Apple Ushers in the iPad -- Can It Live up to the Hype?

Posted Jan 27th 2010 2:30PM by Melly Alazraki
Filed under: Products and Services, Launches, Apple Inc (AAPL), Marketing and Advertising, AT and T (T), Nokia Corp. (NOK), Sony Corp ADR (SNE), Research in Motion (RIMM)

About an hour ago, Apple (AAPL) finally unveiled its much anticipated and rumored tablet computer -- the iPad. For the past couple of years, many wondered why Apple never got into the netbook market. Steve Jobs, Apple's founder, CEO and visionary explained that netbooks simply are not better than laptops. The iPad, however, according to Jobs is.

Specs, from Engadget: The Apple iPad weighs just 1.5 pounds, and has a 9.7-inch touchscreen LCD display. It's running Apple's own 1GHz "A4" chip, with a 10-hour battery life and a month of standby. It'll come in three sizes and prices points: 16GB -- sold for $499, 32GB -- sold for $599, and 64GB -- $699.

There's a 30-pin Dock connector, a speaker, a microphone, Bluetooth, and 802.11n WiFi, as well as an accelerometer and a compass. It can run iPhone apps and has built-in apps that are more similar to Mac apps. For WiFi+3G the price points are $629, $729 and $829 and seems that only AT&T (T) will carry it -- at least according to the latest info.

Some have already noted the iPad looks simply like a giant iPhone, while others can't stop wowing. Some think it will save print media, while others question Apple's pricing controls as the company did on iTunes with the music industry. But the question that is of relevance to investors most is -- will it sell? How many? How will it affect Apple's revenue, earnings and growth?

Apple positioned the iPad in the space between the smartphone and the laptop, saying it has to be better at tasks like browsing, email, photos, e-books, and videos than both. Perhaps, but it all depends on the pricing and whether it can indeed supply that space with a device that will be popular with consumers -- establishing a third category of products.

It seems the answer to that is a resounding'"yes." Apple shares, which were down about 1.5%, before the prices were announced, are now up over 1%. Shares of rival Nokia (NOK) are up 1.1%, Research in Motion (RIMM) up 1.6% and Sony (SNE) are down 2%. Meanwhile, AT&T shares are up 1.5%.

Tags: aapl, featured, ipad

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Reader Comments (Page 1 of 1)

1-27-2010 @ 2:37PM

e.krabs said...

I've been keeping track as well, and unfortunately, they've only confirmed my worst fears. This thing really is as big as it was rumored to be.

I've also skimmed a few tech sites for reactions. The most positive reaction I've seen so far is the price!

So, will it sell? Yeah, I think they will sell some. Is it the next breakout product akin to the iPhone, iPod, or iMac? No.

1-27-2010 @ 3:41PM

Mitch said...

Watching the short term (stock market) reaction to the announcement is a completely useless indicator - analysts wouldn't know tech if it hit them in the head.

Will the iPad be a success? Obviously, it depends on how success is defined.

As with most Apple products, seeing one in person & using it is where the rubber hits the road.

$499 starting price is encouraging.

I'm long in AAPL.

1-27-2010 @ 11:39PM

JackSprat said...

Just some quick comments about this product. I've been looking for an E-Reader lately and do believe they have a future in today's market but I think Apple and other companies need to be aware of a few things to avoid a crash and burn with this product.

--- Price point needs to be lower than $200. Why? Because you can buy a semi-decent laptop for $300 these days. Yes, an E-Reader is more portable and suited for its purpose but you're going to have a hard time convincing Joe Consumer to fork out $500 when he could buy a pretty darn good laptop that isn't much different in size and do the same digital reading as well as all the added benefits. Sony experienced this same problem with their Playstation 3 in the first few years of its release. When it was price pointed at $500-$600, no one touched it. Why buy a fancy schmancy video game console that promises so many computer features when you could just buy a computer?

--- They need to lower the digital price from the publisher cover price. I guess it's the norm in movies and video games to keep the price fairly equal to the retail product but in an entirely new industry such as this where you are trying to convince people to give up their free websites, used book stores, and other bargains, you REALLY need to entice them with something that makes it worth their while.

--- Another key will be publisher availability. Maybe Apple can corner the market quickly considering its already vast resources on media sharing, but a consumer needs to know that he or she truly can download their favorite newspaper, magazine or book without much hassle. I know Sony and Amazon have their own competiting products and Sony owns its own media outlets, so the sooner these companies agree to stop exclusive distributor rights, the better. HD-DVD and Blu-Ray killed each other in their early days with their movie distributor right wars.

--- Besides obvious issues like easy downloading software, I think the biggest winning technological component will simply be which device least hurts your eyes. My eyes start hurting if I read too much on LCD monitors so I can only imagine what will happen with some of these new E-Readers. I like how Apply is going color because to be a true E-Reader, they need to capture pictures so that they can feature all media, but I wonder what the trade-off is from the "easier on your eyes" Kindle display from Amazon?

Anyways.... I see there is a future, but I wouldn't go buying Apple stock anytime soon unless you're looking to capitalize on the short gain. It's going to be a few years before we truly see who wins the E-Reader wars and if it has a future.