price war."

That would be cannon*, not a song. Also, my thinking is that they will keep the same pricing for iPad 2 and then decrease the lower models' prices when they introduce iPad 3. Keep the margins now and push the envelope this fall, when the two versions will hit a large amount of the consumer markets.
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post #4 of 50
"such as Kohl's or Bed Bath and Beyond"

And just how would such a store market and position the iPad in their stores. Last time I checked, BB&B doesn't have an electronics department. Not sure if Kohl's does. I know, maybe the iPad can be put on display with the electronic photo frames!

More distributation channels would be great, but I think the ones this analyst suggests would relegate the iPad to "commodity" status. No way Apple does that.

"or Apple is the first one to shoot off a canon in a tablet price war"

I almost laughed out loud when I read this. First, the iPad is already lower priced than the competition. And second, has Apple ever participated in a price war? Much less actually start one?
post #5 of 50
Ok now Apple is starting to freak me out. If they keep going like this the next decade will be all Apple's.

It's almost as if the last two decades of utter brutal competition in the pc market towards apple skinned this company to its most efficient backbone, which is now fighting back.... and kicking ass.

I wonder, who will stop this monster that threatens to dominate the next decade in computing?

Just for this I hail Google, that probably has delayed and diminished the level of domination...
post #6 of 50
Pardon the interuption - I got a question - why is it everytime I get on this website lately there is an ad for XOOM next to the topics???? Can it at least be buried at the bottom or something?!

Sorry, carry on.

Back to topic - if iPad2 looks appealling (eg I feel whimsical) I may just purchase one tomorrow... but not at BB&B type location. Prefered locations are local tech stores Apple store or Best Buy. and if I have to, Radio Shack. Now if Sears had it, ya, that would be ok. But since Apple store is near by... might as well go there. All depends whats around.
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post #7 of 50
Quote:
Originally Posted by Smiles77 View Post

That would be cannon*, not a song. Also, my thinking is that they will keep the same pricing for iPad 2 and then decrease the lower models' prices when they introduce iPad 3. Keep the margins now and push the envelope this fall, when the two versions will hit a large amount of the consumer markets.

There is no evidence that there will be an iPad 3 this fall though, yet there is concrete evidence that the original iPad model has been discontinued.

I'm not saying it won't happen, just that this analogy is built around the idea that iPad will be sold like the iPhone where they have two models on sale most of the time, and have "last years model" being sold at a discount. So far we have no evidence that this is going to be the case at all, and the discontinuation of production on the original model suggests the exact opposite.
post #8 of 50
[/QUOTE]

Though the first-generation iPad was initially only available through Apple, the company gradually expanded its availability as 2010 went on. By the end of last year, the iPad was on sale from a number of partners, including carriers Verizon and AT&T; retailers like Target, Best Buy and Walmart; as well as third-party distributors.

[/QUOTE]
Just to clarify Best Buy had Ipad 1 during the first week of the launch; limited quantities.
post #9 of 50
Really? Maybe next to the "As Seen On TV!" products like the device that trims your pet's claws? Sounds like a great idea for the Apple brand. Not desperate at all.

This reminds me of the irrelevant, out of left field, nonsense that John Dvorak pumps out every so often. My favorite was the post from a few years back where he sternly cautioned apple to abandon their rumored plans for an iPhone before it was too late to prevent a humiliating fiasco.
post #10 of 50
Quote:
Originally Posted by bcahill009 View Post

I would question the help you would get in these stores (kohls, bb&b)

That's what's stunning about this idea. Apple believes they have created a highly sophisticated computer whose operation is so self-evident that it requires no more hand-holding or indoctrination than - a bath towel.

Who knows, they may be right.


Quote:
Originally Posted by Wiggin View Post

has Apple ever participated in a price war? Much less actually start one?

In their entire history, they've never been so well-positioned for a price war. They know they can sell millions of tablets. Their competition is not so sure. So Apple can commit to huge purchases, then undercut their competition on price and yet STILL make money. "Better AND cheaper" is a pretty lethal combo.
post #11 of 50
Quote:
Originally Posted by AppleInsider View Post

With tablet competition looming, Baker sees device makers competing for shelf space and an inevitable price war. If the iPad 2 launches with too high a price, Apple could potentially be undercut by a less expensive competitor at some point before the holiday buying season of 2011.

When has Apple's channel strategy ever been about being the price leader? It just so happens that when Apple introduced the device, they had the lowest price... which is unsurprising, since it was the only device in its class in mass market distribution at the time. It's easy to be the price leader when you are the only seller.

The assumptions here are wrong. If applied to Dell or HP the analysis might make some sense... but this is not Apple's strategy and never has been.
post #12 of 50
Quote:
Originally Posted by AppleInsider View Post

Stephen Baker, vice president of industry analysis with the NPD Group . . .

Move along.
This guy's an idiot who is babbling about things he doesn't understand. He's acting as if iPads are comoditised chochkies. Next thing you know he'll suggest they offer iPods with Happy Meals.
post #13 of 50
Hell NO!

Apple is not that desperate. iPad does not belong in such a place. Office Depot & Office Max, may be. Not Khols or Bed & Bath.

Hello? This is a computer product. With an Apple Logo. This guy must be out of his mind. It sounds like what that shit-head did to Apple when Steve was away.

HELL NO!
post #14 of 50
Quote:
Originally Posted by OC4Theo View Post

Apple is not that desperate. iPad does not belong in such a place. Office Depot & Office Max, may be. Not Khols or Bed & Bath.

I don't understand the objection. Do you think Apple would sell fewer iPads, in total, if they offered them at BB&B? Or do you think it would be so damaging to the brand that people who would otherwise have bought one will refrain just because they know it's available there?

I don't see any argument for narrowing distribution. It may be that it doesn't work, and sales are low-to-nothing, but I don't see the harm in trying.
post #15 of 50
Quote:
Originally Posted by DESuserIGN View Post

Move along.
This guy's an idiot who is babbling about things he doesn't understand. He's acting as if iPads are comoditised chochkies. Next thing you know he'll suggest they offer iPods with Happy Meals.

Spot on.

Move along, folks..... it's just analysts running rampant.
post #16 of 50
Reading this made me squeek with joy, not only as an AAPL holder but as an iPad 2 very early adopter (no matter what the price, I'm ordering tomorrow since my other apple products are on their last legs). This thing is going to be at least $100 cheaper, that's me calling my shot.
post #17 of 50
Quote:
Originally Posted by bcahill009 View Post

Although I would question the help you would get in these stores (kohls, bb&b) it makes sense to have more distribution outlets

The iPad, like the iPod is so well known, it mostly sells itself, and there are few potential customers that don't know enough about it to make a decision to buy.

What is interesting is that right now there are only masculine (ie. best buy) and neutral (ie. target) stores. Adding feminine (ie. bb&b) outlets could certainly help.

I can easily imagine an iPad as a casual display element in a store window or an in-store arrangement of furniture. It is almost pure eye-candy.
post #18 of 50
Quote:
Originally Posted by LuisDias View Post

Ok now Apple is starting to freak me out. If they keep going like this the next decade will be all Apple's.

It's almost as if the last two decades of utter brutal competition in the pc market towards apple skinned this company to its most efficient backbone, which is now fighting back.... and kicking ass.

I wonder, who will stop this monster that threatens to dominate the next decade in computing?

Just for this I hail Google, that probably has delayed and diminished the level of domination...

I am not sure what you mean by "kicking ass". In the past year Apple has gone from the #2 most prolific smartphone in the world to #4. In that same year Android phones have gone from almost non-existent to number one. Apple presently has about 3-4% of the PC market, and a large but rapidly dwindling market in media players. The only market in which they are still doing well is the, only one year old, tablet market, in which they have existed with essentially zero competition until a few days ago (Xoom). In the coming months Apple will lose more market share in smartphones, lose most of their market share in tablets, lose more and more Ipod users (since any smartphone today does everything that the Ipod does), and lose a substantial portion of the laptop market. I would hardly call that kicking ass.
post #19 of 50
Quote:
Originally Posted by captbilly View Post

I am not sure what you mean by "kicking ass". In the past year Apple has gone from the #2 most prolific smartphone in the world to #4. In that same year Android phones have gone from almost non-existent to number one. Apple presently has about 3-4% of the PC market, and a large but rapidly dwindling market in media players. The only market in which they are still doing well is the, only one year old, tablet market, in which they have existed with essentially zero competition until a few days ago (Xoom). In the coming months Apple will lose more market share in smartphones, lose most of their market share in tablets, lose more and more Ipod users (since any smartphone today does everything that the Ipod does), and lose a substantial portion of the laptop market. I would hardly call that kicking ass.

When they continue to sell more and more devices while maintaing the best margins by far in the industy market share has very little meaing. The numbers can be favored either way, but in business revenue and profit mean more then market share.
post #20 of 50
The iPad is already a success, there's no need for any advice from any analyst.
post #21 of 50
Quote:
Originally Posted by Alladdinn View Post

I can easily imagine an iPad as a casual display element in a store window or an in-store arrangement of furniture. It is almost pure eye-candy.

Yesterday I saw the best iPad advertisement. Most of it was an iPad running an app showing features of a car (Kia, I think). then the narration said,

"It's not an app, it's our user guide" and showed a hand putting the iPad in the glove compartment.

(at least that's my memory).

Point: You'll see iPads in lots of places. Good for them; good for us.
post #22 of 50
They should sell the iPad at Victoria's Secret stores.

post #23 of 50
Quote:
Originally Posted by Wiggin View Post

"such as Kohl's or Bed Bath and Beyond"

And just how would such a store market and position the iPad in their stores. Last time I checked, BB&B doesn't have an electronics department. Not sure if Kohl's does. I know, maybe the iPad can be put on display with the electronic photo frames!

More distributation channels would be great, but I think the ones this analyst suggests would relegate the iPad to "commodity" status. No way Apple does that.

"or Apple is the first one to shoot off a canon in a tablet price war"

I almost laughed out loud when I read this. First, the iPad is already lower priced than the competition. And second, has Apple ever participated in a price war? Much less actually start one?

Exactly. I think Mr Baker was desperate to fill his blog quota this week. Bed, Bath & Beyond? LOL.

"Let me pick up some sheets, and a trash can, and oh yeah - an iPad!"

Next, Apple can sell iPads at the counter at 7-Eleven. Hanging up next to the breath mints. Pick one up when you stop in for a Slurpee.
post #24 of 50
Quote:
Originally Posted by anantksundaram View Post

Spot on.

Move along, folks..... it's just analysts running rampant.

I 'third' the motion. Analyst's diarrhea of the mouth.

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post #25 of 50
Quote:
Originally Posted by captbilly View Post

I am not sure what you mean by "kicking ass". In the past year Apple has gone from the #2 most prolific smartphone in the world to #4.

Funny, I haven't seen a single smartphone made by "Android." All I see are Motorola, HTC, Samsung, etc. And yet you say this Android makes more phones than any of them? Because I know Apple outsells those three, at least.

Quote:
Apple presently has about 3-4% of the PC market,

More factually challenged data. See http://www.macrumors.com/2011/01/13/...u-s-pc-market/

Quote:
The only market in which they are still doing well is the, only one year old, tablet market, in which they have existed with essentially zero competition until a few days ago (Xoom).

Other than the PC market, where they've doubled their market share in four years, you mean, right?

And the reason they've "existed" in the tablet market without competition is because they created the market. It's not like there was a market sitting there with no products and Apple lucked out.

Quote:
In the coming months Apple will lose more market share in smartphones, lose most of their market share in tablets, lose more and more Ipod users (since any smartphone today does everything that the Ipod does), and lose a substantial portion of the laptop market. I would hardly call that kicking ass.

You do realize that market share is meaningless, right? Companies and shareholders care about profits. Apple could have a 100% market share in phones if they gave iPhones away for free, or paid users to use them. It wouldn't be smart business, but it would meet your criteria for success, apparently.

Apple makes the lion's share of profits in smartphones ( http://www.asymco.com/2011/01/31/fou...stry-overview/ ). The same will likely be true in tablets, once competitors actually ship. Apple's margins are far higher than industry average in PC's as well, while market share grows.

For corporate performance, revenue has more than doubled in the past two years, from ~$10B/quarter to ~$25B/quarter ( http://www.businessinsider.com/chart...d-sales-2011-1 )

And you wouldn't call that kicking ass?
post #26 of 50
I predict (tomorrow will tell) that Apple will follow its traditional formula for holding the line on an already good price point, and will just offer more machine for the price. It may be that they upgrade the gigs of storage on their new bottom end machine, and provide the newer, faster more feature rich machine at the same price points.

Then they can blow out the old 1st generation stock through the Apple store as "refurbs." at their 12-20% discount. It's a good formula. Everybody gets a deal, and they don't pollute the current retail stream with 1st gen stock.

They do this over and over and over. And it works.
post #27 of 50
Quote:
Originally Posted by captbilly View Post

I am not sure what you mean by "kicking ass". In the past year Apple has gone from the #2 most prolific smartphone in the world to #4. In that same year Android phones have gone from almost non-existent to number one. Apple presently has about 3-4% of the PC market, and a large but rapidly dwindling market in media players. The only market in which they are still doing well is the, only one year old, tablet market, in which they have existed with essentially zero competition until a few days ago (Xoom). In the coming months Apple will lose more market share in smartphones, lose most of their market share in tablets, lose more and more Ipod users (since any smartphone today does everything that the Ipod does), and lose a substantial portion of the laptop market. I would hardly call that kicking ass.

I've never seen so much stupidity in one post, amazing. Apple has been improving substantially by pretty much every single metric out there, year after year, with such ridiculous success, that it's impossible to even find a comparison with any other company in existence. Sales of their iOS devices are massive, they literally OWN the mobile app market (something like 95% of downloads), one of the most lucrative and important markets right now, they own the mp3 player market, the tablet market, and are making enormous gains with their notebooks and desktops, selling more than they ever have in their history- and this is only bound to go up as OSX/iOS become integrated and the halo effect takes place. Most importantly, they have enormous mindshare, and the best product customer satisfaction in the industry, by far. One doesn't even need to like Apple, to objectively acknowledge the above. Your arguments are specious and hilarious.


Also, I' viewed your 9 pther posts here, not a single one has anything positive to say about Apple, it's either all bitching, sarcasm, or mocking the company/products. Pretty pathetic trolling.
post #28 of 50
Quote:
Originally Posted by AppleInsider View Post

"Although, even in its consumer focus, Apple's distribution clearly needs to expand into more regional CE outlets and test more alternative distribution opportunities like department and home stores, such as Kohl's or Bed Bath and Beyond."

No it doesn't. Only an analyst with no real clue would make a statement like that

Quote:

With tablet competition looming, Baker sees device makers competing for shelf space and an inevitable price war. If the iPad 2 launches with too high a price, Apple could potentially be undercut by a less expensive competitor at some point before the holiday buying season of 2011.

yeah cause the high price of everything else Apple has been an issue.

Fact is, folks will pay more for a name. You could take two of the exact same car, label on Toyota and one Lexus and no one will flinch at the Lexus being 3 times the price.

Quote:

For the moment, the pricing of Apple's iPad remains an advantage over its competition,

Well I think the bigger advantage is that half the rest of the competition can't seem to get anything actually to market. And what is out there sucks or is priced too high or tied to contracts no one wants to get into.

And it is likely to stay that way for a while. Apple could probably raise their prices and still outsell everyone else. Or even just drop the wifi only models (maybe keep the bottom one for the kiddies etc and drop the other two) and outsell the rest. Not only because it is a good tablet but because it is Apple. And Apple is for the cool kids.


Quote:
Originally Posted by Mister Snitch View Post

That's what's stunning about this idea. Apple believes they have created a highly sophisticated computer whose operation is so self-evident that it requires no more hand-holding or indoctrination than - a bath towel.

No, Apple does not believe that. They are not the ones that said such things. This is some yahoo analyst that knows nothing making statements about things he shouldn't.
post #29 of 50
Quote:
Originally Posted by msimpson View Post

Next, Apple can sell iPads at the counter at 7-Eleven. Hanging up next to the breath mints. Pick one up when you stop in for a Slurpee.

They'd be behind the counter, between the smokes and condoms.

Seriously, short of selling door-to-door, how many more outlets does Apple really need? People who want iPads know where to get them.
post #30 of 50
Quote:
Originally Posted by cvaldes1831 View Post

They should sell the iPad at Victoria's Secret stores.


Now there's a thought. Just think of the demo videos they could load onto the store display models.

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post #31 of 50
Quote:
Originally Posted by sippincider View Post

Seriously, short of selling door-to-door, how many more outlets does Apple really need? People who want iPads know where to get them.

The implication is that Apple should push to make them more impulse buys and to send the message that these aren't computers so much as lifestyle accessories. Sure, everyone knows where to get one if they want to go get one. The analyst, agree or not, is saying that making people run across them *everywhere* would increase sales.
post #32 of 50
Quote:
Originally Posted by captbilly View Post

I am not sure what you mean by "kicking ass". In the past year Apple has gone from the #2 most prolific smartphone in the world to #4. In that same year Android phones have gone from almost non-existent to number one.

I didn't realize Android sold phones, or Google. Or that they made any money off Android. You truly have some secret info.

Or...

I think you will find that Motorola, Samsung, LG, Htc and Sony sell phones and none of them sold more units than Apple in the smartphone market.

Posting your personal fantasy universe for all to see doesn't make it more real dude.
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post #33 of 50
Quote:
Originally Posted by Kibitzer View Post

Now there's a thought. Just think of the demo videos they could load onto the store display models.

Almost enough to make a guy want to go shopping with his lady.
post #34 of 50
quote: Expanded distribution *could be* key to success. Sure is a safe statement. Then again, maybe something else could be. Definitely probably could be.
post #35 of 50
Quote:
Originally Posted by kube View Post

Yesterday I saw the best iPad advertisement. Most of it was an iPad running an app showing features of a car (Kia, I think)..

I was going to ask for a link but then I asked Google and sure enough bam.

http://www.youtube.com/watch?v=AJO8yaFmNfM

Cool ad.
post #36 of 50
Quote:
Originally Posted by kube View Post

Yesterday I saw the best iPad advertisement. Most of it was an iPad running an app showing features of a car (Kia, I think). then the narration said,

"It's not an app, it's our user guide" and showed a hand putting the iPad in the glove compartment.

(at least that's my memory).

It was Hyundai: http://www.gottabemobile.com/2011/02...rs-commercial/

For the snotty types, there Mercedes-Benz too: http://www.tuaw.com/2010/10/05/merce...ands-globally/

That's just for starters...
post #37 of 50
Quote:
Originally Posted by ddawson100 View Post

quote: Expanded distribution *could be* key to success. Sure is a safe statement. Then again, maybe something else could be. Definitely probably could be.

post #38 of 50
Quote:
Originally Posted by OC4Theo View Post

Hell NO!

Apple is not that desperate. iPad does not belong in such a place. Office Depot & Office Max, may be. Not Khols or Bed & Bath.

Hello? This is a computer product. With an Apple Logo. This guy must be out of his mind. It sounds like what that shit-head did to Apple when Steve was away.

HELL NO!

I had a slight visceral reaction to this but quite frankly if I can buy an iPod Touch in a vending machine at the airport, I can buy an iPad at a homegoods store or a department store.
Let's get over the Apple snob factor - we only play into the stereotypes that all the fandroids and wintards constantly replay.
post #39 of 50
Curious how much AI got from Motorola and Verizon to have the two big, red ads for the Verizon/Motorola Xoom at the top of the main page with no rotation?
post #40 of 50
Quote:
Originally Posted by captbilly View Post

I am not sure what you mean by "kicking ass". In the past year Apple has gone from the #2 most prolific smartphone in the world to #4. In that same year Android phones have gone from almost non-existent to number one. Apple presently has about 3-4% of the PC market, and a large but rapidly dwindling market in media players. The only market in which they are still doing well is the, only one year old, tablet market, in which they have existed with essentially zero competition until a few days ago (Xoom). In the coming months Apple will lose more market share in smartphones, lose most of their market share in tablets, lose more and more Ipod users (since any smartphone today does everything that the Ipod does), and lose a substantial portion of the laptop market. I would hardly call that kicking ass.

Oh, he probably meant kicking ass like this:



Apple is making as much profit in the smartphone market as every other vendor combined. A few Android OS licensees, notably HTC, have managed to eke out a bit of a profit on their commodity handsets, but even that is soon to be swamped out by even cheaper Chinese carrier branded phones. Android will be the OS that comes on the phone you didn't want to have to pay for.

And don't expect tablets to follow the same path-- carrier subsidies and aggressive push have moved Android handsets, but tablets have to compete on their own merits, as consumer electronics. Not that many people are going to be interested in another monthly data charge for a subsidized tablet, and we've seen that Motorola, Samsung et al are having trouble competing with Apple on a straight up retail basis.

And most everyone I know with an Android phone was just getting another phone because it was time and that's what was available. They're happy to have a browser and email. A tablet actually has to function as a computer, at which point Apple's ecosystem and deep app catalogue start to be much more attractive.
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