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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: RightOnline
Apple didn’t invent touch screens, GUI’s, WiFi, 3G (coming for the iPad), or tablet computers. The uses you list are all perfectly valid...yet what do you feel makes Apple’s product so revolutionary?

Interface, design, the App Store infrastructure, and a company that's able to negotiate with book publishers as it has with music and movie rights holders. The whole package smaller and not much heavier than a glossy magazine.

Henry Ford didn't invent the internal combustion engine, Gutenberg didn't invent the written word, Philo Farnsworth didn't invent the cathode ray tube or radio waves, Tim Berners-Lee didn't invent hypertext.

That's what Apple does. It takes existing technology and makes it usable. The iPod wasn't the first MP3 player, and the iPhone wasn't the first smartphone; they were just the first that weren't a chore to use.

You're quick to dismiss that, but why hasn't Microsoft, HP, Dell, Toshiba, or any other Windows-based version managed it in more than a decade of tablet PCs? It took the company that first popularized the mouse/pointer interface paradigm to realize that mobile devices needed a new one.

Any other manufacturer would have their head handed to them for offering a product that WILL be really useful...eventually.

Utter nonsense. The personal computer was something that would be useful eventually. The CD-ROM was something that would become useful as soon as there was software published on it (I still remember installing software that came on a tall stack of floppies). DVD and Blu-ray players would become useful when movies became available to buy or rent. Webcams would become useful when the people you wanted to talk to also had webcams. E-mail became useful when your friends got e-mail addresses.

Windows-based tablet computers would become useful when ... actually, we're still waiting for that. When they come up with a close-enough approximation of the iPad, I suppose.

181 posted on 04/08/2010 11:42:06 AM PDT by ReignOfError
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To: ReignOfError

OK, few things. You admit there is nothing revolutionary whatsoever in the iPad. At least we agree on that. It’s a large format iPhone (without the phone) or iPod touch. That’s pretty much it.

Try composing a document on one (far cry from texting using the display ‘keyboard’). Try working on a spreadsheet. Try editing a movie.

It’s a device designed more to “receive” than to “send” or “produce”. Any other characterization of it is ....well, nonsense.

PC’s, other technologies you mentioned ...had clear uses, clear purposes. True, software and ancillary devices had to catch up, but they quickly did so for devices/platforms that offered true utility, true productivity.

Again, the iPad is kinda of a neat gadget, but I find the slobbering over it just silly. Apple could have made a revolutionary product; what they did was create yet another tablet with it’s whiz-bang touch interface that is so popular, all while offering far fewer features and capabilities than other, existing tablets.


182 posted on 04/08/2010 12:34:43 PM PDT by RightOnline
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To: antiRepublicrat

Oh no, it’s not CTP, that’s been in the mix for going on a decade now. The local print market is very competitive, and prices are down. I’ve been a print broker and have a general feel for what cost should be. They’re selling at cost. To keep the lights on and live to see a better day, I guess.

Trouble is, all the furniture and apparel manufacturers import as much or more than they produce domestically anymore, and so the offshore printers have gotten a foothold, and have begun to pursue not just tags and packaging for overseas sourced product, but domestic marketing materials and such.

The pricing pressure doesn’t look to be going away.


183 posted on 04/08/2010 3:29:25 PM PDT by RegulatorCountry
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To: rlmorel
"It is a matter of record that many of the men who built the industrial base of this country, while not the evil robber barons they were portrayed to be, were not squeaky clean shrinking violets, either."

Which is precisely my point. Compared to today's "capitalists", the "evil robber barons" of America's industrialization were "goody two shoes"sorts.

184 posted on 04/09/2010 3:10:09 AM PDT by Wonder Warthog
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To: Star Traveler
"And you'll notice that I already said that if someone breaks the law, that's one thing -- but other than that -- I absolutely don't care if they are the worst human being in the world, because it makes no difference to me, when I'm buying products from a company."

As I said, my moral and ethical standards are a bit higher, both as a customer and as a business type. As an example, my company sells high-tech gear for microfluidics. We were approached by a research group who were gearing up to do research on biotech which bears directly on a subject that would increase abortions. We told them, "no thanks, go elsewhere". Fortunately, my business partners have the same moral basis I do. Our decision was unanimous.

185 posted on 04/09/2010 3:15:41 AM PDT by Wonder Warthog
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To: Wonder Warthog
Well, that wasn't the point I was trying to make. The point I was trying to make is that the big and successful names in American industry were less like Aaron Feuerstein and more like Steve Jobs.
186 posted on 04/09/2010 4:08:18 AM PDT by rlmorel (We are traveling "The Road to Serfdom".)
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To: rlmorel
"The point I was trying to make is that the big and successful names in American industry were less like Aaron Feuerstein and more like Steve Jobs."

And I disagree that that was the case. Ford, Edison, Westinghouse, Morgan, etc. were none of them like todays MBA-driven businessmen, whose only goal is to add $0.02 to the stock price, no matter what the means used, and no matter the effects that doing so will have on their employees or their customers. They were FAR more like Feuerstein than Jobs.

187 posted on 04/09/2010 4:14:41 AM PDT by Wonder Warthog
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To: rlmorel
But the way it will be used may well be revolutionary.

I'm not a Mac person, but it seems to me that's the key right there. I've been following the iPad pretty closely, and it seems to me the "game changing" effect of the iPad is really going to be in the 4.0 OS that's coming for it, which will allow multi-tasking on the new iPads and newer iPhones. Then there's the "enterprise" features that have been built in including over the air provisioning and full encryption for all data on the device.

I work at a very large international bank and we're looking at how we're going to incorporate them into our environment, as well as the impacts to our web environment for our high-wealth clients and relationship managers that are already demanding to use them with our systems.

They're going to be evolutionary alright, no doubt about that in my mind, and I say that as a 25+ year PC guy.

188 posted on 04/09/2010 4:16:59 AM PDT by usconservative (When The Ballot Box No Longer Counts, The Ammunition Box Does. (What's In Your Ammo Box?))
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To: antiRepublicrat

“Actually, there are. Not much in the modern computing hardware, but in the design, materials and construction of the cases. That machined aluminum just rocks above all other laptops, period.”

I think you intentionally missed my point. Macs, internally, component for component, are so identical to PC’s that we can run Windows natively on them. Those components are there because of Windows, not Apple.

And while I never said Apple’s niche was little it is a niche that was unplanned. Remember the giant Bill Gates head at MacWorld? Jobs said back then that, “We have to embrace a notion that for Apple to win, Apple has to do a really good job.” That’s where I believe Apple, because of Jobs, began to embrace its niche. The box and the OS, however, would have to remain inseparable. A niche born out of necessity and they have embraced it nicely.


189 posted on 04/09/2010 6:37:40 AM PDT by Leonard210 (Tagline? We don't need no stinkin' tagline.)
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To: Wonder Warthog; Swordmaker
You were saying ...

We told them, "no thanks, go elsewhere".

Of course, you're talking about two different things here... one thing is how one runs a business from the inside of that business and the second thing is how the consumer buys a product from a business.

As I was saying, those things are related to how someone wants to run the business and it's their choice (as a business). If that business wants to have a CEO who is a miserable human being and is an asshole and is an SOB -- that's their "business" and it's not something that is related to society and it's not a legal matter -- and society should have absolutely nothing at all to do with imposing anything on that business in making that human being a "better person" or not. And if the guy is an SOB and the worst asshole in the world, as long as the laws are being followed -- it absolutely does not matter.

And if somone in a business wants to make sure their CEO says, "please" and "thank you" for everything he does -- and the principals in the business want to give "sensitivity training" for everyone so that if they say a "cross word" to anyone, then they have to go back for 10 more sessions in "sensitivity training" -- that's "their business" too... and I don't care -- one way or the other -- whether they are the most sensitive people in the world or they are the worst jerks in the world. It makes absolutely no difference to me as a consumer.

And the consumers are only interested in the product (and/or service) the value, whether what they get is worth it -- and that's it.

The principals can be the most sensitive people in the world, exceeding Jesus Christ himself -- or -- they can be the worst examples of humanity in the world, being worse than Satan, in how they treat other human beings -- it absolutely does not matter to the consumer -- as "how a business runs its internal affairs" is its own business. The consumer only cares about what is delivered to them.

NOW... if those factors "affect" the end product and make it less desirable "as an end product" and somehow that product is not as valuable any longer -- then "smart businesses" will adjust their "internal practices" to make sure that the "product that they deliver is the best product possible" in order to sell more to the consumer -- who doesn't care in the least how the business runs their internal affairs.

It's only the business itself that should have any say in how it runs it internal affairs -- whether anyone is the biggest asshole and worst example of humanity or not.

190 posted on 04/09/2010 8:12:15 AM PDT by Star Traveler (Remember to keep the Messiah of Israel in the One-World Government that we look forward to coming)
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To: RightOnline

“Again, the iPad is kinda of a neat gadget, but I find the slobbering over it just silly. Apple could have made a revolutionary product; what they did was create yet another tablet with it’s whiz-bang touch interface that is so popular, all while offering far fewer features and capabilities than other, existing tablets.”

I couldn’t agree more.


191 posted on 04/09/2010 10:52:26 AM PDT by Leonard210 (Tagline? We don't need no stinkin' tagline.)
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To: Leonard210

Thank you.


192 posted on 04/09/2010 2:55:25 PM PDT by RightOnline
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To: Star Traveler
"Of course, you're talking about two different things here... one thing is how one runs a business from the inside of that business and the second thing is how the consumer buys a product from a business."

Nope. My decisions, both as a business owner and as a consumer of products are both informed by my moral and ethical standards. There is no difference.

And that is why I will not buy Apple products. Period.

You can argue all you want for a totally amoral business standard, but the simple fact is that such an attitude is harmful to society. Which fact is well-testified to throughout recent history. The "pure-food-and-drug" laws came out of precisely such an amoral attitude. Lester Madoff is the most recent sterling example.

Your argument will be "but THAT was illegal"....but the answer to that is that the weakening of ethics eventually leads to criminality.

193 posted on 04/10/2010 5:44:09 AM PDT by Wonder Warthog
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To: Swordmaker
I have a very basic question, from a non techie.

Do you have to have a monthly contract to use the iPad?

Can you just use your existing internet subscription to down load stuff?

I am sure that many of you are laughing, but I know with the iPod you don't, but with the iPhone you do.

194 posted on 04/10/2010 5:52:49 AM PDT by codercpc
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To: Wonder Warthog; Swordmaker
You were saying ...

Nope. My decisions, both as a business owner and as a consumer of products are both informed by my moral and ethical standards. There is no difference.

There may be two "categories" of decisions on your part that are incorporated into one person, being that you're that person who does takes care of the (1) business operations, and then you're (2) a person who buys consumer goods (just like all other consumers) -- but they are still two completely different things. You are just saying that you're doing the one thing (#1) and the other thing (#2). The consumer (and the government and society at large) still has nothing to do with how that business is run, other than simply the laws that govern any "legalities" involved -- and that has absolutely nothing with a CEO being an SOB and an asshole and the worst specimen of humanity in the world, as far as how he treats people.

You'll notice that I said this of a "business"... of which you're talking about as one of those items ...

As I was saying, those things are related to how someone wants to run the business and it's their choice (as a business). If that business wants to have a CEO who is a miserable human being and is an asshole and is an SOB -- that's their "business" and it's not something that is related to society and it's not a legal matter -- and society should have absolutely nothing at all to do with imposing anything on that business in making that human being a "better person" or not. And if the guy is an SOB and the worst asshole in the world, as long as the laws are being followed -- it absolutely does not matter.

And if somone in a business wants to make sure their CEO says, "please" and "thank you" for everything he does -- and the principals in the business want to give "sensitivity training" for everyone so that if they say a "cross word" to anyone, then they have to go back for 10 more sessions in "sensitivity training" -- that's "their business" too... and I don't care -- one way or the other -- whether they are the most sensitive people in the world or they are the worst jerks in the world. It makes absolutely no difference to me as a consumer.

In your case, you said that you want to run the business a certain way -- and you'll notice that this is already incorporated into that statement -- in that a business can run thing any way they want -- either having an SOB and the worst person in the world as a CEO, or they can have someone who cries and sympathizes with everyone when they stub their toe -- I personally don't care how they run their business -- and if I were buying a product from you -- I wouldn't care, in the least, how you ran the business either -- I simply don't care.

AND..., you'll find that most consumers not only don't care, they don't spend two seconds even thinking about it, in the first place. LOL ...

Likewise for the "consumer end" of things, I also think it absolutely does not matter -- in the least, how consumers want to evaluate their purchases, as to how it looks, as to whether it smells good, as to whether it's made of metal or plastic, as to whether it's made here (or "there") as to whether the employees are happy or they are not happy -- it doesn't matter, in the least, how the consumer wants to evaluate his purchases.

AND..., you'll find out there, too -- that the vast and overwhelming numbers of consumers evaluate their purchases as to how it directly relates to them, personally, with their money, convenience, value, worth -- and whether they want it or not -- all having absolutely nothing as to what goes on inside the company.

BUT, if you, as a consumer wants to research all the companies for all those grocery items you buy on the shelves, and evaluate the company in terms of the toilet paper you buy, and evaluate and research the company and how they operate with their employees, for the toothpaste you buy, and evaluate the company for the hard drives that you put in your computer, and you want to research the company for that loaf of bread for that sandwich you make ... well, I'm glad you have all that time ... LOL ... and certainly go right ahead ... :-)

That's your perfect right as a consumer to waste your time with all those products that you buy if you want -- and even if you can ever find that out in the first place ... LOL ...

But, you'll find out that the vast majority of people only buy their products, goods and services, for themselves -- strictly on the basis of price, value, what they want and how it directly impacts them, personally at that very moment -- and not even a very small minority of people will ever research anything that a company is doing that made that product, good or service.


You can argue all you want for a totally amoral business standard, but the simple fact is that such an attitude is harmful to society. Which fact is well-testified to throughout recent history. The "pure-food-and-drug" laws came out of precisely such an amoral attitude. Lester Madoff is the most recent sterling example.

Very simply, society and our legislatures and legislators can make all the laws that they want to govern every single aspect of the business that you are doing and that others are doing. That's fine, because that goes through our political process and if the larger majority of people think that "such a thing" (whatever it is) -- needs to be made "legal or illegal" -- then so be it -- and the government is "going to tell you how to run your business" -- in that aspect of the law.

Now, I'll have you know that many here think that government should stay completely out of business -- but I take the view that businesses can do "anything they want to do" as long as it's legal -- and no one should interfere with their business.

And if society wants to interefere with their business and tell that business exactly how it should "conduct its business" in a certain area -- that's fine, because that will have gone through the political process and that means that the larger majority of the people in this society thinks that all businesses (at least in that area being "governed") should do things "exactly as the government tells them to do" ... :-)

Otherwise, everyone should "stay out of businesses" and let them do anything that they want to do.

AND..., I'll guarantee you that there's never going to be a law that says a CEO cannot be an SOB or the worst human being in the world. When our government starts telling businesses the "type of person" that a CEO must be -- that's when we've gone completely socialist and completely Marxist... just like the liberals and Marxists want us to do...

Sorry, there will always be CEOs who are the worst specimens of humanity in our society and yet they will be CEOs because they know how to get something done in business and they can make for a successful business. Nothing that you or society will do -- will ever change that... Consumers don't care, they don't know and don't even "want to know", and they wouldn't care, even if they did know... :-)


Your argument will be "but THAT was illegal"....but the answer to that is that the weakening of ethics eventually leads to criminality.

It's really something super-easy to handle -- if something is illegal and someone in the company does it -- send them to jail. That's all you have to do... nothing more needed.

But, however many laws you make and however much you want to "go socialist and Marxist" with businesses -- I'll guarantee you -- you'll never, in a million years -- remake CEOs into something that they aren't if you don't like CEOs who are SOBs, who are the worst specimens of humanity that you've ever seen and that they treat other people bad and even hollar at them and make others in the company afraid of them. Sorry, you're always going to have that with a CEO, when it requires a strong hand to run a company and get eveyone "in line" to get a product or service "out the door" exactly in the way require to make it successful.

That's why those kinds of CEOs can be very successful, because they get their company "in line" for what the goal of the company is.

If you don't like those kinds of CEO's -- well that's too bad, because they're not going to go away... sorry to disappoint you.

195 posted on 04/10/2010 7:37:52 AM PDT by Star Traveler (Remember to keep the Messiah of Israel in the One-World Government that we look forward to coming)
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To: ctdonath2
Why would you assume anyone has to plug a mouse into anything?

A laptop is a laptop. A touchscreen tablet is a touchscreen tablet. Now, if you want to talk about the superiority of a capacitive feedback touchscreen do it, but don't make up bogus comparisons to try and make a point about Apple superiority.

196 posted on 04/10/2010 7:57:22 AM PDT by Solson (magnae clunes mihi placent, nec possum de hac re mentiri.)
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To: Star Traveler
Apple didn't do that, Xerox did. Apple and Microsoft saw WYSIWYG and copied it on their platforms and succeeded in mass market use.

But let's be real about where WYSIWYG came from...and it wasn't Apple.

197 posted on 04/10/2010 7:59:59 AM PDT by Solson (magnae clunes mihi placent, nec possum de hac re mentiri.)
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To: codercpc; Swordmaker
You were asking ...

I have a very basic question, from a non techie.

Do you have to have a monthly contract to use the iPad?

It can go "either way" depending on how you buy it. It can be without the AT&T monthly connection for the Internet (by way of cell phone towers, the same network as the phone service) -- or -- it can be used by way of WiFi (either yours at home or any WiFi service that you want to use, that you get yourself, too).

Right now they started selling the WiFi-only version and then the cell phone Internet version is coming out next.

The one right now, when you buy it, that's all there is... no monthly charges. And with the next one released, it will have a monthly charge through AT&T for only the Internet service, itself (no "talking" ... :-) ...).


Can you just use your existing internet subscription to down load stuff?

I am sure that many of you are laughing, but I know with the iPod you don't, but with the iPhone you do.

Yes, you can use your own at home (it's through your own WiFi at home, then), or you can go to the library, or coffee shops or restaurants or you-name-it, wherever the public gets WiFi "out and about" as they drive around.

For example, just on this one street that I'm close to (in Tulsa) in the Brookside neighborhood (S. Peoria), there's a library, a car wash, a coffee shop, Kentucky Fried Chicken, Mazzios Pizza -- all with free WiFi. And if you wanted to, you wouldn't have to "go in" to any of them, and just park right outside in the parking lot and get your signal and do what you had to do -- and then drive on from there... :-)

The iPad that is WiFi only, will work the exact same way (for Internet connections) as the iPod Touch works, if that helps one understand how it functions... :-)

198 posted on 04/10/2010 8:04:23 AM PDT by Star Traveler (Remember to keep the Messiah of Israel in the One-World Government that we look forward to coming)
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To: longtermmemmory
You can look at the Asus T91 or wait for their Asus T101 or look at the Lenovo touchscreen. If all you want is Media, basic internet access and touchscreen, then you can look at Internet Media devices - all touchscreen or look at the Archos tablets for starters.

I like the iPad but for the same money, I will go with the Lenovo tablet netbook primarily because it can run more than one app at a time and will work better with the main programs I need while traveling. The batter life is about 9 hours...good enough for me.

I suspect the iPad will, in the next one-two releases come down in price and meet some of other requirements I have. And then I will buy one.

I love the iPhone but haven't bought one because I refuse to switch to AT&T. And now...the Nexus One and Droids are better than the iphone functionality and the apps are coming fast and furious. So...the refusal of Apple to allow multiple carriers may be its downfall. MAY being the key word...

199 posted on 04/10/2010 8:10:06 AM PDT by Solson (magnae clunes mihi placent, nec possum de hac re mentiri.)
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To: Solson; Swordmaker
You were asking ...

But let's be real about where WYSIWYG came from...and it wasn't Apple.

Well... actually, you're mistaken there, because Apple was working on that development in their own computer before anything that they saw at Xerox.

Now, Xerox and Apple were working from some "common information" even before either of them -- but Apple was already working on it without any connection to Xerox, and Xerox had been working on it, too.

And then, later, after Apple had worked on theirs for a while, Jobs was told about the Xerox project and he got permission from Xerox, and paid them handsomely to see how far along they were, as compared to how far along Apple was.

So, Apple had already been working on it themselves, and later on, they took at look at Xerox and paid them (what turned out to be millions of dollars) for just a "look" at it and a "demonstration" -- that's all... LOL ...

AND THEN..., in the end -- Xerox did nothing with it. And Apple went forward with their own work and did what you have now.

And then later, Microsoft copied Apple.... :-)

200 posted on 04/10/2010 8:21:38 AM PDT by Star Traveler (Remember to keep the Messiah of Israel in the One-World Government that we look forward to coming)
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