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Jeremy Frommer, CEO of Hedge Fund LIVE Jeremy Frommer has 20 years of industry experience and is currently responsible for general management and leadership of the General Partner. Previously, Mr. Frommer was a Managing Director and Head of the Global Prime Services Group (“GPS”) at RBC... More
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  • Why should the iPad be so different from its iPod cousin? iPad2 is here 0 comments
    Mar 3, 2011 8:23 AM | about stocks: AAPL

    HedgeFundLIVE.com — While watching the live Engadget’s live blog of Apple’s iPad2 unveil event I could not help but snicker at the following caption: “Steve is back ‘it weighs 1.3 pounds’”.  For a minute it seemed that the blogger was commenting on Steve’s wiry post-chemo frame, but I’m pretty sure he was referring to the new iPad’s weight.  But that’s enough of that – I’m happy to see Steve back and strong enough to present.  Let’s hope he’s around at least until his brain can be attached to a robot that will live forever.

    There has been a lot of chatter on the Hedge Fund LIVE desk about the iPad2 not being that big of a deal.  And I am not here to argue whether or not that is true.  I was very impressed by the Apple presentation, and, as usual, I want the iPad2, but I’m probably not going to buy it.  I usually wait for the price to come down a little bit and by that time the next iteration of the device is out and the cycle starts all over again.  What I would argue though, is that the iPad family of products will not be that different from the iPod family.  Back when I was in college I remember the release of the original iPod, the one without the clickwheel, without the color screen, and certainly without a touchscreen.  A 10GB iPod was somewhere in the neighborhood of $300 and I was like “F that”.  So I went and got myself a Rio mp3 player.  It had all the memory and all the features of the iPod and was a third the price.  The Rio was good, but by the time the third iPod came out Rio had still not innovated and I made the switch.  At this point in time I am on my fourth iPod and considering a fifth.  So yes, there are dozens of other tablets to choose from, but Apple will continue to innovate and the other guys will have a hard time keeping up.

    For those of you who think the iPod has seen its heyday I would argue that it’s still relevant.  In 2008, 2009, and 2010 iPod sales were 54.8m, 54.1m, and 50.3m units respectively.  Apple’s first quarter, which is their holiday quarter, iPod sales peaked in December of 2008 at 22.7m units, but they still sold 19.5m iPods in the same quarter in 2010.  By that time the iPhone had been around for 2 and a half years and the iPad for 3 quarters, so not as much cannibalization as you might have thought.  For my money Apple has a ways to go with all of its iP… products; the Pad, the Phone and even the Pod.

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    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.
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