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Why the iPad will Flop
Seeking Alpha ^ | 04/04/2010 | Alex Cook

Posted on 04/07/2010 3:12:46 AM PDT by Swordmaker

I don’t get it. It costs $500 for the basic model, when you could get a laptop with a lot more functionality for about the same price. The iPad hype machine has been in full effect this week, and I still think it’s just that—hype.

As I wrote previously, nobody has ever made a commercially successful tablet computer. The iPod was not the first portable MP3 player, but it was the first that got widespread appeal for its simplicity and superior storage capacity for the cost. The iPhone was not the first smartphone, and it still faces fierce competition from rivals at Research In Motion (RIMM) (the maker of the BlackBerry), Nokia (NOK), and HTC.

While mainstream media has been ecstatic about the iPad (it made the cover of both TIME and Newsweek), it’s been blasted by tech critics. Gizmodo, one of the most popular tech websites, wrote their analysis with a succinct headline: “8 Things That Suck About the iPad.”

What is this thing?

So, why then is there so much hype? It’s not just a rhetorical question. For one, even if you are not a Mac user, everyone loves Steve Jobs. He has been a visionary in the computing industry and made computers accessible to the masses with the old Apple II. Steve Jobs also turned Apple around completely from the 1990s, a time when an old computer science professor of mine said that “Apple tried really hard to go out of business.”

That said, Steve Jobs has been wrong before. One of his earlier projects before he was ousted as the Apple CEO (and obviously before he was re-hired later) was the Apple Lisa. It was a computer built in 1983 with a graphical user interface and features now associated with a modern computer—significantly ahead of its time in 1983. Unfortunately, it was horribly expensive and ended up as a commercial flop.

The iPad could be even worse. At least the Lisa was ahead of its time. The iPad isn’t ahead of anything, but it’s certainly expensive. Tablet computers didn’t flop when HP (HPQ) was making them because HP lacked vision or creativity; they flopped because tablets were a bad idea. They’re not as useful as a laptop, and they’re not mobile enough or cheap enough to replace a smartphone—and of course, they can’t make phone calls.

In short, tablets try to fill a niche that doesn’t exist.

What I find most amusing about this is the talk that the iPad will “save the media industry.” No, it won’t. It is just another means to distribute media. If customers are not interested in watching something on a computer, they also won’t be interested in watching it on a tablet. As far as the iPad being a “Kindle Killer”, that may be so, but both Kindle and the iPad are competing against another format for books, called paper. I don’t buy the iPad hype. Analyst expectations for iPad revenue are way overblown. If I turn out to be wrong, I’ll gladly eat my words, but I’m pretty sure that I’m not wrong.

Update: Here's David Letterman's take on the iPad. Watch the whole thing; he nailed it:

Letterman's Take.

Alex Cook is a graduate of the UNC and studied economics. In college, he founded Tar Heel Business, a print and internet publication focused on business and economics. Alex now writes for frontieroutlook.com. Check out that site for macroeconomic trends and investment ideas.


TOPICS: Business/Economy; Computers/Internet
KEYWORDS: ilovebillgates; iwanthim; iwanthimbad; microsoftfanboys
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To: Betis70
BTW I run Win XP, 7, OS X, Solaris, and Debian Linux on my various machines.

Actually I run most of these via Parallels, on my Core i7 iMac. Only requires one machine.

101 posted on 04/07/2010 12:30:06 PM PDT by itsahoot (Each generation takes to excess, what the previous generation accepted in moderation.)
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To: Swordmaker

You wanted harder evidence. I gave you some.


102 posted on 04/07/2010 12:34:28 PM PDT by Dead Corpse (III, Oathkeeper)
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To: itsahoot

Not real good to sabotage a quarter million dollar lease deal.


103 posted on 04/07/2010 12:35:10 PM PDT by Dead Corpse (III, Oathkeeper)
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To: Dead Corpse

I’m with Swordmaker: a few anecdotes don’t make for viable statistics.

I’ve owned one Dell: sent it back 6 times. May mean I won’t buy Dell again, but isn’t a deciding point for you.


104 posted on 04/07/2010 12:38:46 PM PDT by ctdonath2 (+)
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To: ctdonath2
I ordered 200 Dell Optiplex workstations for a company I was Sys Admin for.

Sent 4 of them back.

I currently have about 90 HP/Compaq workstations and 1500 Macbooks. Servers are a mix of HP, Dell, and XServ.

Apples don't have a magic bullet against hardware failure and aren't any better than any other manufacturer.

105 posted on 04/07/2010 12:41:22 PM PDT by Dead Corpse (III, Oathkeeper)
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To: Dead Corpse
You wanted harder evidence. I gave you some.

That not evidence... that's an anecdote.

106 posted on 04/07/2010 12:42:15 PM PDT by Swordmaker (Remember, the proper pronunciation of IE isAAAAIIIIIEEEEEEE!)
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To: Tribune7

floppies died on their own.

Just as teh SD will die.

Just as teh microSD will eventually die

The problem with tablets is the fact they don’t do the screen keyboad well for human design.

the ipad seems more a toll road than a power to the people.


107 posted on 04/07/2010 12:44:48 PM PDT by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
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To: RightOnline
750,000 sold in 4 days at >=$500 a pop. $375,000,000 and rising fast. Sell just 4700 per day for the rest of the year and they're at $1B revenue.

Sorry, how big a bonus were you going to give those engineers?

BTW: the JooJoo, an equivalent Linux-based device, was just released. It costs $499 as well.

108 posted on 04/07/2010 12:47:00 PM PDT by ctdonath2 (+)
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To: Swordmaker

Want to see my RMA paperwork?


109 posted on 04/07/2010 12:48:55 PM PDT by Dead Corpse (III, Oathkeeper)
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To: Star Traveler

I guess my ethical and moral standards are a bit higher than yours. Managers with Jobs “win by any means necessary” attitude are a big part of the reason that our latest economic problems have happened.


110 posted on 04/07/2010 12:55:13 PM PDT by Wonder Warthog
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To: All

ok where are the other tablet companies products?

there was that image of an indian company with a tablet.

There was windows with the touch surface table.


111 posted on 04/07/2010 12:58:05 PM PDT by longtermmemmory (VOTE! http://www.senate.gov and http://www.house.gov)
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To: Wonder Warthog
This may help him be a "successful" capitalist, but I refuse to do business with folks of that sort.

And you have no problem with the thieveries of Bill Gates.

112 posted on 04/07/2010 1:11:32 PM PDT by itsahoot (Each generation takes to excess, what the previous generation accepted in moderation.)
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To: Star Traveler; stripes1776; All

Let’s be clear on one point....again: I’m NOT anti-Apple.

However, don’t confuse marketing hype/buzz with capability. Apple has a real knack for causing buzz; they’re the “hip” technology provider, to be sure. They are innovative and place an emphasis on design and user interface. Not a thing wrong with that.

Still, they must exist in a world of existing products/technologies, and to arbitrarily eliminate some of these basics (don’t just take my word for it; look at many online reviews) seems irresponsible, at best. You point to sales figures alone as proof of their “genius”. No doubt that unit sales count a lot.....but don’t tell me it equals technological superiority.

After 26 years in the business, I sure as hell know better.

Let’s see how happy these folks are in six months when iPad II hits the stores for a couple hundred less and with far more capability. If that doesn’t happen, I will eat my hat.

Remember Apple sending “rebate” checks to all the poor saps who bought iPhones ....only to see the iPhone 3G come out a short time later with more capability at half the price?

Same thing. Just watch. Not wishing ill on them or anyone else; they have track record.


113 posted on 04/07/2010 1:14:13 PM PDT by RightOnline
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To: Leonard210
but much of the computer industry simply shrugs and says, “Er, pretty, but I can do that on my PC.”

I actually heard that statement in a computer store a few years back, after a little demo on the Mac. I can do that on my PC The next sentence was very telling though. "Of course it would take me a couple hours....."

114 posted on 04/07/2010 1:18:05 PM PDT by itsahoot (Each generation takes to excess, what the previous generation accepted in moderation.)
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To: Leonard210

From a simply computer standpoint you are correct, mac machines are nothing spectacular on the inside, while they do have the “cool” factor down and a very high price premium apple PCs really bring little to the table beyond their physical designs at the hardware level.

There really isn’t a huge argument to own a Mac computer over another brand for most users. The OS is superior, though the aqua interface has pluses and minuses vs the MS alternatives. In fact many of the things Windows is touting as making 7 simpler are right out of OSx graphical interface. At the PC level, Macs are for the cool niche players more than anyone else.

The interface though, this is where apple generally shines, and there is no doubting that the user experience create by apple with the iPhone/iPod touch has completely changed how humans interact and expect to interact with electronics. Do drill down menus with a mouse and cursor or touchpad and cursor work? Certainly, but they are nowhere near the intuitiveness and elegance of the multitouch display.

iPad is not simply a tablet computer, it is a tablet computer that is extending the iPhone interface/paradigm to the portable computer. If this is successful, iPad will be far more than a “cool” gadget, but will become the market leader in a brand new segment, if it fails it will be an interesting discussion piece 30 years from now.

I admit the iPad hasn’t proven itself yet, but it certainly has the parts to be a very very significant whole. Touchpads, mice and drill down menus (at least the style most computer users are accustomed to today) may become “quaint” concepts of another time for most users.

Time will tell whether or not its a win or a dud... I suspect that if it works remotely as billed, Apple will become a market segment leader in the tablet space.


115 posted on 04/07/2010 1:28:05 PM PDT by HamiltonJay
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To: HamiltonJay

Anyone besides me remember HPs touchscreen computer in the mid 80s.

Just a touch before its time, I guess.


116 posted on 04/07/2010 1:33:47 PM PDT by dmz
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To: RightOnline

I won’t argue your points, but people upset that the 3GS cost less and does more than they paid for their original 3G iPhones didn’t dump Apple, they upgraded to the 3GS immediately or did so when their contracts expired.

Early adopters for the most part know what they are getting in for.

The hardware isn’t what makes the iPad interesting, its the user experience that hardware is built to provide that makes the iPad a potential game changer.

6 months ago I would have looked at the entire concept of the iPad and laughed at it as nothing more than hype, today I see that this could indeed prove to be something important. What changed in those 6 months? I upgraded my antiquated old flip phone and got an iPhone.. It took that for me to finally get the hype around the thing. Up until I was actually using one I thought of them as nothing more than toys, now I get it.

I won’t deny Apple is about coolness and hype, and no I’m not running out to buy an iPad, unless of course I come up with a nice idea for an APP, since I did purchase all the infrastructure to develop iPhone apps as well shortly after getting my phone. However, it definitely could prove itself to be a game changer, not because its technically an impressive device at the hardware level, but because it takes the proven user experience of the iPhone and puts it on a portable PC... that definitely has the potential to change things.

Time will tell if it does or not.


117 posted on 04/07/2010 1:36:57 PM PDT by HamiltonJay
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To: dmz

I remember all sorts of things, including seeing an IBM Color laptop, that IBM later decided to scrap because they concluded no one needed a color display on a laptop.

Timing is important, and Apple may have lightening in a bottle, or just another failed try... I can’t say which it will be, but I can say I see the potential is there.


118 posted on 04/07/2010 1:38:55 PM PDT by HamiltonJay
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To: Dead Corpse
Not real good to sabotage a quarter million dollar lease deal.

Not for Apple, but maybe the IT guys want to buy somewhere else. I was being </sarcastic>

119 posted on 04/07/2010 1:41:01 PM PDT by itsahoot (Each generation takes to excess, what the previous generation accepted in moderation.)
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To: HamiltonJay
"...it takes the proven user experience of the iPhone and puts it on a portable PC..."

Understood....but not to pick at ya or your points, but let's discuss this sentence in your reply (excerpted above).

Is it really a PC? Not in my opinion. Now, if they made it available with a version of OSX, absolutely. No one can say that the iPhone and iPad OS's are remotely close to OSX (a fabulous OS, by the way)in terms of capability, apps, etc. So, it's not a phone, to be sure, and it's not really an e-book reader, and it's certainly not a true PC/Mac replacement....so what the hell is it?

To me, it's a solution in search of a problem.

120 posted on 04/07/2010 1:43:51 PM PDT by RightOnline
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