Will the iPad Take Market Share Away From Google?

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January 29, 2010

The buzz of the iPad’s game-changing potential is still going strong … maybe even getting louder. And, Google (GOOG) has been named as the next victim in waiting, based on the idea that applications and mobility are more important than content and search. The former favors Apple’s (AAPL) latest gizmo, and the latter clearly disfavors Google’s strengths.

Before any more chapters are written in the “How the iPad Changed Everything” saga though, investors may want to take a long and realistic look at the basis for the expectations; there are two at the core.

The web is transitioning from a ‘search for it’ offering to an ‘immerse yourself in the experience through applications’ offering.
Tired of Google’s dominance, other search engines and their partners should find a way to unseat the leader

The ideas are sound enough, but the data and reality doesn’t support the thesis. As such, the assumption that Google is doomed may be equally flawed.

Web Two Point What?: Take the whole ‘Web 2.0’ paradigm shift for example - one of the popular buzzwords from two to three years ago. For all intents and purposes, Web 2.0 is here, but the web doesn’t look all that different than it did two to three years ago (with the exception of destroying old-school journalism). Indeed, some marketers may be overestimating just how much of an ‘experience’ web browsers really want.

Yes, online applications are here and growing, but apps are hardly the bulk of web usage… and certainly not the bulk of the web-related revenue. [Never mind the fact that Google offers some of the web’s favorite apps.]

Google Search (Still) Reigns Supreme: As for search, yes, Yahoo! (YHOO) and Microsoft’s (MSFT) Bing are out there. Neither are even close to catching up with Google though, in terms of market share. And though the iPhone does a lot of things (like run applications), most of the time it’s being used for – you guessed it – web searches…. using Google! How can we assume the iPad will yield different results?

Be that as it may, just for the sake of argument let’s say the iPad completely circumvents any Google applications or Google search. With expectations for iPad sales of 4 million units in 2010 and 8 million units in 2011, that’s about 4% of the total smartphone market, or about the same number of e-readers expected to be sold this year. That’s only about 2% of the total annual PC market… none of which are specifically trying to topple Google.

Apple can have their non-Google iPad if they want – it really won’t matter much.

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