Happy 10th, iPad: Steven Sinofsky Reflects on Microsoft’s Perspective

Today is the 10th anniversary of the unveiling of Apple’s iPad, and the beginning of a massive shift in personal computing. The iPhone was already making a huge impact — 2010, to my recollection, was prime “There’s an app for that,” territory — but it wasn’t affecting PC sales. Microsoft’s former head of Windows development, Steven Sinofsky, has written a long Twitter thread discussing how Microsoft thought about the tablet market, and why the iPad was such a bolt from the blue.

1/The announcement 10 years ago today of the "magical" iPad was clearly a milestone in computing. It was billed to be the “next” computer. For me, managing Windows, just weeks after the launch of Microsoft’s "latest creation" Windows 7, it was a as much a challenge as magical. pic.twitter.com/wokHfyM5Qk

— Steven Sinofsky (@stevesi) January 27, 2020

It was tablets, not smartphones, that cannibalized the PC market, as the graph below makes clear:

Before the iPhone, smartphone growth had been driven by companies like RIM. By the end of 2009, both iOS and Android were in-market and growing rapidly, and the PC market was growing right alongside them. Even in the depths of the Great Recession, the PC market still grew by 6 percent. 2010 itself was a strong growth year for the industry, partly thanks to a very strong reception for Windows 7. By 2011, however, growth had fallen to an anemic four percent. The industry contracted each year from 2012 – 2018 and only grew again, slightly, in 2019.

So why did Microsoft miss critically in this space? Because it was looking in the wrong places for inspiration. Microsoft’s efforts with tablet-style computers go back decades, but on the PC side of the industry, everyone thought these computers had to be productive, with keyboards or styluses and a UI designed to preserve these capabilities. In 2009 – 2010, Intel was talking up MIDs — Mobile Internet Devices — as the future of computing. When journalists thought about what Apple needed to do to challenge netbooks, they envisioned a Mac netbook.

3/The success of iPhone (140K apps & 3B downloads announced that day) blinded us at Microsoft as to where Apple was heading. Endless rumors of Apple’s tablet *obviously* meant a pen computer based on Mac. Why not? The industry chased this for 20 years. That was our context. pic.twitter.com/s8v0SoUeqo

— Steven Sinofsky (@stevesi) January 27, 2020

Steve Jobs had something else in mind.

MIDmarket Failure

The problem with Atom netbooks was that Intel didn’t really want to make them. Some of you may remember that the company actually ran into production shortages after Atom started shipping because it hadn’t allocated enough production space to meet demand. The reason Intel was reluctant to feed the netbook beast was that netbooks were never the point of Atom in the first place. Atom was the CPU that Intel was going to use for next-gen MIDs, not ultra-low-end laptops. The success of the netbook market was a mistake. Sinofsky as much as admits this:

7/“Cheap laptops"…from my perch that was a good thing. I mean _inexpensive_ was a better word. But we knew that Netbooks (and ATOM) were really just a way to make use of the struggling efforts to make low-power, fanless, intel chips for phones. A brutal takedown of 40M units. pic.twitter.com/wDzwM7wzhd

— Steven Sinofsky (@stevesi) January 27, 2020

This is an example of how the PC industry fell prey to collective groupthink without even realizing it. Like a lot of other pundits and journalists, I dismissed the idea that the iPad would threaten the PC market. While I believed that tablets would absolutely take some market share, I thought they would exist alongside PCs without significantly cannibalizing the PC market. When I looked at a tablet, I saw a laptop with the most useful part chopped off. MIDs weren’t powerful or capable enough to be attractive yet, and Intel was clearly fighting to get them off the ground via projects like Moblin and MeeGo.

9/There was no stylus..no pen. How could one input or be PRODUCTIVE? PC brains were so wedded to a keyboard, mouse, and pen alternative that the idea of being productive without those seemed fanciful. Also instant standby, no viruses, rotate-able, maintained quality over time…

— Steven Sinofsky (@stevesi) January 27, 2020

Those of us who use laptops to produce content focused on what the iPad couldn’t do. Customers focused on what it could do — and it turned out that while the iPad couldn’t do a lot, it did what it did pretty damn well. Folks liked it. To this day, Apple has a much larger slice of the tablet market (in percentage terms) than the phone market — between 30 – 38 percent in tablets, depending on the quarter, compared with 14 – 18 percent for phones. Unlike in phones, where several companies still vie to launch top-end Android-based competitors, you don’t hear a whole lot about premium Android tablets these days.

If I had to pick which Apple product had the most impact on the industry as a whole, I’d say the iPhone. If I had to pick which of the two had more impact on PCs, specifically, it would be the iPad, hands down. There’s no evidence that people replaced buying new laptops with smartphones, but a large chunk of the market definitely replaced laptops with tablets. Apple hasn’t yet been able to convince the market at-large that the iPad Pro should be considered a full replacement for a laptop, but it definitely drained off tens of millions of PC sales into a new market segment. Sinofsky’s thread helps explain why Microsoft went the direction that it did with Windows 8, even if that direction turned out to be a disaster.