One million iPad sales later, Apple has the last laugh

Four weeks after the U.S. retail release of Apple's iPad, it's clear the company has another hit on its hands. On Monday Apple announced sales of the tablet have already surpassed the 1 million benchmark--by comparison, the company needed 74 days to sell the first million iPhone units. Consumers have downloaded more than 12 million iPad applications from Apple's App Store, as well as over 1.5 million ebook titles from the new iBookstore. Apple notes that developers have now created over 5,000 new applications expressly for the iPad--the device also runs almost all of the App Store's 200,000-plus applications for the iPhone and iPod touch.

Not bad for a device that many skeptics initially greeted as the biggest folly since the Esdel first rolled off the Ford assembly line in late 1957. For all of the early criticisms and complaints--no support for Adobe Flash, no camera, no multitasking capabilities, etc.--the iPad appears to have captured the collective imagination of the Apple faithful. In late April, technology journal Wired reported that the iPad already accounts for 26 percent of mobile traffic to its website: Mobile devices make up between 2.6 percent and 3.5 percent of total traffic, and from April 3 through April 19, the iPad represented 0.91 percent of total site traffic. Most intriguing, Wired adds that the sudden increase in iPad traffic correlates with a declining share of iPhone and iPod Touch users, suggesting that most iPad visitors are existing Apple mobile device users trading up to a bigger screen.

"Bigger" seems to be the operative word here--everything about the iPad is larger, including the developer revenue opportunity. One of the early iPad success stories is Vimov's Weather HD, a 99-cent application boasting current and forecast meteorological updates presented in high-definition video. A recent Vimov blog entry analyzes Weather HD's App Store success, reporting that downloads reached the 3,500 mark in connection with the iPad's Apr. 3 launch, slipped below 1,000 per day a week later, then jumped back as high as 2,300 by mid-month. Correlating its internal accounting with the App Store sales and rankings of other iPad applications, Vimov estimates that on Apr. 15 alone, the top 100 premium iPad apps collectively took in $304,058 in revenue--the firm also calculates that the top 1,000 apps are earning roughly $372,000 per day, translating to about $136 million in annual U.S. sales. Factor in the international market, and Vimov forecasts that iPad application sales could average $272 million per year.

It's no wonder that free iPad applications are relatively scarce. According to data compiled by app store analytics firm Distimo, 80 percent of all iPad applications fall into the Paid Apps segment--by comparison, 73 percent of iPhone and iPod touch applications carry premium price tags, while the average iPad app costs $4.67, as opposed to $3.82 on iPhone. Medical apps for iPad lead the way at an average price of $42.11, followed by Finance apps at $18.48; on the iPhone, Medical apps average $10.74, and Finance apps average $5.74. From the screen size to the app prices, it's obvious that bigger is better for the first wave of iPad developers--and equally recognizable that their ranks are only going to keep growing from here. -Jason