Is The Apple iPad a Game Changer?
SAN FRANCISCO - Apple CEO Steve Jobs on Wednesday unveiled the company's latest creation: the iPad, a state-of-the-art tablet computer that all but challenges traditional print and media companies to create content for it.
The device, which will be available in March, becomes the leading example of a new generation of portable entertainment centers.
With a 9.7-inch, high-resolution screen, the half-inch-thick device gives book, newspaper and magazine publishers - as well as movie and TV producers - a chance to show they have a future in the digital age. The iPad, which uses the same operating system as Apple's popular iPhone, promises to show off news and entertainment as well as, and maybe better than, print media and many TV sets.
It's a "truly magical and revolutionary product," Jobs said at a media event that finally confirmed weeks of speculation about Apple's new tablet.
Sales hype aside, it's fair to ask: If traditional media can't make it on devices such as the iPad, can they make it anywhere?
"What I've seen (of the iPad) does create a new space" for media, says Ned May, a lead analyst at the research firm Outsell. "There's an opportunity here, but they need to come up with more compelling experiences."
A lot also depends on Apple's ability to grab the imagination of ordinary consumers - not just eager tech enthusiasts - to turn the iPad into a hit on the order of the iPod and iPhone. That will require Apple to butt heads with some of the biggest powers in consumer electronics, telecommunications and media retailing.
Hewlett-Packard, Intel and Dell also are showing off prototypes for tablet computers.
Meanwhile, those who want to access the Web on the run already can do so through netbooks and smartphones. About 18 percent of mobile phones are smartphones, according to Nielsen.
And people who mostly want to read can take thousands of digital books with them on an e-reader such as Amazon's Kindle, the Sony Reader or Barnes&Noble's Nook. With so many alternatives in the market, some analysts say, Apple may have come up with too little, too late.
"To really change the way we consume media, it has to offer a lot more media in a new way," says James McQuivey, an analyst at Forrester Research. With no memory card slot to input photos or music, and no USB port, "There's no new way to get video content here. Your laptop is a better competitor for delivering video to you in the home and on the go."
McQuivey says Apple likely will sell 2 million iPads to early adopters, folks who had been thinking of an iPod Touch, "and those who want something to make them look good at parties."
Something for everyone?
Apple hopes to secure its place in the emerging market for portable digital devices by offering something for almost anyone. "We want to put this in the hands of lots of people," Jobs says.
The iPad starts at $499 for a model with 16 gigabytes of memory that connects to the Internet via a wireless network. The 32GB model is $599, and the 64GB one will go for $699.
You have to pay more for a unit that can use 3G cellphone connections to the Web. They'll run $629, $729 and $829. The actual connection, from AT&T, costs $14.99 a month for 250 megabytes of service, or $29.99 for unlimited service - but it doesn't require a contract and can be canceled at any time, Jobs says.
As with the iPhone and other smartphones, including the Motorola Droid, images on the iPad rotate to landscape or portrait mode depending on how it's held. The device also has a GPS system, enabling it to highlight nearby stores, restaurants, movies and other attractions.
The battery can run for 10 hours before it needs to be recharged, Apple says.
"It's the best browsing experience you've ever had," Jobs says. He adds that it's also "awesome to watch movies and TV shows on." The iPad can handle any music or video that's available from Apple's iTunes Store. But you won't be able to view online videos from popular video sites such as Hulu and Dailymotion, because the iPad doesn't support Adobe's Flash video format.
"The strategic power here is in reading and viewing, and what that could do to all the folks who want to run their content to the reader and viewer," says Harvard business historian Nancy Koehn. "If this looks anything like what the iPod and Touch did, there'll be a chokehold," as Apple tries to dictate terms to publishers and producers aiming to reach audiences - and to consumers buying news and entertainment.
That may be one reason so many news and entertainment providers were absent from the iPad announcement. Book publishers Penguin, HarperCollins, Simon&Schuster, Macmillan and Hachette were represented at the announcement. The New York Times, Electronic Arts, MLB.com and Gameloft also were there.
"We thought there was going to be more content announcements," says Gene Munster, an analyst at Piper Jaffray. "The reality is, they're just launching it - it's not even out. It's going to take time. It would have been nice to see more (content), but that doesn't change our belief that, ultimately, (it's) going to come."
Software developers should find it easier to write programs for the iPad now that Apple has released a toolkit for them.
'Part of a big shift'
The combination of so many media capabilities in one device could have some unexpected consequences. For example, makers of video games see an opportunity to draw iPad users away from TV.
"It will increase the presence of the iPhone platform in the living room and the bedroom," says Bart Decrem, CEO of Tapulous, which makes games for smartphones. "That means users will spend less time in front of their TV and traditional console devices. This is part of a big shift from traditional console games aimed at serious gamers, and toward casual, social games enjoyed by everyone during their spare minutes."
The iPad's extensive media capabilities also could inspire software developers to come up with innovative applications.
"This will enable people to do things they didn't know they wanted to do," says Ge Wang, a Stanford University assistant professor who develops music applications for the iPhone.
Even Apple is unsure how the iPad will evolve.
"This is about all of the things that you might have done with a lower-end computer, but now this is a better device," says Phil Schiller, Apple's senior vice president of worldwide product marketing. "That's what's really exciting. Under-$500 range that lets you do all your e-mail and Web browsing and get all the benefits of the apps in the App Store. That's a whole new thing we've never seen."
But the iPad may have the biggest impact initially on books, newspapers and magazines that are trying to find a home in the portable digital world.
Book publishers are eager to find an alternative to Amazon's Kindle. Many are irked by the online retail giant's low $10 price for many best-selling e-books. Some, including Simon&Schuster and HarperCollins, are fighting back by refusing to release some titles in digital form for several weeks, so devoted fans will pay for the higher-priced hardcover editions.
Apple, though, seems confident it can get consumers to pay higher prices for e-books. In a demonstration of its upcoming iBookstore, it showed the late senator Ted Kennedy's memoir, True Compass, selling for about $15, vs. Amazon's $10.
"Amazon is subsidizing some of the costs," says Michael Gartenberg, an analyst at Interpret. "But the e-book wars are just heating up, and Apple is giving you a reason to rethink your choice of an e-book reader with the device that does a lot of other things."
Sony says it isn't worried about competing with a device that could turn out to be a Jack of all trades and master of none.
"It'll expand the digital reading space," says Steve Haber, president of Sony's digital reading division. "We'll find out how optimized the device is for reading and what features it includes for note-taking, highlighting, tapping a word and having a dictionary pop up, and battery life. And I don't know what it's going to be like reading on a (bright, lit-up) screen. We'll find out as we get the chance to play with one."
So in the near future, consumers, electronics manufacturers and news and entertainment producers will try to figure out which products make sense and which ones are just overkill.
"We're increasingly competing in terms of form factors, not just products," says John Hagel of consulting firm Deloitte's Center for the Edge.
"The jury is still out."