This weekend Apple will ask its customers to take a leap of faith. At least it won’t be a leap in the dark.
On Sunday consumers can buy a wifi-equipped iPad from the Apple Store for $500-800. It’s Apple’s attempt to fill the middle ground between the smartphone and a laptop. Tablet PCs have been with us since the ‘90s without ever catching on. Apple is betting that their design and 150 thousand apps will create a new market.
They’ve done it before. MP3 players were expensive gimmicks before the iPod. Smartphones were email plus voice before the iPhone. Will the third time be the charm?
It all depends on what consumers think. Right now the reviews are mixed. The New York Times says that techies will hate its closed operating system, lack of a USB port, and balky keyboard. The Wall St. Journal says that consumers will love its bright screen, light weight, and multitudinous apps.
But it really is a gamble. We know where our phones (and music players) go, and many of us use our laptops for computing at work and home. Where will the iPad fit in? If it’s just an extra device for briefcase, its appeal will be limited. But if it can replace people’s laptops, Apple may be showing us how to “think different” once again.
Douglas R. Tengdin, CFA
Chief Investment Officer
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