What Good Is an iPad?

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by: Joel West

Friday marked the international debut of the iPad. The Apple (NASDAQ:AAPL) tablet went on sale in Canada, Japan, Australia and six major European countries.

Apple drew lines in Japan, UK and France, although it was not clear whether this was due to pent-up product demand or a carefully orchestrated launch event. Still, many expect 2010 iPad sales to exceed 10 million, and one analyst claims that iPad sales will pass the Mac in Q3 of this year.

Coincidentally, during the hours leading up to the launch, two of my friends who are iPad owners reported their contrasting views of the iPad value proposition: one who increasingly can’t do without it, and one who’s dumping it.

Apple iPad MB292LL/A Tablet (16GB, Wifi)As best I can tell, their differing reactions relate to their differing use cases, and thus illustrate both the challenge and opportunity of the iPad and tablets more broadly. They also confirm my own ambivalence about the product category.

One friend — who I’ll call “the Beav” — sent me an email asking if I had a Skype account so he could test out how Skype works with the iPad. The last time I saw him, he showed up with his new iPad, talking about how he bought an iPad only to support a client but found it to be a handy, fun device.

Another friend — who I’ll call “Anthony” — posted to his Facebook page that his nearly-new iPad is for sale because he isn’t using it. One of his friends would have done the same thing but one of his kids has claimed it as an oversized iPod Touch toy.

Although I haven’t seen him in several years, it sounds like Anthony’s use case is a lot like mine. On weekdays, he spends most of his day in one of two places — work or home — and he already has a solution for both places (a laptop at home, a desktop at work). When he’s out and about, he either doesn’t want to reach the Internet or uses his iPhone.

On the other hand, the Beav spends much of his day traveling around between client sites, and (I imagine) has a lot of brief opportunities — 2 minutes here, 10 minutes there — to check email, look something up on the Internet, read news, watch a video, etc.

My own story is that I have one computer that I take everywhere for everything, as I have for the past decade. Right now it’s a two year old, slow, increasingly fragile MacBook Air. It’s a nice form factor but otherwise a mediocre computer, but due to my employer’s budget problems I am not allowed a replacement for another two years — and so have to buy my own replacement (since no lightweight laptop can survive daily use for four years).

Even with the Air, I must say I am envious of Kindle and iPad owners who can flip out their devices at the drop of a hat — as with the guy next to me in steerage on my quick trip to Europe earlier this month. When that airline seat reclines in front of you, even the smallest laptop (and probably most netbooks) aren’t going to work unless your employer paid for those cushy business class seats.

Keyboard Dock for iPadHowever, I’m not going to type an email of more than two paragraphs on the iPad/iPhone virtual keyboard, nor am I going to use it to edit a memo, let alone a 10,000 word research paper. The iPad has a wired keyboard dock option, presumably for a desk at home or work. You can also get it to work with a Bluetooth keyboard and even (unofficially) a mouse, but carrying those around eliminates most of its size advantages.

More seriously, is the world waiting for a 3rd screen to carry around — beyond the 13-15" laptop (or 10" netbook) and the 2-3" smartphone? That was Anthony’s problem, and would also be my problem unless I spend as much time on the road as the Beav does — or have a lot of electronic reading time standing on a train, sitting in an airplane seat or by the pool.

For some, the lack of Flash (or TV video) on the iPad is a deal breaker, particularly if Time Warner (NYSE:TWX) and NBC (Universal) continue to hold out on doing a conversion (unlike frenemy Google (NASDAQ:GOOG)). For me, it’s having a big enough screen to write something but not the keyboard or application software. (I could see using Keynote on the iPad but not Apple’s defeatured word process or spreadsheet.)

Which means I end up on the iPad — and tablets more generally — where I started. Tablets will not create a new category, but will supplant (or merge with) one or more of the current substitutes: smartphones or netbooks.

Apple and Google and now HP (NYSE:HPQ) are betting on the smartphone platforms taking over tablets. Since Microsoft (NASDAQ:MSFT) has the 5th most popular smartphone platform, it presumably hopes that Windows Vista can be successfully ported to tablets.

Here I am less optimistic about the iPhone and webOS than I am about Android. (Full disclosure: I grossly underestimated how quickly the iPhone would gain market share and transform the market, missing out on a 150% stock three year price gain that spanned the most intense recession in 50 years.)

If tablets are going to catch on, it seems as though there is another shoe waiting to drop: the oft-requested OpenOffice on Android. (Yes, Androffice allows Google docs on Android, but rarely is my Internet connectivity fast enough to make the SAAS model even remotely satisfactory.)

On the one hand, OpenOffice (like Android) is the open source darling of its category. On the other hand, there is bad blood between Sun (JAVA) and Google after the latter bypassed Java (and Java licenses and royalties) to provide its own alternative Java VM.

Still, I don’t see tablets as a plausible mass market replacement for a netbook before there is a good office productivity suite to go with email, a web browser and various e-book readers. I’ll be curious to see whether Barnes & Noble (NYSE:BKS) extends its Nook into this segment, or leaves the category to Dell (NASDAQ:DELL) and other Adobe (NASDAQ:ADBE) tablet licensees. Conversely, perhaps the best hope of tablets is to be über-ereaders, seeking to supplant dead tree media rather than computing or communication devices.

Update Saturday 11am: Yet another iPad-owning friend, Youngjin Yoo, has responded to this post with his own blog post, in which he endorses the book replacement niche for the iPad.