Market research firm ABI feels pretty confident we're on the cusp of a tablet frenzy that will see the number of units shipped catapult from 4 million in 2010 to 57 million annually in 2015.
"Apple's iPad is not the first media tablet," said senior analyst Jeff Orr. "But it does help define this new device category. The main focus of media tablets is entertainment. A tablet will not replace a notebook, netbook, or mobile phone, but will remain an additional premium or luxury product for wealthy industrialized markets for at least several years."
It's worth noting that ABI Research defines a media tablet as having a touchscreen interface 5-11 inches in size, Wi-Fi connectivity, and video and gaming capabilities.
But no matter how you define them, will tablets remain relevant in the years to come? With Apple on board and Google not far behind, it's very likely. Then the question becomes, is there enough room for all these portable devices? Netbooks, e-book readers, and smartphones have proven that there's room for all three, but it will be interesting to see if the same holds true for tablets, or if one of these market segments end up falling by the wayside.
It's been nearly a week since I last reported about Apple's reluctance to allow its users access to the Flash platform. Apple--and Steve Jobs himself--have reportedly claimed that the instability of Flash was the driving factor behind Apple's ripping of this app straight off of its mobile devices (including the brand-new iPad) in favor of an HTML5-based solution for interactive content.
Although Adobe seemed to be letting Jobs' alleged tirade against Flash earlier this week go unanswered, ‘twas not meant to be. Adobe CTO Kevin Lynch has since responded in the company's official "Executive Perspectives" blog. I'm not much of a betting man (nightmares of CES losses haunt me to this day), but perhaps you are: Just which way do you think Lynch points the finger of blame for Flash's absence on--quote unquote--"a recent magical device."
Forget any preconceptions you may have about Apple's iPad, because it's not all fun and games, though that certainly helps. According to Forrester Research, the current talk of the tablet world has a good chance at catching on as a business tool for mobile professionals.
"This thing will take off among high net worth mobile pros," said Ted Schadler, an analyst with Forrester Research. "And IT should be okay with that, at least in non-regulated industries where the lack of application management and device control tools are not big issues. After all, iPad is really just a big iPhone."
It's worth noting that mobile professionals comprise 28 percent of the enterprise workforce, and it's these very individuals who are likely to be attracted to the iPad to use on the road as they travel from their company's headquarters to remote offices. In addition, Schadler believes some enterprise workers will opt to take their iPad in place of their work-sanctioned laptops.
Whether you're a fan of Apple's recently unveiled iPad or not (and judging by the reader comments, many of your are not), you were probably expecting the tablet to cost much more -- maybe even twice as much -- than the entry-level unit's $499 price tag. As it turns out, Apple stands to make $208 on every $499 iPad sold, giving the company headroom to drop the price if the market (and competition) dictates.
That's according to a bill of materials (BOM) analysis by Brian Marshall of BroadPoint AmTech. According to Marshall, individual parts inside Apple's 16GB Wi-Fi-only iPad adds up to $270.50, which includes a $10 line item attributed to manufacturing. Factor in another $20 for warranty service, and the bottom line comes to $290.50, leaving $208.50, or a nearly 43 percent profit margin.
"If [Marshall] is right, this shows that there's room going forward for Apple to reduce the price of the iPad," said Ezra Gottheil, an analyst with Technology Business Research. "I think the $499 price point is very aggressive, but if they dropped [the price] it would really put the iPad in the netbook range. At a lower price, consumers will have to decide waht they want for a portable work and play device, a netbook or get an iPad."
The profit margin's even wider on the 16GB iPad with Wi-Fi and 3G, which Marshall estimates runs the company $306.50 to produce but will sell for $629. The end result is a 52 percent profit, a number videogame console makers can only dream of.
It may have taken a long while for Apple to finally introduce the iPad, but now that it has, expect every other tech company to try and cash in on the tablet mania. Everyone except Acer, that is.
According to Acer Taiwan president Scott Lin, the always confident and frequently outspoken OEM isn't planning on tossing its hat into the tablet ring and going toe-to-toe with the iPad. Instead, Acer is content to focus on ultra-thin notebooks in 2010.
It's not that Acer couldn't build a tablet, says Lin, The issue, he says, is that such a product doesn't have a place in Acer's business model. Not only that, but Acer appears to have little interest in designing an online store similar to Apple's iTunes ecosystem to support a tablet device.
The big question then becomes, 'What kind of impact will the iPad and similar devices have on the ultra-thin notebook and netbook markets?' And the answer, according to Lin, is not very much, since they each target different consumer groups. Whether or not that's really the case, we'll find out as 2010 marches on.
Love it or hate it, the $499 entry level iPad is much cheaper than anyone expected. Tablet PC makers which were hoping to ride the wave of enthusiasm Apple was bound to kick up, are now being forced to step back and really question if they have what it takes to compete. Unnamed sources from within Asus and MSI claim they were counting on an iPad that would debut at $1,000 or more, making room for a more powerful and open device for $200-$300 less. Now that the new price to beat is less than half of what they expected, they will need to determine how they will differentiate if they can't win on price.
Apple made a lot of questionable decisions in the design of its new tablet, but its difficult to argue with their business intuition. They clearly understand that in order to create and hold on to early adopters, they will need to lock as many people as possible into the iTunes application ecosystem, even if that means sacrificing their usual fat margins to do it. They are willing to risk making a small profit on the entry level device with the hope that they might convince you to upgrade to a more expensive model when you reach the store, and if all else fails, make up any lost revenue when you come back for accessories or hit up the iTunes store.
The iPad has some pretty serious limitations, sure, but can a $500 tablet PC running Windows 7 really take on Apple?
Don't count Nintendo president Satoru Iwata among the Apple faithful ready to snatch up an iPad as soon as it becomes available. Judging by the majority of reader comments in our news coverage earlier this week, Iwata's as unimpressed with the tablet as the rest of you.
"It was a bigger iPod touch," Iwata said. "There were no surprises for me."
Iwata, who one could argue knows a thing or two about tech trends, is equally dispassionate about the concept of 3D gaming, so it's probably safe to say you won't be seeing Super Mario jump out of your TV set anytime soon.
"I have doubts whether people will be wearing glasses to play games at home. How is that going to look to other people?," Iwata said at a Tokyo hotel.
Probably no sillier than Alec Baldwin waving around a Wii remote in this SNL sketch.
Speaking of motion controls, Iwata put to rest speculation in the Japanese media by denying rumors Nintendo is working on a DS-equipped motion sensor similar to the one used with the Wii, while adding that the company is not working on a Wii upgrade for high-definition television sets.
It doesn't matter that the newly announced Apple iPad tablet won't be available for another two months (three months for the 3G models), vendors have no intention of waiting to cash in on what's destined to be a hot selling product.
Take iLuv, for example, who on Thursday unveiled a new line of colorful cases and sleeves. For $20, the company is selling water resistant neoprene sleeves for the iPad available in a variety of colors and graphic designs, but that's not all. iLuv has whipped up an assortment of iPad products, including a line of silicone cases ($25), flexi-clear cases with dot wave patterns ($30), ultra-thin cases with Tatz graphics ($35), fabric cases, leather cases, protective films, and more. Check out their full line of iPad accessories here.
iLuv isn't the only one ready to cash in on the iPad craze. Kroo also recently announced a variety of iPad cases under the company's Melrose, Glove, Envelope, Milan, and Cube series.
As we get closer to March 27th, the day the iPad becomes available, expect to see a lot more companies come out of the woodworks toting their Apple tablet wares.
The first part of a typical Apple product launch is out of the way now. During the second leg, skeptics will grudgingly make one final attempt at understanding the device just as fanboys get better at pretending that they know pretty much everything they need to know. Both sides can now also factor in the newfangled prospect of making VoIP calls over the iPad's 3G connection when making their case.
Apple today updated the iPhone developer SDK to accommodate VoIP apps. The move was accompanied by the launch of iCall, the first and only VoIP app for the iPhone and iPod touch. The announcement leaves us with one question, though. Will the iPad support VoIP apps out of the box? There is little reason why it shouldn't.
Apple's ban on VoIP functionality riled many feathers while it lasted. The company's refusal to allow Google Voice to run natively on the iPhone wrecked its relationship with Google, which eventually launched a browser-based HTML 5 app to circumvent the ban. Ironically, VoIP functionality comes to the iPhone barely 24 hours after the launch of the web-based Google Voice app.
It is not clear how this fresh development impacts the hitherto unapproved Google Voice app, which Google claims is not a VoIP app. It uses the carrier's voice network to make phone calls and not the internet connection.
Regardless of how you feel about the newly announced iPad, it’s probably going to do a few things very well. But will it be the reading device we’ve all been waiting for? Steve Jobs pushed the iBook store in the keynote, and discussed how the Kindle pioneered ebooks. Jobs then said Apple would “stand on [Amazon’s] shoulders”. Can it work?
The obvious benefit of the iPad is that it has a color screen. There will be more options for text size, search, and even font choices. Magazines and newspapers will look nice, but reading an old fashioned book may not benefit much. The Kindle and other eReaders have a 16 level eInk display meant to be easy to read. The screen on the iPad, being a conventional LCD, may not be quite so easy on the eyes.
Content wise, the iPad may be in good shape. Out of the gate it will have content from Penguin, Simon & Schuster, Macmillan, Harper Collins and Hachette. It will also support the open ePub format, which is more than we can say for Amazon. This means the iPad will have access to Google Books. The Nook has ePub support also, so it’s not a total win for Apple.
Price is certainly of concern. The iPad is clocking in at $499 for the 16GB version sans 3G. That’s quite a bit more than the Kindle and Nook at $260. To get data on the go, you need to purchase an AT&T data plan for the (more expensive) iPad, whereas the Kindle and Nook come with free wireless. Granted, the iPad does much more than eBooks, but buying it primarily as a reading device may be a questionable move.