Finally, the rumors and speculation are at an end. Apple has announced the iPad.
(By the way, didn't Steve Jobs look healthier? Like he's gained some weight?)
The key question now for investors: can Apple make the iPad a successful new category where others have failed? Or put another way: do you need an iPad in addition to a laptop and smartphone, which are must-haves for many people?
Clearly Apple has created a gorgeous product at a great price point. But to be successful at building this in-between category, Apple must first rally its faithful, so I'll look to myself (a huge Apple fan) as a good example. Here's my thinking:
As much as I'm intrigued and think the iPad is a fabulous product, I'm frankly unclear as to whether I'll buy one, ever. I didn't have this reaction with the first Mac, or with the first iPod, and certainly not with the first iPhone. I knew - upfront, on the day they were announced, sight-unseen -- that I'd eventually buy each of those products.
I might consider the iPad as my next laptop replacement, but only if the available apps allow me to do the full range of work I currently do on my aging Mac portable. But if it is my next laptop replacement, Apple will have lost a $1200 MacBook Pro sale, in favor of a $600-$700 iPad sale. That's a net loss.
All in all, I just can't see having an iPad in addition to my iPods, my iPhone, my desktop iMac and my Apple laptop. It's getting to be device overload, even for me.
So if that's the thinking of one veteran Apple fan, it can't bode well for the short-term outlook for the iPad, which many investors are expecting to be an iPhone-like megahit. That's where the short-term disappointment will come for investors. Around late Q3, when initial iPad sales numbers are revealed, it will become clear this product is a nice seller, but not a great one. AT&T as the only 3G provider won't help. Then the "Apple comes up short with iPad" stories will start to flow.
Now for the long-term view: Apple has just reinvented portable entertainment and mobile computing. No, it's not "magical," as Apple claims, but it is an elegant form factor that will engage niche industries to create apps for their businesses. It will likely become a hit with educators. And don't overlook the fact that iPad is the first product with a proprietary Apple-made chip, the A4. Apple wants to be in full control of its destiny.
Equally important is the disruptive nature of this product in terms of price: some smartphones cost as much or more than the entry-level iPad. Are you listening, Nokia? It's a device that, while not a netbook, will certainly take a piece of that category.
Whether the iPad will come at the expense of Apple's core Mac OS business remains to be seen, but just as Apple started the decade with the iPod, which grew slowly into an iconic device, I predict the iPad, after initially underwhelming investors, will also grow over time and indeed create a new device category. But it will take time.
Apple is planning for the long haul. This company has moved beyond an e-reader and created an e-entertainment device. One can only imagine how the folks at Amazon, as well as the Wintel companies who've had tablets out for years, are feeling right now.
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