A Few Words About the iPad’s Biggest Competitor
February 15th, 2010You just know that the critics are busy comparing the iPad to other tablet computers and perhaps netbooks. If what they suggest is true, those are the chief competitors to the new Apple gadget.
But it may turn out that Apple’s biggest competitor is — Apple!
More specifically, Apple’s note-book lineup. You see, many if not all of the functions for which many Mac users buy a portable computer can be quite well served for less money by the iPad.
That may not seem terribly likely, but consider that most Mac and PC users have established a fairly modest work agenda, such as checking email, doing simple word processing, Web surfing and perhaps managing personal finances. Students will use their MacBooks and MacBook Pros to write homework and, of course, contacting their friends via instant messaging and social networks.
Pretty much all of these tasks will likely run perfectly fine on an iPad. Indeed, assuming that Apple strikes the appropriate partnerships with certain major publishers, a large portion of the textbooks students buy will be available for the iPad. So instead of lugging a backpack stuffed with thick books, a single device weighing 1.5 pounds will store everything. With an iPad and, one hopes, a decent printing feature, and they will be able to do all their homework without using another computer. They won’t be restricted to iWork, since it’s quite possible Microsoft will deliver an iPad version of Office, and third parties will soon enter the fray.
During breaks, a trip to AIM, Face-book or Twitter will be trivial, with proper parental controls one hopes.
All right, maybe writing term papers on a touch keyboard isn’t so comfortable, but don’t forget there will be a regular keyboard available as an option from Apple and other companies, not to mention the very real possibility that just about any third-party keyboard will work nicely. When you put this combo together, and take into account the iPad’s low price of entry, would there be any need for a regular note-book for this segment of the population?
Yes, I realize that there are loads of productivity apps that won’t be available for the iPad, nor are they even feasible to port. In addition, there are certainly loads of chores for which a regular computer is to be preferred. But what you’re seeing here is a huge segmentation of the market, and it’s quite possible that the iPad will, to some extent, cannibalize sales from the regular Macintosh lineup.
Then again, it’s also possible that lots of people for whom Macs are too pricey might switch from Windows because of the iPad. I mean, compare any netbook to the iPad, and see which provides a superior user experience. Of course, such a comparison is strictly theoretical right now, since the iPad is still several weeks from shipping.
Even when iPads are readily available, it will take time to really judge its real impact and potential. More to the point, even though I might suggest that certain features overlap those of a regular portable computer, that doesn’t mean customers will agree. It may well be that the iPad will serve largely as an auxiliary appliance, in addition to regular Macs or PCs. Quite possibly students will keep their iPads in their backpacks and won’t use them at home, even for homework, or keep the iPad on hand strictly for its e-book capabilities and otherwise stick with their Macs for everything else.
I would expect, however, that Apple has considered all these possibilities before giving the OK for the iPad. Maybe they feel there will be more business gained as a result, or that far more iPads will be sold compared to the number of Mac sales that are lost. I don’t pretend to have those answers.
Indeed, I expect that much of the utility of the iPad will not be known until customers actually begin to use these gadgets and find their own way. With over 150,000 apps available, no doubt the possibilities will be nearly endless, particularly as more and more iPad-specific software goes on sale.
In all this, I suppose you’re curious as to my feelings about the whole thing. Well, you know I’m an old fashioned type. I still do most of my work on a desktop Mac, presentlu a 27-inch iMac with the quad-core i7 processor. And, by the way, I have never encountered flickering or bands of yellow on the display. I suspect most of you haven’t either.
I also have a 17-inch MacBook Pro that’s in service for auxiliary tasks, such as monitoring the live stream of our two radio shows. That’s something that still can’t be done on an iPhone — and I presume the iPad as well since the operating system is essentially the same in most respects — because they don’t support RTSP streams from QuickTime or Darwin Streaming Server. Maybe that’ll come eventually, or we will switch to another streaming method.
In short, I’m still on the fence as to whether I’ll buy an iPad, though I expect I will, assuming I can find space in the budget to finance another gadget when the time arrives.
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The logical consequence of Gene’s observations is that we have to ask whether, or perhaps more accurately to what extent, the iPad is going to cannibalize Apple’s MacBook sales, and, if so, whether the profit margin on the iPad is sufficiently good that, if it does, Apple won’t lose on the deal. And, on the other end, Apple had to ask itself to what extent it is going to cannibalize iPod Touch sales (and even iPhone sales, too, since surely somebody is going to figure out how to bring voice-over-internet techonology to the iPad). Heck, it’s even going to cut a little bit into Magic Mouse sales because a few folks will probably use it as a touch-sensitive pointing device for their computers. But surely in deciding whether or not to make a tablet this was a question Apple examined very carefully and convinced itself that adding the iPod wouldn’t unduly damage the ecosystem of its other products. Let’s hope for Apple’s sake that they got this right!
@dfs, If the iPad cannibalizes Touch sales that would raise ASP, and in turn Profit Margins. Apple would prefer you buy an iPad over a Touch.
The issue is people buying-down from the Macbook line.
I believe that the iPad is in keeping with Apple’s original goal of the “computer for the rest of us.”
This got me thinking as to how many computer owners are under-utilizing their Macs or PCs. My guess is that number is not small (especially on the PC side) and Apple is hoping that many of the them would move towards a greater degree of simplicity of day-to-day tasks. In its current form, the iPad being a version 1.0 is a content-delivery computer. Someday it will be powerful enough for content creations. As the 1984 Mac changed our way of interacting with a machine, the 2010 iPad will do the same.
The fly in the ointment of course is that the iPad isn’t a standalone device. You won’t be trading in your MacBook or iMac because you need it to sync, back up purchases, an install new firmware and OS upgrades.
So while we may replace the one laptop or desktop per person we will still need that hub device for syncing (even when syncing and updates become wireless).
@Shock Me, You may keep an old Mac or PC around for syncing, but the iPad may still prevent purchases of some new Macs.
Peace,
Gene
I think we have only seen phase one of Apple’s conversion to all touch based computing. Rumors already have Apple working on a larger Tablet running OS X, supposedly available within the year. I foresee this as the new Macbook line starting at $999.
I guess it is natural to consider the iPad’s effect on existing markets. There may be some cannibalization from notebooks, tablets and Netbooks, Apple or Wintel, but this is not likely to be the iPad’s greatest effect.
I believe that many people, who are holding off on buying a computer because they are too difficult, will buy the iPad, instead. If so, the price and features of the competition is irrelevant. Apple, rather competing against existing products, is growing the mostly stagnant computer market.
Apple did this with the iPhone when it first came out. The Smart Phone owners, back then, disparaged the iPhone, because it was too different. There were necessary features missing, they said, like keyboards and third party apps. Apple either added those features or they turned out to be unnecessary. The criticism of the iPad is likely the same route.
It might effect MacBook sales, but for many they will buy iMacs, Minis, or the luggable 17 inch MacBook Pros. It would solve most of my mobile needs so I could go for that larger screen and faster 27″ iMac instead of settling for a laptop for portabilities sake.
Keep in mind that at this price point we may see new owners who would never have considered an Apple product beyond the iPhone or iPod. It may be that instead of cannibalization we actually see new customers also.
I don’t believe the price point will remain high for long. The iPhone dropped rapidly.
The main consumers that I see for the iPad will be the young, the old and the technically clueless. This is an anti-tech device. Grandma or Aunt Mabel won’t be afraid of it anymore than they are of the iPhone. Less than half of American’s still don’t use computers; this is for them.
@Louis Wheeler,
I agree that the iPad is for the people suffering from fear of tech. It’s only those high-tech snobs that can’t stand the iPad because it is beneath their skill level. It doesn’t do enough for THEM. They want their little brothers and sisters and their elderly moms and dads to master Windows 7 before they can read a book or watch a TV show. Add in a bunch of ports that those low-tech consumers have nothing to hook up to. The high-tech snobs are just being selfish and looking down on the lowly non-tech users as stupid. The brainiacs don’t seem to realize that everyone isn’t interested in all that technical crap just to perform some simple task. The geeks want Windows 7 wedged in just in case somebody wants to load Microsoft Office on their tablets. Good luck with that.
I’m glad Apple is making the iPad simple for those that find complicated devices frustrating to use. Those of us that love tech have our other full OSX or Windows devices to use. Let those who don’t want to learn the intricacies of processors and complicated OSes have a device for themselves they can enjoy. The six-year old won’t have to call tech support to play a few games. It’s just touch and go and have some fun.
Sorry tech snobs, the iPad is not for you. Take your tech skills elsewhere. The iPad for the 98% of the population that doesn’t need the headaches or worries to accomplish their simple tasks. Apple will sell iPads like toasters and microwave ovens and will make a lot of money off of those previously unreachable consumers.
I agree, basically. The iPad will be perfect for what a large number of people (e.g., students, travelers) do with their computers. It covers all the basics. But I think, if anything, the iPad will be more of a netbook killer than a MacBook killer.
Except for one thing: The iPad is NOT a stand-alone computer. It requires another computer for syncing. As far as I can tell, that’s the only way to get apps and docs onto the iPad. Perhaps that’s how Apple will insure that it does not cannibalize its MacBook sales. They intend it to be an ADDITIONAL gadget that people purchase, not a REPLACEMENT gadget.
@John B, Apps can be purchased from the App store directly from the iPad, as well as other content from iTunes and iBooks. No need for syncing to a computer in that regard.
@John B, I might add you can get documents on to the iPad via email, programs like Bump, and Apple has implemented a wireless connection to the iPad where by the iPad shows up in your Finder under Shared Devices. Thereby allowing one to transfer files wirelessly.
@Sean, All of which require another computer.
I still don’t see anything that says you can use the iPad as a stand-alone device without another computer. At the very least, don’t you need another computer for initial setup? I can setup and use my MacBook without ever needing to connect to anything else, but that does not seem to be the case with the iPad.
@John B, I don’t see it necessarily as the only computer, but it would still have the potential to replace the second, third, etc.
Peace,
Gene
@John B,
Is the iPhone a stand alone device? Yes, because you can download via 3G access or from borrowing a public Wi-Fi access such as at Starbucks.
The iPad is equally stand alone because it has the same access. Does Apple want a Halo effect working as it did for the iPod and iPhone? Naturally, but this is not essential.
Many people have needs so low that they will not need another computer. $629 for the cheapest iPad w/3G and $15 per month for access will be fine for them. I find myself tempted by this offer.
Of course, I have my iMac in the living room, so I can borrow its 802.11/n Wi-Fi connection. The $500 iPad would be great in bed or while I’m working out on the treadmill. The latter gets rather boring.
A minor disagreement, John B. The iPad will be a stand along computer for many people. They will be syncing to the Web — MobileME. They will be able to download, via Wi-Fi. It is simply that their needs will be small and their anti-tech biases are large. It isn’t they that are dumb: they just have different interests.
How about the iPad cannibalizing the netbooks PC?
@Jocca, That’s a given. 🙂
Peace,
Gene
Gene-
Thanks for the reasonable reaction to the iPad. Aside from you and a few other rational writers, I think the iPad is being over analyzed: it is simply a well thought out device for its intended purpose. When I visited the East Coast several years ago, my friend was wirelessly surfing the web will watching TV and I thought that was odd . A year or so later I was doing it too and I also began to read the news in the morning on my laptop. In both cases, the laptop I was using was clearly overkill and this is even more true today with my MacBook Pro. I also noticed that when my wife read the news on her laptop in the morning we had a pretty substantial wall of monitors between us. It was at that moment I realized that iPad would be a much better form factor and power factor for our casual computer activities. I can’t say how the iPad will affect MaBook sales but I can tell you as the owner of MacBook Pro, I will likely get one as a supplement. I can also imagine my wife getting one, finances permitting. I offer for your consideration the possibility that many homes will end up having 2 of these functional devices and this may off-set any loss of MacBook sales but someone else will have to run the numbers to test this hypothesis. I also suggest that the iPad may be the tip of the iceberg in terms of PC design. Once these little iPads do become powerful enough for more advanced computer needs, the real limitation becomes screen real estate. I am guessing in the near future we will also see a monitor dock for the iPad. The monitor will be larger and house the iPad and the CPU of the iPad will be the brains. It is also possible that the monitor could come with its own GPU such that the iPad CPU can take advantage of it. If I recall correctly, Apple filed a patent for this very arrangement within the past 6 years. Just trying to skate to where the puck will be!
Keep up the good work.