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The iPad is the device that faces the greatest competition

April 1, 2010

UPDATE – PC World wrote a column comparing the iPad vs netbooks.  The verdict?

At this point, with iPad prices starting at $500, we think most users will get more for their money from a $350 netbook. But if Apple chops a couple hundred bucks off the price of its iPad, the decision would be much harder to make.

You think first-generation iPhone users were mad when Apple slashed its price early on (forcing Apple to issue $100 rebates after the complaints)…

I will be the first to agree that the Kindle cannot compete against the iPad—because the Kindle is not a tablet or multimedia device (something the media seems to have failed to grasp).  While columnists  have noted the limits of the iPad, their prognostications have by-and-large suggested that the Kindle will have to become the iPad or face certain death.

Well, reviewers have finally received their iPads for hands-on inspections, and the reactions (NY Times hedges by offering a dualistic review, “Looking At the iPad From Two Angles”; WSJ hails the iPad as almost a laptop killer, even while noting the laundry list of laptop features missing from the iPad, “Laptop Killer? Pretty Close”)  are predictable—it is a gorgeous device, but what is the market?  What is far more interesting are the analyzes of the business reporters, who have spent months focusing on the likelihood of success and profitability of the iPad—and these have been much harsher.  Even the techie-writer from USA Today, in a piece that praises the iPad, understands the conundrum:

The iPad is larger than a smartphone but smaller than a typical laptop. Depending on your perspective, the space between is either fertile ground for an electronic device or a no-man’s land. Even Apple seems unsure to what degree the iPad may hurt sales of its MacBook or MacBook Pro notebooks.

Apple has been successful entering existing markets where they perceived a weakness—mp3 players that relied on multiple and unfriendly software to manage and rip music; smartphones that were primarily email devices with clunky internet browsing and media playing that entailed yet another software. Apple developed sleek, superior products—often subsidized by post-purchase revenues (music sales via iTunes; applications via the App Store).

Conversely, the ereader market is relatively content. Yes, there is large room for customer growth, but what are the glaring needs that are absent from the current generation of E-Ink ereaders? Nothing, without sacrificing some their key attributes—two-week battery life; no glare from sunlight; lightweight/one-hand design; wireless access to books. Compare the iPad to the Kindle:

  • Tipping the scales at 1.5lbs, the iPad weighs 2.5 times more than the Kindle (with 3 times greater moment or torquewhich one will certainly feel in their wrist).
  • Battery life hovers around 11 hours, versus 2-weeks for the Kindle. IPad owners should plan on keeping yet another charger laying around for regular charging.
  • Wireless access will cost an additional $130 for the hardware plus $15-30 a month.
  • Reading outside? Not very well in sunshine (but reading outside is overrated, right?).

So, let’s just end, for now, the argument of whether the iPad will kill the Kindle.

No, the product facing the biggest potential competition is not the Kindle, but rather the iPad.

The mainstream hardware manufacturers have ceded the standalone ereader market to the book sellers (the glaring exception being Sony, who is still kicking themselves for not inventing the iTunes/iPod model, and will enter any market)—wisely conceding that one must have an integrated model to succeed. Modifying their current hardware—netbooks, tablets, smartphones, media players—into iPad-like devices, however, is simple and does not have to rely on proprietory media sales to make the device profitable.

So, Dell is bring the Streak. Asus and Lenovo: tablet netbooks (Asus Eec PC T101MT; Lenovo IdeaPad).

Asus "tablet netbook"

The Streak flanks the iPad from the one side—it is smaller, runs on Google’s Android, and is less expensive. It may have a smaller screen, but one can pocket the Streak, not the iPad.

The tablets flank from the other—these CAN replace one’s laptop. As for playtime, the iPad may offer a more comfortable reading or video experience than these products—due to its slimmer profile, lighter weight, greater battery life—but by how much? In two hands, does the iPad’s 1.6lbs/0.5in thickness offer that much more comfort than the Asus’s 2.86lb/1.2in?  The 11+ hours of battery life that reviewers are getting from the iPad is impressive, but what if you want to spend 4 hours working on documents/spreadsheets/etc. and finish the night with a few hours of video watching in bed?  Tablet netbooks—yes. IPad—no.

If one is shopping for a portable video and gaming device for $500-$830, then the iPad is probably the clear winner. But that screen gets even smaller if you plan on watching any widescreen television shows or movies.

However, this will not replace your smartphone, your ereader (if you do any significant reading—see this survey that highlights how little the reading function matters to potential iPad customers), your music player, your laptop, or even your netbook (if you do any significant typing applications or video conferencing). I think Mr. Jobs is well aware of this—and is hoping to create a new must-have device category.

On a personal note, I am in the market for a new device—I want to be able to read my Kindle books, pdf documents, Skype, surf the internet, etc. This will certainly not replace my Kindle, which will continue to constitute 90% or more of my reading usage, but it will fill a gap—and it will most likely be a new tablet netbook.

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