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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: RegulatorCountry

What about the lack of “standard” interfaces...USB, firewire, etc.? Just nuts.


21 posted on 04/07/2010 5:00:40 AM PDT by RightOnline
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To: RightOnline

Do you have a USB port on your cell phone, your camera or your video recorder? No, you plug them into a USB port. Do you need Firewire on a USB device, especially one that is 3G? What is Firewire? What purpose does it serve away from your network, or somebody’s network? To what network does a 3G device belong?

You’re locking yourself in to existing assumptions. How can what *is* be configured, in a disruptive way that puts computing power into the hands of everyday people? That’s Jobs’ motivating philosophy, and always has been.

OK, so it’s a giant, wifi enabled iPod Touch, soon to be a giant iPhone without an official voice plan. Think about it. That’s been stated as if it were some sort of putdown. It’s not.


22 posted on 04/07/2010 5:15:39 AM PDT by RegulatorCountry
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To: RegulatorCountry
Fundamentally subversive in that he wants to put computer power in the hands of the people? Ya... Oh wait it doesn't actually mean computer power exactly...it could mean disruptive and innovative application of existing technologies. Ya...ok.

I just hope you are in marketing instead of having a severe man crush.
23 posted on 04/07/2010 5:22:45 AM PDT by Durus (The People have abdicated our duties and anxiously hopes for just two things, "Bread and Circuses")
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To: RegulatorCountry

Sorry, but you’re defending the indefensible. I’m no “Apple hater”, by any means, but I have been in the industry long enough to know some basics. This is a media platform, and yet they cripple their initial release (face it; that’s been their pattern) by omitting standard interfaces to facilitate the transfer of such media to the iPad from other platforms?

Let me put it another way. If I was the product manager for this thing, there’d be some engineers being braced against the wall and getting blasted.

Mark my words....subsequent releases of the iPad will have these added (and more) and will obviously be hundreds of dollars cheaper. They will prove my point. Look at some competing products (ICD, et al) and you’ll see exactly what I mean.


24 posted on 04/07/2010 5:27:05 AM PDT by RightOnline
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To: SamAdams76
near instant access to all media (newspapers, magazines, books, movies, video, audio, web, email, etc.)

What computer attached to the internet doesn't have that?

My daughter's netbook from Dell does that, and at about half the price.

25 posted on 04/07/2010 5:29:44 AM PDT by SoothingDave
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To: raybbr

“Does all the media, songs mostly, have to come through I-tunes due to RMA restrictions? I have never bought an Ipod for that reason. I have an MP3 player that cost me fifty bucks and can play any music I put on it.”

You need to do more research before passing up superior products. The iPod can play any old MP3, and in fact almost all the music sold through iTunes has no copy protection these days. Apple felt it held things back.

As to books, there’s already a Kindle app that’ll let you read Kindle content on the iPad. You’re not limited to Apple for content. It’ll also access all non-Flash/Java content on the Web.

You also asked what the reasons were to get it instead of a netbook or subnotebook. The main one is form factor. You can read the iPad comfortably anywhere you can read a book. A laptop is just not a great reading device. Also, there’ll be a lot of exclusive content, mainly apps, that’ll only be available on iPad. I’d also add that if you want to read color material, or watch movies on a small form factor device, the iPad is very hard to beat. Early reviews indicate twelve(!) hours of battery life for movie watching.


26 posted on 04/07/2010 5:31:20 AM PDT by PreciousLiberty (In theory, theory and practice are the same. In practice, they're not.)
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To: Durus

LOL! I am in marketing. I’ve used Macs since the eighties. Say what you will about Jobs, as I said, he can be a control freak and a jerk. But, he does have a guiding philosophy, has always followed it, and it’s plainly visible in the products from Apple under his tenure. This one is no exception.


27 posted on 04/07/2010 5:31:36 AM PDT by RegulatorCountry
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To: Swordmaker
I'm always amused that at Free Republic so many folks have difficulties how other people spend their own money, if and only if they spend it on an Apple product.

No, I DON'T own an Ipad and don't know why I would but I don't own a snowmobile or an automatic Roomba vacuum either but suppose you can buy and use what you want if it's your money, and it's legal.

28 posted on 04/07/2010 5:35:57 AM PDT by Deepest South
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To: Swordmaker

lol


29 posted on 04/07/2010 5:36:31 AM PDT by happinesswithoutpeace (1.416785(71) x 10^32)
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To: RegulatorCountry
To reinforce your point about Jobs, I'll repost part of something from yesterday. He's been the most successful high-tech CEO for the last decade by far. That's something most everyone here should respect.

Say what you want, but Apple's been more successful than every other large computer and electronics company over the last few years.

Check out these quotes:

Apple and Walmart have been playing stock market tag over the past few weeks to see which company's market capitalization would be higher. At the time of this writing, Apple's market capitalization of $213.98 billion exceeds Walmart's market cap of $211.14 billion -- a difference of $2.84 billion. Currently, Microsoft and Exxon are the only US companies whose market caps exceed Apple's, with Microsoft at $255.75 billion and Exxon at $319.21 billion.
...and...
Some firms are predicting that Apple will eventually catch up to or surpass Microsoft's market cap. While there's currently a $41.77 billion dollar difference between the two companies' market caps, that's not a completely insurmountable gap. Get a load of this batch of perspective: ten years ago, Microsoft was worth in excess of $586 billion, while Apple was worth a relatively paltry $17 billion. In the same amount of time it took for Microsoft to lose almost $330 billion in worth, Apple's market cap rose by nearly $200 billion. No wonder Fortune named Steve Jobs "CEO of the Decade."
Excerpted from here.
30 posted on 04/07/2010 5:38:40 AM PDT by PreciousLiberty (In theory, theory and practice are the same. In practice, they're not.)
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To: RightOnline
What about the lack of “standard” interfaces...USB, firewire, etc.?

Why? Really, why have them? They're 20th-century relics, usurped by Bluetooth and WiFi and 3G. This thing isn't a workstation, and it isn't for archiving. It's not supposed to replace your desktop with its poundage of boxes, cables, gizmos, most of which is rarely used; if you need them, there they are. This thing is supposed to be super-ultra-light, with nothing you don't need most of the time.

Welcome to the wireless 21st Century. Keyboard? wireless. Mouse? moot. Storage? cloud. Content? streaming. Printing? remote. An occasional tethering aside for deep updates, recharging, and collecting what I really want on-hand (ex.: 100 favorite CDs, not all 1000; 10 favorite movies, not all 200 uncompressed), and ... who needs physical ports?

31 posted on 04/07/2010 5:48:54 AM PDT by ctdonath2 (+)
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To: RightOnline

There really isn’t a pure competitor for it. As of now, a cheap netbook isn’t all that similar, in what it does nor what it can do, unless you have an unlimited data plan and plug your cell into that cheap netbook. But then, you have the content stream. Who makes it easy, at an acceptable price? Apple.

Face it, most people don’t want to dink around with the innards of their toys, their televisions, their cell phones or other media devices. They just want it to work, and to look good doing it. The sort of wild west environment, of buying bits and pieces and constructing your own idealized computer are being relegated to hobbyist status. No doubt people built their own radios and televisions, close to a century ago. Who does now?


32 posted on 04/07/2010 5:51:27 AM PDT by RegulatorCountry
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To: Swordmaker
Our District ordered 8 27" iMac's. 4 had Superdrive problems requiring replacement and 1 had the screen flicker issue.

Out of 8. 4 had issues. One of them had 2 issues.

50% failure rate.

Of the 60 21" in our last order (bringing our total to 200 21" iMacs), 11 had issues right out of the box. Superdrives, dead wireless nics, a bad harddrive, and a twitchy power supply.

We ordered 130 of the new MacBook's. 1 harddrive issue out of the lot.

What kind of picture does THAT paint for you?

33 posted on 04/07/2010 5:53:57 AM PDT by Dead Corpse (III, Oathkeeper)
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To: SoothingDave
What computer attached to the internet doesn't have that?

Think about what that has meant up to this point. What is being merged, here?

34 posted on 04/07/2010 6:00:00 AM PDT by RegulatorCountry
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To: RightOnline

Is there a reason you can’t transfer files over the same iPod connector people have been using for a decade to transfer content from their computer to Apple made peripheral devices?


35 posted on 04/07/2010 6:04:49 AM PDT by Mr. Blonde (You ever thought about being weird for a living?)
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To: raybbr

I had starting ripping my CD’s to disk back in the 90’s. Have close to 3K songs. Any new CD gets ripped first thing when I get home. When I first got my iPhone and had to install iTunes, I told iTunes where my music library was and that was that. When it synced my iPhone it transferred the whole library to the device. iTunes purchases through the iPhone, get synced back to the library. Oh and they are, or should be DRM free as Jobs forced the issue with the record labels.

The cool thing about iTunes on the iphones was: when you’re watching a movie or tv show and you like a particular song or artist, you can whip out the iPhone and look it up in iTunes. If you really like the song and they have it, you can downloaded right then and there.


36 posted on 04/07/2010 6:06:04 AM PDT by AFreeBird
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To: ctdonath2

Sorry; no sale. If this thing is to be a glorified toy, then you may be right. If they want to position it as a true tablet compute platform, gotta have those “relics”, friend. Look at competing products; tell me that they are all wrong.


37 posted on 04/07/2010 6:09:49 AM PDT by RightOnline
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To: RightOnline
This is a media platform, and yet they cripple their initial release (face it; that’s been their pattern) by omitting standard interfaces to facilitate the transfer of such media to the iPad from other platforms?

It has the same standard interface for media transfer as the iPod, which has about 75% of the media player market. A USB reader and SD slot are available via adapters.

Let me put it another way. If I was the product manager for this thing, there’d be some engineers being braced against the wall and getting blasted.

If that's how you reward folks for 300,000 first-day sales, good luck finding new engineers.

38 posted on 04/07/2010 6:12:10 AM PDT by ReignOfError
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To: Swordmaker

Apple fans wanted a Macintosh in a small tablet form while the iPad is an iPhone in a large tablet form. That’s a huge difference.

Also, as I’ve seen reported, you can’t read a book outside. How about in the window seat at Starbucks?

(Letterman’s creepy but the routine was funny.)


39 posted on 04/07/2010 6:15:27 AM PDT by Leonard210 (Tagline? We don't need no stinkin' tagline.)
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To: RightOnline
Look at competing products; tell me that they are all wrong.

Show me a successful competing tablet.

The "tablet = laptop - keyboard" model doesn't work.

40 posted on 04/07/2010 6:18:23 AM PDT by ctdonath2 (+)
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