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Apple (Nasdaq: AAPL) finally let the iPad out of the iBag Wednesday, with all the style and hyperbole the technology industry has come to periodically expect from Steve Jobs' company.
Jobs and several other Apple executives demonstrated the company's idea of what a tablet computer should do before an invitation-only crowd of nearly 500 influential tech journalists, bloggers and analysts at San Francisco's Yerba Buena Center for the Arts. What the audience saw: a 9.7-inch color multi-touch screen surrounded by a sleek black frame that's half an inch thick, weighs 1.5 pounds and is jam-packed with what Apple's new ad tagline for the product calls "the best way to experience the Web, email, photos and videos. Hands down."
Consumers will have to hand over anywhere from US$499 to $829 for one of six models of the iPad, depending on flash storage capabilities (16 GB, 32 GB, 64 GB) and whether they want just WiFi capabilities or WiFi plus 3G network access. A contract-free 3G data plan from iPhone network provider AT&T (NYSE: T) will cost $14.99/month for 250MB of data and $30 for unlimited use.
When the first WiFi-only models arrive for sale in March, those prices will give you access to the Apple App Store, with applications that can be adjusted to fit a screen larger than an iPhone. (Those who already paid for iPhone apps can sync them at no additional charge to the iPad). There's also a new iBooks app and iBook Store, which matches the iTunes store in style and functionality. Even though no publishers except The New York Times Co. (NYSE: NYT) joined Jobs on stage, Apple says five of the biggest publishing houses -- HarperCollins, Simon & Shuster, Penguin, Hachette Books and Macmillan -- will be selling e-books via the iBook Store at prices that range from $8 to $16 dollars a copy.
iPad Pounces on Kindle
Jobs gave Amazon's (Nasdaq: AMZN) Kindle e-reader a semi-shout-out by praising its functionality before adding that Apple would "stand on its shoulders." The Kindle and other grayscale e-ink readers are now officially on notice, said Yankee Group analyst Carl Howe, who was in the audience. In fact, they may have just been relegated to "so last-decade" status by the iPad.
"[Apple] just reset the bar on what e-readers look like, and not in a good way for most of the folks in the e-reader market now," Howe told MacNewsWorld. "If you can't do full color, then you're starting to look like the wrong choice unless you really need the battery life."
Analysts were allowed inside a room after Jobs' keynote and given brief chances to play with iPads, taking the device through some of the same paces that Apple executives did in their on-stage demonstrations, Howe said. They played games, watched movies like "Star Trek" and "Up," checked out YouTube videos, tested a new gesture-friendly version of Apple's iWork productivity software and used their fingers to digitally thumb through iBook pages.
"There wasn't a single person saying, 'Nah, nobody will ever buy this,'" Howe said. "It's really sweet. Will people pay $500? I think the price point is exactly right."
During the end of his time on the stage, Jobs asked the same question likely on the minds of analysts like Howe as well as the company's skeptics: Is there room for another device between a smartphone and a laptop? "I think that was a great way to cue that up. Do you really need another screen in your home? As Steve Jobs is so good at doing, yeah, sure you do. The way to view it is, this is not a PC. It's really a media device. You have to be willing to open your brain to think of it that way."
Again With the AT&T Network?
Rumors about Verizon taking over network carriage duties for Apple, after reports of complaints about iPhone data usage issues and dropped calls, didn't result in any apparent changes in the relationship between the two companies. It may have come down to the technical specifications for the chipsets and processors within the iPad simply designed to run better on the types of networks and spectrum bands used by AT&T, both domestically and internationally, according to 451 Group research director Chris Hazelton. (Jobs said that overseas carriage plans and pricing were still be worked on as of event time).
"You want to make it a worldwide device, and you want to go with a network that has some problems but has a large carrier behind it," Hazelton told MacNewsWorld. "[Apple Chief Operating Officer] Tim Cook made some comments on Monday's earnings call that they had looked at AT&T's expansion plans themselves and were very confident on how AT&T was going to build out 3G."
The consumer media uses for the iPad will no doubt get most of the attention now that the device has gone from hype to reality. However, Hazelton sees possible enterprise potential due to the inclusion of revised iWork apps for word processing, spreadsheets and presentations. "There are also a number of (third-party) enterprise apps for expense management, travel tools, productivity, social networking. It won't be a hardcore enterprise tool, and it might be a tough sale for companies, but it does appeal to small and medium-sized businesses. Just like the iPhone in its current stage, we'll see how the possibilities bump up as employees buy it themselves and bring it to their companies."
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