iPad: A Hit or Miss?

A number of factors will determine whether the iPad will be a success or a failure, but my own belief is that it will be a non-game-changing, partial success

Well, the iPad made its debut and there is lots of hype about it, but the product is not available yet so the reports circulating in the press are based on a few short hours of use or first impressions. I have seen articles that state that the iPad will kill the iPhone as well as the mobile web, that the iPad doesn’t have what it takes to be a winner and it will be a loser, and everything in between.

A number of factors will determine whether the iPad will be a success or a failure, but my own belief is that it will be a non-game-changing, partial success. Realizing that it took Apple three generations of the iPhone to get it right, the first of any new class of product will not tell the story, but it will give us a glimpse into Apple’s vision of a tablet computer. The issue is whether consumers and the business world really want to carry a tablet computer or if this product will end up in various market niches where it makes sense to use a tablet on a daily basis.

Apple got some things right and others wrong. First, so it could avoid telegraphing the introduction of the product, it did not file for FCC type acceptance before the announcement. Since the FCC publishes records of devices that have been submitted for acceptance, what is coming becomes public knowledge if you know where to look. And, of course, many in the media know where to look. Two things, neither of which are advantageous to Apple, could happen now. First, Apple could be issued its type acceptance and have the iPad on the market in March, two months after the product release. It will be difficult to keep up the hype for two months with no product in the market, and other vendors will have a chance to catch up before the product is even available in stores.

It is also possible that the FCC will not approve the device without changes being made, and this could delay the iPad from coming to market for many months. I don’t believe this will be the case, but it certainly could happen, which is one reason FCC type acceptance is usually applied for well before most products are announced. Either way, at some point the iPad will come to market and, if Apple is as good as it has been with previous products, it will read all of the reviews and suggestions for the iPad and perhaps even tweak it a little before it is available in stores. If so, Apple may actually release iPad 1.5 into the market rather than iPad 1.0 and this could make a difference.

Another mistake Apple is making is more serious. Its CEO seems to be using the iPad and iPhone to do battle with Adobe and Google. Apple doesn’t believe Adobe’s Flash is bug-free (I don’t know of any software that is), and feels that Google is trying to destroy the iPhone with its Nexus One phone and Android operating system. The issue I have with these two battles is that if you look back in history, you will find that when a company starts taking on its competitors rather than continuing down a successful road of its own, it loses sight of the fact that it is ultimately customers of the products who determine their success or failure, not competitors. History holds many examples of companies’ demises that began with their obsession with real or perceived competitors. I am not suggesting that Apple will fail, but I think it is taking its eye off the ball and is overly concerned about Google and others.

One of the best and most recent examples of this is the battle Sun undertook against Microsoft several years ago. Sun spent a great deal of time, energy, and money trying to build Java into an operating system to challenge Microsoft’s dominance and wasted a lot of resources trying to develop a Sun office suite of applications that would live in the cloud and be available at virtually no cost. The idea, of course, was to destroy Microsoft’s dominance, not to respond to what its client base wanted. Sun has faded away and is now being wrapped into Oracle, another company that tends to do battle against its competitors rather than listen to its customers.

Google has become another guilty party in this type of activity, declaring war on Microsoft, Apple, and others. It believes it is the future of everything Internet and that it needs to destroy its competitors now rather than prove it is right by delivering what customers want. Google was very arrogant when it introduced the Nexus One, proclaiming it an iPhone killer and not even setting up a customer service operation.

But back to the iPad. It is, in typical Apple style, elegant, easy to use, fast, fun, and responsive. But this alone does not make it a winner. As long as AT&T and other wireless network operators require that each device have its own wireless broadband subscription, I think uptake will be limited. iPhone customers won’t want to pay for wireless broadband for both an iPhone and an iPad, and non-iPhone customers will either have to give up their existing wireless broadband contract or deal with having one contract for each device.

In short, the iPad is not the game changer the iPhone was. It is a nice niche product, but it is competing with notebooks, netbooks, smartbooks, and soon other tablet PCs, and it is not clear how large the tablet PC market is or will become. I classify mobile products in several categories. The first set of classifications is unconscious-carry versus conscious-carry. When you leave your office or home, you decide what to take with you for that trip, even if it is only to a store or to run errands. Your unconscious-carry device is something you wear on your belt, put in your pocket, or carry in your purse. It is usually a phone, and today many are smartphones. A conscious-carry device is something you have to think about whether to carry with you: a laptop, net or smartbook, or iPad. This definition may not be appropriate for college students whose unconscious-carry device is really a backpack that has everything in it, but it does apply to the rest of us.

The next category is the need to access information versus create information while you are away from your home or office. If you only need access to email, calendar, and the web, and you don’t need to write an article, paper, or report of some kind, chances are you will only take your unconscious-carry smartphone with you and leave your other devices behind. However, if you need full access to your work to create or change it in the field, you will want to take another device with you. To me, the iPad is not a must-have, must-carry-all-the-time device.

Apple is also trying to capture a piece of the ebook market and I am sure the iPad will be great for that, but the business model will have to change. I carry a Kindle in my briefcase, I do not pay a monthly fee for Sprint’s broadband service since Amazon pays Sprint when I download a book, and it doesn’t cost me anything to use. I can read every day and only buy the books I want, which are surprisingly inexpensive. Yes, the Kindle is a specific-purpose device, but it is small, light, and works for me. Others may prefer a multipurpose device or like to see web pages on the screen, but I am more into the convenience and the content—which is why there are so many device choices.

A number of my friends and business associates use the iPhone constantly. I watch them and talk to them about it. My doctor uses his to look up medications and interactions and all sorts of things. Most if not all of these people simply pull out their iPhone, access the application they want, and get the information they are looking for. This is much different from having to get out an iPad to do the same thing, and I cannot imagine any of them trading their iPhone for an iPad. They might want both, but again, I think the wireless broadband pricing model will quickly kill that idea.

The iPad is a nice device and I am looking forward to being able to experiment with it. Will it replace my BlackBerry and notebook combination? No, it won’t. Will I add it to my collection of mobile devices as yet another option? No, I won’t. I am certain that Apple will have some success with the iPad, but not to the same degree as the iPhone, nor will it change the industry in the same way. Tablet PCs have been available for more than ten years in one form or another, including some current entries where a notebook is converted to a tablet by turning the screen around. Microsoft has been supporting tablets with its own operating system for a number of years, yet the tablet has remained an almost insignificant portion of portable computer sales. With the entry of the iPad and other tablet computers that will follow, we will see if there really is a market for them after all.

Pundits, analysts, reporters, competitors, and Apple fans all have their own first impressions of the iPad. Once it becomes available in the marketplace, there will be more reports and we will find out more. In the meantime, Apple may have a problem keeping the buzz alive. Once the buzz and hype wear off, will there be enough momentum to propel the iPad into a true success in the marketplace? My bet is that there won’t be, for the many reasons I have described above and a few more. If the iPad is only a mild success, as I believe it will be, it will have fallen victim to its own predecessor, the iPhone, which has already hurt the netbook, smartbook, and notebook markets.

I believe that the convenience of a smartphone and the fact that we always have it with us, smaller screen and all, will make the iPad an interesting new product that will find its way into market niches but not the mainstream.

Andrew M. Seybold