The $2,000 iPad

WSJ ^ | 3/31/11 | Brett Arends

[harpu]

When someone asks me if I've changed my mind yet and now want one of Apple's new iPads, I tell them: "Well, even if I did, I probably wouldn't want to spend $2,000 on one."

They generally looked at me, baffled. "What do you mean, $2,000? I thought they started at $500." But I figure $2,000 is the minimum that Steve Jobs's new toy is going to cost me.

How come?

Simple. If I don't spend that $500, I'll invest it.

Historically, the stock market has produced average long-term returns of maybe 5% a year above inflation. (More on this below.)

At that rate, in 10 years' time my $500 will have grown to about $800. That's in today's dollars—after inflation. In 15 years it'll be about $1,000, and in 30 years, $2,000.

I figure I'll be retiring in about 30 years, which is when I'm going to need lots of capital. I can have the iPad now, or about $2,000 then.

Thanks, but I'll take the $2,000.

(If I were younger the iPad would cost me even more. If you're 30 or younger and you just bought one, congratulations: It probably cost you about $3,000.)

Yes, I typically do these mental calculations, at least in the back of my mind, for most things. I typically come back from the mall with no bags, gleefully clutching my future millions. (Warren Buffett, as Jason Zweig reminded us over the weekend, takes a similar view.)

[Lazlo in PA]

In case you weren’t around then, we went to the moon, designed nuclear bombs, built the Hoover Dam, and thousands of other feats we can’t seem to figure out how to do today. And all these accomplishments were done without all these “look at me, I am important” toys.

After reading your "back in the good old days" screed on technology, I got the impression you are contacting us on FR via one of these beauties. (The computer, not the chick.)

[Secret Agent Man]

Not when you’re texting while driving and crash into someone. Some people can’t even handle just talking on it while driving.

[Secret Agent Man]

Ha! It’s easy to knock old technology, but it kept a lot of people employed and got work done for those that used them! :)

[HiTech RedNeck]

Can the pad fit into the case face up?

[roadcat]

This is one of the stupidest articles I’ve ever read! I’m buying as many things as I can now, because the coming hyper-inflation is wiping out my money holdings. I’m also investing, but I don’t know if the stock market will keep pace with inflation. Buy metals, tangible goods, arms, and property. By the way, I’m typing this on my iPad. Buy one now, it might cost $2000 next year after inflation starts roaring away.

[Svartalfiar]

So under this logic, why would you buy anything more than the extreme minimum? EVERYTHING you buy translates into 4-5 times its ‘cost’ in several years, so shouldn’t you be waiting to buy, well, just about everything?

[Lazlo in PA]

No knock to old tech from me. I have a 1978 Panasonic Omnivision in my bar I use just for kicks. First VHS machine for the masses. It plays tapes so clear you would think they are DVD's. Cost someone a fortune when it was new. New car money. I just was poking fun at the posters cranky attitude toward the new stuff. One never knows if it a good tech or not for many years down the road where we can see what it did for us.

Mine has deluxe simulated woodgrain on the front.

[buccaneer81]

Not when you’re texting while driving and crash into someone. Some people can’t even handle just talking on it while driving.

Agree 100%. I was referring to incidents like when my wife's cousin had chest pain driving on the freeway from Cincinnati to Columbus. He was able to pull over, the Ohio Highway patrol and a squad got to him in ten minutes. Lifeflight flew him to Columbus where he had successful emergency bypass surgery.

[buccaneer81]

Buy one now, it might cost $2000 next year after inflation starts roaring away.

No kidding. If you're in the market for a new TV, get the $500 42" right now. It's going way up soon.

[PA Engineer]

I bought an iPod touch for one of my kids and just got an iPad 2 for the others. My main purpose is so I can video chat with them when I'm on the road. That is worth way more than $2k to me.

Absolutely. The flip side of that is when my associates contact me at all hours to discuss a technical problem. No Mr. Project Leader we do not need to video conference from my dang hotel room at 2:00 in the morning! ... yes i know it is only 4:00 PM at the office....

[Ramius]

Piffle

Sorry, dear luddite. The world is changing around you.

[TXnMA]

Have you used an iPad? If not, st_u...

[aruanan]

What a completely moronic piece. What the author said about iPad could be said about anything that costs anything.

[tacticalogic]

ok, I’ll ask, what’s a “glow-worm bubble-head”???

glow-worm = nuke

bubble-head = submariner

[backwoods-engineer]

This is such 1990’s thinking. By next Christmas, this guy’s investments probably won’t be worth jack, and he’ll be out of a job.

[tacticalogic]

Have you used an iPad? If not, st_u...

I work at a fairly large financial institution. Some of our program developers write mobile apps for our customers. We have two of them (and a couple of Macs) we use to do QA testing on. I think they've been used more for playing Angry Birds than anything else.

[metesky]

Boys have toys; men have tools, men have equipment.

Sorry little boy.

[tacticalogic]

By next Christmas, this guy’s investments probably won’t be worth jack, and he’ll be out of a job.

But by then that $500 iPad can probably be had for $150. The bad news may be that it could cost him 4-5 times that for a decent data plan for a year.

[PIF]

Of course, you could get the free Go To My PC app for iPad and use it that way. Or you could begin a campaign to convince the many Fortune 500 companies, the DOD, and medical professionals that they are wasting their time and money by extensively using iPads.

[PIF]

By next Christmas,... But by then that $500 iPad can probably be had for $150.

—

Or he could chose to use the $150 to buy a tankfull of gasoline...