Why Apple's iPad Cannot Compete with Netbooks

| About: Apple Inc. (AAPL)
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Steve Jobs pours ridicule on netbooks, saying: “They’re slow, they have low quality displays … They’re not better at laptops than anything, they’re just cheaper”. Well I have news for him, after the launch of his iPad I think that my Acer Aspire One netbook is a better ownership proposition, which is not what I was expecting.

So where have Apple (NASDAQ:AAPL) gone wrong?:

  • Apple have a marketing strategy with iPod/iPhone of planned obsolescence, like Detroit carmakers in the 1950s and 1960s. The product line is updated regularly with features held back to make the next model more appealing. So many customers upgrade every year. This strategy is no longer valid because of Android. Apple need to maximise their benefits and features to stay ahead in the race. They haven’t done so and will be outperformed on price and specification by a myriad of competitors.
  • No OLED display, presumably this will be in next year’s model. Instead they have gone for IPS (In Plane Switching) LCD. This technology gives a wide viewing angle and good colours, however it switches very slowly, producing motion blur which is not good for games. Also, compared with OLED, it uses a lot of electricity, resulting in a short battery life.
  • Not a proper competitor for Kindle. Amazon (NASDAQ:AMZN) must be very happy today. The Kindle’s E Ink display technology is vastly more readable than any LCD. And Kindle will run for a week on a charge whilst the iPad only lasts 10 hours.
  • The iPad has no camera. What were Apple thinking? This is an unbelievable omission which severely curtails the usefulness of the device.
  • Processing power. The iPad uses an ARM processor. The netbooks that Jobs derides can have ARM processors too. Or Intel’s (NASDAQ:INTC) rapidly developing Atom. So the iPad has no significant horsepower advantage.
  • No removable battery. This is naughty of Apple, these batteries have a finite life, so eventually need replacing. You have to send your machine back to Apple for this to be done, which is costly and inconvenient. Also I have different sized batteries for my netbook for different situations and can change between them in seconds.
  • The name. iPad. This is already the butt of massive derision all over the net. I am sure that there are many excellent jokes to come. What were they thinking?
  • No multitasking. My netbook will do this. This is a very significant weakness.
  • No Adobe (NASDAQ:ADBE) Flash. Huge chunks of the internet run on Flash and iPad can’t see it. Presumably Apple do this to protect their App Store revenue. My netbook runs Flash.
  • No Skype. Another massive omission and, once again my netbook can do what the iPad can’t.
  • No USB or Firewire ports. Seriously. My netbook has three USB ports. Once again Apple are seriously limiting what their customers can do with their machine.
  • Storage capacity is limited to a maximum 64GB flash drive. When netbooks often have far bigger hard drives and as many USB memory sticks as the user wants.

Not looking good, is it? So what has the iPad got going for it?:

  • Apple fanboys and Apple marketing. This is cult like. Lots of people will buy anything they stick the Apple logo on.
  • Fantastic user interface. Apple really do lead the world at this and have taken it several steps further with the iPad. This gives the device fantastic touch and feel.
  • Price. For once Apple have a realistic price structure. They need it with the competition this machine is going to have. But remember that an iPhone costs just $180 to manufacture and the iPad will cost a similar amount.
  • The App Store. 140,000 applications. On the iPad existing apps run in a small window or scaled, so there isn’t much advantage over an iPhone. But the huge catalogue still represents a huge amount of capabilities for the device. iPad specific applications will obviously benefit from using the bigger screen properly.
  • Money. Apple have enough cash in the bank to buy several small nations. They can throw this at the iPad project till it works.

My Acer Aspire One is still the better device for me and my requirements. It has a mechanical keyboard and a big enough hard drive, it runs Windows XP and Firefox customised for my needs. I can use nearly 30 years' worth of heritage software including all the established industry standards. Apple have failed to come up with something that competes with such a netbook.

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