Apple iPad – Market Disrupting or DOA?

You may or may not have heard about (or seen) the new Apple iPad but if you are interested, check out the keynote and promo video.

Some have described it as “an iPhone on steroids” whilst others have focused on the missing features (although I’d argue point twelve in that article as the iPad does have Assisted GPS functionality in the WFi + 3G model).

Towards the beginning of this month, I mentioned to the missus that I was going to make the call that 2010 was going to be the year of the eBook. Now, the eBook isn’t a new concept by any means. For instance, the Amazon Kindle in all of its flavours have had the market cornered in the US for the last few years with its ability to download books over the air for no additional cost but had remained exclusive to the US whilst the rest of the world missed out. That changed last year when Amazon released an international version, perhaps in a preemptive bid to get a slice of the eBook market before Apple let its creation out of the laboratory. Other notable contenders have been the Barnes & Noble “Nook” and the Sony “PRS” series which have captured a slice of the market.

By and large, Amazon has had a stronghold on the eBook market and a commanding position with publishers when it came to carving up the profits however this is soon going to change. Up until June 30 this year, Amazon will take 65% of the profit of an eBook leaving 35% for the authors and publishers to carve up. After this date, Amazon will mirror the 70/30 split (in favour of the authors and publishers) possibly signalling a compromise to protect market share.

It would seem then that the Apple iPad has already had an effect on the market even before it was officially announced.

The launch of the  iPad could closely follow that of the iPhone 3G and 3GS. Riding the success of the iPhone 2G in the US, Australians were quite keen on getting their hands on the subsequent iPhones in 2008 and 2009. Converged devices (in particular smart phones) have been a winner in Australia in the past and I can’t see the iPad being any different. Sure, this thing doesn’t fit in your pocket but for someone like me who has a backpack it would certainly slip right in without much of an issue but for others there could be some logistical issues to sort out. Ladies with sufficiently large handbags may have less of an issue though.

The question will be how people will incorporate such a device into their digital lives. Does the iPad truly fit in between an iPhone (or equivalent) and a laptop? Is there actually a void between smart phone and laptop?

Personally, I think the Apple iPad presents an intriguing option for people who want something more than a smartphone but don’t want a full blown laptop. So long as everything is synchronised across all of the devices (either through use of the cloud or another arrangement) this might get some legs. Having a mobile device is great on the go but when you are hanging around somewhere for a while a bigger screen would be a bonus. It might even be handy for those with younger kids who like some entertainment on those long road trips and want to spare the expense of those pricey automotive entertainment systems (that are in most cases stuck inside the vehicle). I’ve even had one person mention that they might use the iPad for GPS if only there were a dashboard mount for it!

Some people will naturally find a use for the iPad in their lives and others will get one anyway and make it fit.

Anyway, I reckon the iPad will upset the applecart (pardon the pun), go a fair way in eroding the dominance of the established players in existing markets and making inroads into new markets. Apple have a history of market disruption and I can’t see this being any different. Netbooks may in fact be in trouble with the release of the iPad. Even for its initial shortcomings, I don’t think you smell the steaming fail from the iPad.

Apple should not be underestimated and the iPhone should be a testament to that point of view. It reminds me of a a couple of lines from The Office (US):

Jan: I underestimated you Michael.
Michael: Yeah, well maybe next time you’ll estimate me.

I’ll post a review of the iPad when I get my hands on one.