Screen shot 2010-01-27 at 1.25.01 PMIt is quite clear that many people have either a love or hate relationship with the Apple. The Cupertino, California-based brand announced its new iPad tablet device earlier today, and I think there are more lovers than haters at the moment.

It is sleek, it is stylish, it has the expected cool factor. Yes, it looks like a big iPod Touch. It is also missing things like a camera, Flash support, true GPS (unless you get the 3G versions), multitasking capabilities, and there is still a debate if you can do Skype on it (you can do VOIP now on 3G), since Skype is on the iPhone. Will AT&T or Apple prevent people from running Skype on it? I think there would be uproar!

Screen shot 2010-01-27 at 2.21.53 PMThe pricing was surprising. Apple usually leaves room under it for others but this time it did not. Or if it did, it’s not much room. It’s basically a space between $249 (higher end smart phones) and $499. The new price point “wasteland.” The A4 size iPad comes with 10 hrs of battery life from its 25WHr lithium-polymer battery, and starts at $499 with 16GB of Flash storage, which was an eye opener but I don’t think there is much margin there. At $599 you get to 32GB and at $699 you get to 64GB. Download a few HD movies and you are pretty much going to fill up the 32GB model. All those models come with WiFi. 3G connectivity is a $130 addition per model- $629, $729, and $829 respectively. It’s AT&T, despite all the pre-launch rumors about Verizon. The data plan is either $14.99 per month for up to 250MB, which is a useless price point because you will use that up in a week, or $29.99 for unlimited data. The question is if it’s really unlimited data? Some carriers unlimited plans are not really unlimited. And the 3G is unlocked! It’s a pre-pay plan and AT&T is throwing in free access in all of its WiFi hotspots (like Starbucks).

But an unlocked iPad won’t run on T-Mobile’s 3G network, because T-Mobile is the AWS band running at 1700MHz. The iPad is UMTS/HSDPA running at 850/1900/2100MHz. Yes, it will run on EDGE! But trust me, it will crawl! Many people are thinking that the WiFi version will be good enough with the proliferation of WiFi today. They may be right, especially for non-techies. And iPad does appeal to the non-techie crowd. It’s hitting the sweet spot of pop culture- music, photos, videos, surfing, and a little productivity thrown in.

Screen shot 2010-01-27 at 1.58.35 PMI think the iPad is going to push the market in several different segments at once. Steve Jobs thanked the creators of the Kindle and said, “We are going to stand on their shoulders.” It’s too bad that Apple pushed Amazon into quicksand first. Apple usually decides whom they want to compete and compare themselves to. Steve Job’s other notable comment was “iPods, iPhones and most Macs are all mobile devices – Apple is the largest mobile device company in the world, now. Larger than Sony’s mobile device company, bigger than Samsung’s, in terms of revenue it’s bigger than Nokia!” That was an in-your-face wakeup call to the folks in Finland and Asia! Apple always decides whom they want to chase, and then they shift to a new thing/competitor/segment. The have the tightest hardware and software integration out there, and the most control over both— bar none!

Screen shot 2010-01-27 at 1.09.49 PMOne thing the iPad does really well is function as a big iPod Touch. iTunes is great on it. The second thing is that it’s a better ebook reader than anything else out there. Yes, it has a premium price point compared to Kindle and nook but iPad does so much, much more. And it’s in color. The third thing that it does well is that it plugs into a new keyboard dock. This means you can use it for most of your day-to-day work, as a primary device, and do email and use other productivity apps. This is one thing you can’t do with an iPhone or an iPod, they were too constraining. It’s not a great platform for CS4 or PageMaker. It’s not supposed to be. Again, it delivers in the key core areas of- music, ebook reading, photos, video, games, and the overall online experience. These are elements that Steve Jobs focused on in his speech today. There may be no reason to buy a MacBook Air going forward.

Screen shot 2010-01-27 at 1.36.53 PMThe iPad clearly bridges the gap between a smart phone and a notebook. I have met with countless device OEMs and semiconductor vendors who have tried for years to do this, with netbooks and MIDs (mobile internet devices), and it took Apple to really define the category for everyone. Apple didn’t want to produce a cheap netbook. That’s the approach that all the other laptop vendors as well as a few smart phone vendors such as Nokia took. There is a market for netbooks. Not everyone is bought into the cult of Apple, because of their price points. But the price gap between iPhone and MacBook has narrowed thanks to iPad.

Screen shot 2010-01-27 at 2.27.45 PMiPad will go toe-to-toe with higher end netbooks ($399 and up) but there will still be room for cheaper netbooks ($199-$299) at Walmart and the price clubs, and heavily subsidized black and white ereaders if the content providers want to keep supporting those other ebook file formats. Apple is supporting the ePUB format. Amazon and Barnes and Noble will need to seriously reconsider their strategies, especially if Apple gets the boatload of titles that everyone is expecting, and applies pressure on ebook pricing like they did with music, TV shows, and movies. They have McGraw-Hill and the textbook market is sitting at their feet. So the iPad for education, especially higher-ed could be big! Watch out if someone cracks the DRM on textbooks! A couple of textbooks today cost more than the iPad. It depends on how close tightly the content is ties to the device.

No camera. And it seems to be the biggest downer to a lot of people. I just don’t think they could get it into v1.0. However, those developers who downloaded the SDK today reported that it has code support for a camera (there’s an “aha! moment”). So a camera will be there at some point. No USB to plug in a web cam either. No iChat. No messaging. We’re not going to hold this thing up to our head to make a call. But it does have a microphone and a 3.5mm jack. It is a shame that you can’t do video conferencing on it. Maybe there is something in the SDK on that, for down the road.

As far as supporting file formats, the iPad supports a bunch, including .doc, .docx, .pdf, .ppt, .pptx, .xls, .xlsx, .rtf, .xtx (see what I’m getting at?). They launched a new version of iWorks today too, and have a custom keyboard on the iPad that works with the software suite. And individual iWork apps will sell for $9.99 each.

No GPS except in the 3G models. I would argue that assisted GPS in the WiFi-only versions is good enough for most people. Assisted GPS does navigation quicker. We can argue about the better part of the equation. The iPhone already has good GPS apps for it, and they will port to the iPad.

I think the iPad is one of the most impressive version 1.0 products ever announced. Does it do everything? No! Are there things missing that many of us would have wanted? Yes, of course!

But Apple planted a seed— an heirloom seed for everyone to look at, and maybe buy. There are many different usage models that are going to emerge around this device:

  • The leanback mode for entertainment, web surfing, and home automation and control.
  • The education mode for not only K-12 but higher-ed as well.
  • The gaming mode with its bright LED-backlit ISP display— OLED still costs way too much for these price points— and ability to use multitouch to control in-game elements. Gaming on iPad is going to put even more pressure on Sony and Nintendo in the portable game player space.
  • The specialty mode, such as an aeronautical solution that can be used for navigation. Someone might put a rugged cover around it for certain environments. I don’t think it’s going to be a pure consumer device. The iPhone isn’t if you starting looking at the applications out there.
  • The executive solution mode because it is a killer presentation device for a road warrior who is on stage a lot.

Will it cannibalize Apple’s MacBooks? Time will tell. But some people today said they might consider the iPad when they go replace their existing notebook.

Like the iPhone, Apple has another product that has the potential to be really big, and again, wake up the industry. It will spur competition, and innovation. People will still need a phone-like device (and increasingly those are smart phones) and they’ll need some other mobile device for a better experience. iPad pushes that second envelope.

I just liked the name “Canvas” better!

-Randy Giusto

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