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Thursday, Jan. 28, 2010

iPad: What is it good for?

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Steve Jobs took the stage yesterday for what might be his last earth-shattering product announcement- the long awaited, much discussed iPad, a product that Apple has been working on for over seven years.

Tablet computing is not new to Apple. The Cupertino, CA company released its Newton tablet/pda combo in 1993 to an underwhelming response from the general public and the geek nation alike. The iPad is certainly a giant step forward in tablet computing. It looks like a much larger iPhone, but retains the sleek, shiny allure of its smaller, arguably more useful cousin.

Apple’s stock dipped 4% yesterday after the iPad announcement, but ended 1% higher than it opened. Analysts tell us that the reason for the rise was the announcement of the $499 opening price point for the device. The stock opened lower today, but it remains to be seen what impact the iPad will have on Apple’s bottom line. The Newton, the cube, and the early iBooks aside, Steve Jobs has a stunning track record of successfully creating and marketing products that change the course of daily life.

Despite the beauty of the iPad, it is difficult to understand exactly how this particular device will enrich the lives of users. The entry-level devices will not include 3G connectivity and will require a wifi hotspot. The models that will include 3G connectivity carry a daunting $829 price point- with no break on the data plans that will provide the connectivity. It is rumored that AT&T will offer a $30 data plan for the iPad, but will not offer a break for those of us that already pay for an iPhone data plan. Currently, I personally pay $30 for my iPhone data plan, $60 for a Verizon broadband card for my laptop, and $40 for my broadband connection at home. That’s over $1,500/year for internet connectivity. I am simply not willing to add another line item to that expense category- but the iPad is of greatly diminished value to me without an “anywhere, anytime” internet connection.

Apple is leaning heavily on the video capabilities of the iPad. While the screen is beautiful, and the built-in speaker is rumored to be quite robust, one can purchase a 42-inch HD TV for about the same price as the 3G-enabled tablet. That same person can watch TV and movies on their laptop and on their iPhone. Sales of movies and TV shows in the iTunes store have been unimpressive, and Apple will likely continue to feel increasing pressure from websites like Hulu and YouTube, which offer content for free or via an advertising-supported platform.

Jobs also touted e-books as one of the functions that will make the iPad a must-have. While the screen is gorgeous and larger than the smaller Kindle (amazon.com’s e-reader), it is backlit. Many e-reader users want a screen that is not backlit and is more like reading a paper book, especially after spending most of the day in front of a computer screen. As for newspapers and other periodicals, there is already a buzz that the iPad will save the daily newspaper. amazon has already introduced a larger Kindle, more suitable for reading a newspaper or magazine in a digital format. The New York Times devoted nearly a full page of today’s newspaper to the iPad announcement- but failed to mention that the old grey lady was the newspaper that Steve Jobs used to tout this function of the iPad- and that the NYT worked with Apple for months to create a digital version formatted exclusively for the iPad.

Despite the larger screen, which allows for beautiful color, many users will likely still prefer to read newspapers on their dedicated e-readers, smartphones or laptops, or will continue to read the print editions. In addition to the Kindle itself, there are already Kindle apps for iPhone and Blackberry, and one for the PC and Mac personal computer platforms, the combination of which gives readers the ability to view their e-books anywhere, on almost all of the devices they already own.

The New York Times published a particularly entertaining article about e-books on the iPad today. The article’s title is titled “Books on iPad Offer Publishers a Pricing Edge”. Deep in the story, this line appears: “In the short term, authors and publishers will most likely earn less from book sales on the iPad [as opposed to providing content for the Kindle].” Much of the success of amazon’s e-book program has been due to the bookseller’s lower price point for e-books- almost never higher than $9.99. Apple has announced e-book prices ranging from $12.99 to $14.99, closer to the price of a paperback.

So what is the bottom line on the iPad? It certainly remains to be seen. Apple’s combination of form and function is a powerful motivator for consumers, and the iPad is certainly beautiful. However, until there is more evidence that the iPad will become a preferred device for video content, gaming, e-books, and web-surfing, it seems like one more device that will sit on a shelf, forever charging, while we continue to use our iPhones, laptops, netbooks, and e-readers. Much of the allure of the iPhone is that it is our e-book reader, our GPS, our web browser, our online banking tool, our e-mail client- and, of course, our phone- all in a pocket-sized package.

Apple iPad pros:

  • Beautiful large color screen with cutting-edge display technology.
  • Smooth video playback.
  • Full internet browser.
  • Long battery life (up to 10 hours, according to Apple).
  • Elegant design.

Apple iPad cons:

  • No subsidies for 3G internet connectivity.
  • High price point for 3G-capable models.
  • No Flash capability (severely limiting the ability to stream video and audio from the internet).
  • Much larger “footprint” than an iPhone.
  • Not a phone (but it does include a built-in microphone).
  • No camera.
  • No expansion ports.
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