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Apple launches the iPad

Months of buzz are manifested in the launch of Apple's much-hyped tablet

Apple Inc.’s (Nasdaq: AAPL) worst-kept secret is officially out of the bag.

At an invitation-only launch event in Yerba Buena, Calif., Apple CEO Steve Jobs unveiled the iPad, an slate-style tablet computer that has been the subject of rumour for months.

The device looks almost identical to Apple’s iPhone — but much larger. The iPad report is half an inch thick, weighs 1.5 pounds, and has a 9.7-inch display. It’s powered by Apple’s 1 GHz A4 chip, will be available with 16, 32 or 64GB of storage. Jobs said the iPad battery will last 10 hours, and more than a month on standby.

While all iPads will ship with WiFi connectivity, there will also be 3G models available, Jobs said. He said Apple had struck a “breakthrough” deal with carrier AT&T, offering unlimited data for $29.99 a month in the U.S. Jobs said the company hopes to have international carrier deals in place by June or July. The AT&T deal is prepaid, with no contract, and all 3G iPads will ship unlocked.

And Jobs announced an “aggressive” price point. Rumours in the media had put the iPad’s price tage at about the $1,000 mark. Jobs said Wi-Fi-only models will cost $499 to $699, while 3G models will cost $629 to $829.

Wi-Fi models will begin shipping in 60 days worldwide. The 3G models will be available in the U.S. in 90 days.

While this is a new pricing model for Canadian carriers accustomed to signing customers to long-term deals by subsidizing handsets, Apple now has more leverage in the Canadian market, according to Amit Kaminer, analyst with Seaboard Group in Toronto.

“It’s going to be easier to make it fly than it was when the iPhone launched,” Kaminer said. At that time, Rogers Communications Inc. was the only carrier with the GSM technology to support the iPhone. Now that Rogers, Telus Corp. and BCE Inc. have more-or-less identical HSPA networks, and new startups are on the horizon, competition to offer service for the device should be sharp.

Scott Forstall, senior vice-president of iPhone software, said the iPad is compatible with iPhone applications, using pixel doubling for full-screen display. Apple’s App Store now boasts more than 140,000 applications.

Forstall said Apple had rewritten its own iPhone apps for the iPad, and that the iPhone software developer kit supports developing for the iPad. He called it “another gold rush for developers.”

Forstall also announced iBook, Apple’s new e-book reader. He credited Amazon.com for pioneering the e-book space, and said Apple “stood on (Amazon’s) shoulders” with the iBook technology. Apple is partnering with publishers Penguin, Harper Collins, Simon & Schuster, MacMillan and Hachette Book Group to offer an online iBook store. Apple is using the open ePub format for e-books.

Michael Gartenberger, vice-president of strategy and analysis with New York-based Interpret LLC, said his hands-on time with the iPad at the launch impressed him.

“It’s very optimized for the form factor,” he said. “It isn’t too large to hold in one hand, but it’s large enough to convey the additional information needed to justify the form factor.”

Gartenberger said he could see enterprise applications for the device for users who want more than a smart phone but don’t want to carry a laptop. “Businesses that might have been looking at netbooks might be looking at the iPad,” he said. “IT is becoming increasingly user-driven.”

At one point, eight of the top 10 trending topics on Twitter were related to the iPad.

“iPad doesn’t excite me as a consumer, but I think it has massive opportunity as a cheap, industry-specific pad with the right software,” tweeted Web developer James King.

As to the inevitable online bashing of the much-hyped device, Firestroker CEO Thomas Purves called for more realistic expections. “Why did we expect it to be a full PC?” he worte. “The iPad is just a digital picture frame, with benefits.”

IDC analyst Susan Kevorkian believes that Apple will ship four million iPad units worldwide in 2010.

This contrasts with iPod sales,which didn’t surpass one million annual shipments until after the iTunes Music Store launched in 2003, but has topped 250 million since launch according to Jobs.

Similar to the iPhone launch strategy, the iPad is being initially announced with a handful of new channel partners, and like the iPhone, the iPad’s development trajectory will likely ramp up rapidly now that a wider range of partners can be engaged not only with Apple with its developer community.

Meanwhile, Steve Hilton, head of analyst research at Boston-based Analysis Mason, said, from an enterprise perspective, the iPad will leave customers scratching thier heads.

“It doesn’t have common office productivity tools, has a 10-hour battery life when WiFi isn’t running and has a custom chipset. Not enterprise material,” he said.

In addition, Hilton believes the iPad will be an enterprise security officer’s worst nightmare. “Easy to steal off employees’ desks.”

From the mobile carriers’ perspective, Hilton said the iPad puts the wireless operators’ networks in the same position as their fixed-line brethren – fat, dumb pipes.

From an Apple strategic perspective, the iPad will befuddles people that Apple seeks to “kill” the netbook segment. “The netbook was committing hari kari just fine without the iPad,” Hilton said.