Fight fair Apple!

Apple’s major product launches make it onto prime time news, not just in America, but all over the world. The launch is closely tracked by hundreds of thousands of people, including mobs of mindless fans. (The New York Times Research Labs took a real-time look at Twitter while the iPad announcement was in progress and measured Twitter comments peaking at 2,200 a minute).

And then, while we wait for the iPad to come into Apple Stores, a multi-player game of blog tennis will take place on the Internet with fan-boys and nay-sayers batting the ball to each other. In the first week, Apple will sell a million or so iPads to Apple addicts desperate for their fix. Then we will be subject to a constant drum beat of cleverly conceived Apple ads to drive sales. (I predict that “there’s a pad for that” will not be the chosen meme).

And all of this is already fated.

And Then…

Then after a few more months will we get some idea of  whether the iPad is a roaring success from the get go. IDC is already guestimating that Apple will sell four million to five million tablets this year – which means about half a million a month. That’s interesting because:

• Last year only about 1 million Tablet PCs sold and only 125,000 of those were true tablets, the rest being convertibles with keyboard, where the screen folds over to form a tablet.
• Amazon doesn’t release Kindle sales figures, but when it shows an ankle, it hints that maybe a few million or so Kindles have left the shelves. Sales are probably a little above a million a year.

As the iPad is a book reader plus much more, a half million units per month seems entirely achievable. But before we rush to judgement, let’s consider two points:

1. Apple never got the iPhone right at the first attempt.
2. Neither did it have any idea what the end-to-end business model would be.

Apple wasn’t even sure it would let developers develop apps for the phone. But then, the App Store charged in from left field and became the defining factor in the smart phone market. So now Apple has an end-to-end business-model-to-die-for and the iPhone sells 2 -3 million units a month. That figure that could easily double in time, as more markets open up and Apple’s exclusive carrier deals run out.

Killing The Etch-A-Sketch

The only thing likely to save the Etch-A-Sketch from certain extinction by the iPad is the fact that an Etch-A-Sketch costs just over $10, while an iPad costs $499, minimum.

OK it’s a joke, but also, it’s not.

The iPad is eminently suited to being a child’s computer, a vehicle for software toys and educational toys. And the child can be anything from very young to bordering teenager. So here’s my thought.

Apple may have created “just-an-iPod-Touch-with-a-bigger-screen,” but no such device previously existed.

What is more, the oversized-iPod-Touch has Bluetooth – so it can have many accessories that address quite different contexts. Its potential is huge. Let me count the ways:

1. It is indeed a child’s toy with the right software added, and an adolescent’s toy with other software, but that goes without saying, so I won’t mention it.
2. It is an eBook reader.
3. It is your personal portable TV and video player. The current SlingPlayer Mobile iPhone App turns the iPad into a TV instantly if you have a SlingBox. You also have space to load a few videos onto it to play later, if you want. It will be used extensively for this on airplanes, just like laptops are.
4. It is a portable games machine, like the Nintendo DS only bigger (you could have all kinds of Bluetooth games accessories to add more game functionality).
5. It’s a great portable web surfing machine. A good device to have handy when watching television. A good device to carry anywhere (weighs about 1.5 lbs, about the size and weight of a large paperback – but thinner)
6. It’s a navigation device for the car, assuming you get it mounted in a convenient place. Much better for map reading than an iPhone. Actually embedding one in the dashboard would make sense. Some car companies will probably do that.
7. It’s inexpensive enough to have several per household. In the kitchen it’s the recipe book and maybe the TV for news programs or sports programs, to watch while you prepare food. In the bedroom it’s for reading.
8. It’s the road-warrior and businessman’s natural companion. If all you do is presentations, write, email and surf the web, it is your briefcase.
9. It will be used extensively in the Health Sector, where tablets are already in use. It will be used extensively in education where tablets are not yet used, and PCs are perfectly square pegs jammed into perfectly round holes.
10. It will be used extensively in industrial and retail situations, and possibly even in high class restaurants. (The iPad is the menu and it takes your order.)

And all of this is before we consider two important points.

• We have no idea what developers will do with it, but for starters there are already over 100,000 apps in the app store and all of them, except the camera apps, will run on the iPad.
• Many iPad buyers will also be iPhone owners.

There will be apps that leverage the capabilities of the iPhone together with the iPad. I predict that this will be a big market on its own. These two devices will become natural complements to each other in many contexts. For instance if you have both you’ll want to use the iPad for web surfing using the iPhone as your modem. (Nobody is going to want to pay twice for 3G/4G data connection).

The Likely Sales

The general reaction to the iPad, if I’ve read the runes correctly, was that it was a little disappointing. Most of the details about it had leaked or been speculated about before it was exposed to the light of publicity. Only the price was a surprise. And nobody is quote sure how many will sell.

Like it or not Apple…

• the iPad is going to cannibalize the laptop market to some degree.

The netbook did and that sorry little device is far less impressive than the iPad. Similarly…

• the iPad is going to cannibalize the iPod Touch market to some degree.

But why should Apple worry?

It shouldn’t. Here are my thoughts in terms of sales.

Apple will sell a million iPads per month (minimum) in the first year and two million a month in the second year.

That’s a wild guess, of course, but imho this device has a much bigger potential market than the iPod touch and Apple sells more than 20 million of those each year. And there will be a considerable market for Apple in accessories; bluetooth add-ons, apps, ebooks, etc. Apple will do very well.

And, it’s over for the Etch-A-Sketch.