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Commentary: Apple Tablet – Flip or Flop?

By Andrew Berg | July 28, 2009

The Financial Times yesterday reported on the upcoming release of the Apple tablet, essentially a 10-inch iPod touch, which would coincide perfectly with Apple’s annual September iPod announcements. The Times cited media partners, namely major record labels, with which Apple has held recent talks to seal content deals to be released in time for a Christmas launch of the new device.

In light of that news, let’s spend a few minutes imagining a world where the Apple tablet is a reality. While the perfect storm of gossip is beginning to at least look plausible, it’s prudent to note that nothing in the world of forthcoming Apple gadgetry is for sure until the first consumer has one in hand.

Meanwhile, let’s say an Apple tablet launch is slated for sometime in the next couple of months. And for the sake of gratuitous sensationalism and scandal, let’s say that Verizon Wireless is the chosen one (which many an analyst has already proclaimed), sweetening the pot with a sizable subsidy on the coveted device.

Yesterday, Verizon reported second-quarter earnings, which were off a tad from the same quarter last year but still beat iPhone-wielding AT&T on nearly every crucial metric. Verizon’s data ARPU came in at $14.96, which beat the $14.57 reported by AT&T. Now imagine adding a million 10-inch Apple tablets to Verizon’s network. Combined with the carrier’s broad portfolio of smartphones, subsidized netbooks and MiFi devices, Verizon looks to bury AT&T on data ARPU.

Gene Munster, analyst for Piper Jaffray and longtime Apple follower, speculates the device will carry a $500-$700 price tag. Nearly everyone figures in a subsidy but few know what kind of deal Apple might solicit from a carrier.

Regardless, initial sales, especially if there’s a subsidy, will break records. What happens after that is anyone’s guess. While analysts are still bickering about use case and business model for the tablet, Apple fans dream of waiting in a mile-long line for the fabled device.

One of my biggest misgivings about such a device is that it won’t provide an adequate text-entry solution. I can’t imagine carrying around a tablet without being able to modify a document or comfortably (I said “comfortably”) compose an e-mail. I recently took a ruler to my desktop keyboard, and from my measurements, it looks like an ample qwerty could easily fit on a 10-inch touchscreen. Granted, the author of long fiction may not compose her next novel on a tablet, but sending off an e-mail from the airport won’t give you sore thumbs, either.  

Obviously, a device like the tablet wouldn’t be limited to text-based applications, and in fact one of its biggest strengths could be its ability to facilitate the consumption of nearly all types of digital media. A tablet would be the perfect form factor for an eReader, if a bit heavy. It’s also the ideal size for comfortably watching movies on an airplane. Games? Absolutely. Music, obviously.

That said, one of the things I find most intriguing, though obviously not its core use case, is the potential to devastate sales of devoted eReaders. While Amazon and Barnes & Noble pitch black-and-white devices that hover around $300, with most analysts saying that’s bottom-line pricing, why wouldn’t consumers spend a couple hundred more to get what could potentially be seen as the Ferrari of mobile computing?

While there are still a lot of unknowns surrounding the Apple tablet, it may represent an interesting endgame for the MID, netbook, smartbook quandary. In much the same way the iPhone has set the standard for smartphone expectations, could Apple possibly do the same by simply enlarging that form factor and calling it done? Stranger things have happened. No doubt, everyone from Qualcomm to Nokia and Intel are watching Apple closely on this one.

Perhaps the one thing worth mentioning is the effect a device like the tablet might have on a network. We all know the challenges AT&T has dealt with since taking on the iPhone. While ARPU undoubtedly goes up, 3G network quality and dependability almost invariably goes down. Could Verizon’s network withstand millions of super-powered iPod touches gobbling up multimedia by the gigabyte? Or perhaps a tablet would be relegated to Wi-Fi for the health of the network?

Whether you’re doing flips over an Apple tablet, or think it’s bound to be a flop, you’re about to witness yet another change in the way we think about mobile computing. Buckle your seatbelts. The wireless industry could be going for the ride of a lifetime.

More FirstNews 07/28/09:
•  Verizon Steps into M2M with Qualcomm JV
•  Sprint to Acquire Virgin Mobile USA
•  Commentary: Apple Tablet – Flip or Flop?
•  VZW: Steady Stream of Devices Coming
•  WiMAX-Backer Alvarion’s Losses to Widen in 2Q
•  Not Brad Pitt? Here’s TheFirstOne
•  FirstNews Briefs for July 28, 2009

 


Filed Under: Devices

 

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