Apple Tablet Obsession Reaches a Fevered Pitch - 21 Jan 2010

It's hard to overstate the hold that Apple—or, really, marketing master Steve Jobs—has on the tech industry and, increasingly on average consumers. The joke goes that were Jobs to publish his to-do list in digital form, Apple fanatics would line up the night before to be among the first to buy it. Not all Apple products are hits—we so easily forget duds like the Power Mac G4 cube and iPod Hi-Fi. And Apple's ever-devote fans also forgive huge missteps like the buggy Snow Leopard. But everything Apple does is the subject of intense scrutiny. And that's never been more true than today, as we head toward next week's mysterious Apple event.

What's that, you say? You didn't know that Apple was holding a PR event next week?

Well, it is. And rumors of an Apple tablet device, to be announced next week, have been growing since early last year, when CEO Steve Jobs (then recovering from a near-death experience, apparently, though even in this case, the company maintained a potentially illegal veil of secrecy) was reported to be devoting much of his time to this new device. The Apple tablet—either a small Mac or a large iPod, the rumors change from time to time—was to ship at the company's annual iPod lineup unveiling, held in September. When that didn't happen, rumors pointed to a separate October launch, just in time for the holidays.

When Apple disappoints, as it did by not shipping a tablet in 2009, the rumors simply adjust to accommodate the company, with Apple's fans getting more and more excited over time. So excited, in fact, that the rumor mongering migrated from gadget enthusiast sites to the tech press and then, ultimately, to the mainstream press. A day hasn't passed in recent weeks where some story, some new rumor about Apple's alleged tablet, hasn't consumed the headlines.

And it might not even matter.

Aside from the fact that tablets have already been done, done again, and redone by Microsoft and its many partners over the course of the last decade, Apple's entry into the market could mean almost nothing. The reason is simple: No matter how good this device is, the Apple tablet will always be an expensive companion device, and not a necessary part of our daily lives.

Or so it seems. As always, history serves as a guide. When Apple entered the MP3 player market with the iPod almost a decade ago, it created a high-end, expensive, and Mac-exclusive player that bombed. But when Apple opened up the iPod—and iTunes—to the PC, opened the iTunes Store, and lowered prices again and again and again, suddenly, the iPod surged. It started as an affordable luxury and turned into a commodity over time, racking up millions in sales.

Years later, sales of the initial iPhone, after a heady initial rush, fell off a cliff as well. So Apple dramatically reduced prices and systematically began launching the device in market after market around the world. Today, the iPhone dominates consumer smartphone sales in the United States, in part because it can feed off of the iPod ecosystem, but also because of one simple fact: We all need a phone. And the iPhone can replace other devices, including MP3 players and digital cameras. The iPhone, and other devices like it, have become a perceived necessity.

But what of this tablet? Steve Jobs once infamously quipped that he doesn't know how to make a $500 computer that isn't junk, and with iPhone and iPods edging into $500 territory and Apple's cheapest Mac portable selling for $1000 (well, really $1200: That $1000 computer is essentially last year's model), it's pretty clear that any tablet device—be it an oversized iPod or an undersized Mac—would have to fall in the middle somewhere. And a $750 device just isn't going to cut it, not when the iPhone failed at an even lower price point. (It briefly sold for $600 in 2007.)

Yet this is precisely what most rumors suggest Apple is about to launch. So why the excitement? And how can Apple possibly overcome what is destined to be a pretty lackluster announcement given the amazing upswell in rumor mongering?

Apple isn't stupid. And my guess is that the company will unveil what is essentially the iPhone 4.0 platform. This platform will power next-generation versions of its best-selling products—the iPhone and iPod touch—as well as the rumored tablet device, which may or may not be branded with the horrible moniker iPad. By focusing next week's event on the platform, and not on an individual product, Apple can neatly overcome any misplaced expectations.

And there is plenty Apple needs to do to fix the iPhone platform, given the sudden competitive surge from Google and others. It needs to multitask, really multitask, just like Google Android and Windows Mobile. It needs to be more easily customizable, and not locked into the rigid screen orientation that Apple currently forces on users. The devices need higher resolutions and better quality (perhaps OLED) screens. And iPhone needs more wireless carriers onboard, especially in the United States, so that it can erase the one major advantage of its many competitors. This can and should all be part of the plan for iPhone 4.0.

That said, there is an interesting possibility for the iPad specifically. That is, iPad could be the launching point for the iPhone platform to make its way into mainstream computing. With today's smaller devices, Apple promotes its Internet capabilities and app support, but the iPhone and iPod touch are not mainstream computers that can replace other devices, like notebooks and eBook readers (or paper-based newspapers and books). The iPad can replace these things, and given its larger form factor, it could include a much higher quality camera than is currently available in the iPhone. So it could replace a digital camera and video camera as well.

Looked at this way, the $750 price tag—probably closer to $1000, given Apple's history—starts to make more sense. The iPad can't be yet another companion device, and complementary to the other gadgets that people currently carry around. It has to replace what came before in order to be valuable to a market bigger than the relatively few impassioned Apple fans that would buy anything Steve Jobs told them to buy. (And yes, those lemmings are out there.)

More important to Apple, by positioning the iPad as a computer—a real computer—the company can now claim to play in the under-$1000 market at a time when the only real industry growth is occurring at the very low end. (Netbooks were the fastest growing segment of the PC market in 2009, and most sell for well under $500.) The iPad could fit functionally between the iPhone and Macbook, and would thus cost somewhere in the middle as well.

Is it enough? Honestly, I'm happy to exist largely outside the influence of Steve Jobs' infamous reality distortion field, and while I'm a big fan of the iPod and iPhone, I don't see the allure of the Mac at all, given its expense and lack of meaningful advantages over PCs. An iPad type device could be interesting, given Apple's lack of a real sub-$1000 computer. But what Apple really needs is a $500 portable computer, not another overpriced device. The key to the iPad's success, assuming I'm right about the positioning, will be the content deals that Apple secures, including rumored eBook and subscription TV plans. These deals, if true, could put the iPad over the top.

But hey, I'm the normal one here. Whatever Apple does announce, you can be sure that the result will be another lemming trail leading up to the local Apple Store. Until Steve Jobs steps down, that's going to be the result of virtually everything the man announces. I'd never bet against him.

Apple's event is being held Wednesday, January 27