Apple’s iPad Leaves a Lot of Room for Competitors

Apple is leaving a lot of room to maneuver in the smartphone and tablets battle. Yes Apple has the advantages of both first-to-market and huge number of phone apps lead over its rivals[100,000++ iPhone Apps to Google Android’s 20,000++]. As well its touch screen technology is now leading UI development in the same fashion that Apple Lisa and its GUI interface pioneered the ideas that would later become Windows.So Apple is known to have big technology and mindshare leads only to lose out in the long run battle for platform and market supremacy. So here are three reports which suggest that there are openings for rivals.

Basic unit cost mean huge margins for Apple but pricing room for others in tablet space:

Some wonder how much money Apple can make with the iPad. Obviously the higher end models are usually more profitable for Apple, and the iPad is no exception. I’ve done some quick and dirty research with OEM suppliers and whipped up some estimates. The high-end iPad model with 3G and 64 GB of storage will retail at $829 and produce a profit of $455 for Apple (and retailers), while the low-end iPad model with 16GB of storage (and no 3G) will retail at $499 and bring a profit of $213.

Now the netbook and iPad clone retailers who are used to much tighter margins have big head room here. But vendors that have a big OS cost [think Microsoft Phone 7 after the launch discounts] may have less to show for it.

The problem of AT&T bandwidth choking off iPhone and potentially iPad users:

AT&T has stumbled into a quagmire. When it secured exclusive rights to support Apple’s iPhone on its wireless network in June 2007, investors hailed the deal as a masterstroke. Here was stodgy, safe AT&T positioning itself to gulp profits from a cutting-edge technology. But AT&T and Apple vastly underestimated the iPhone’s appeal. At launch, Real Steve Jobs said he’d be happy if the device could grab 1% of the global cell-phone market, or about 10 million units for 2008. Instead, Apple has sold at least 42.4 million—25.1 million in 2009 alone, 14% of the global smartphone market. AT&T, which markets the iPhone in the U.S., simply can’t handle the traffic.

This is a pervasive problem that only the launching of 4G and LTE network upgrades and charging pig-users [10% of users hog 70%++ of all you can eat” bandwidth].

Self defeating policy on what can run on iPhone and iPad [no Flash] drives developers to other platforms:

Apple’s SDK and iTunes App Store rules have prohibited apps that exploit certain iPhone features, such as global UI enhancements (e.g., copy and paste), video recording and streaming, multimedia SMS, Bluetooth file sharing, Internet tethering, and background processing. Apple also blocks apps that don’t fit its vision for iPhone usability, including podcasting, direct GPS access, and competing e-mail and Web browser clients.

Having Steve Jobs genius feel for what will sail in electronic market, has its downside – some non-trivial misses in deigning whats to run in his boxes.

The List of Misses

One can hardly go out on the web and not find commentary on what’s missing in the iPad. Here is my list based on my own first reactions plus observations made at Ars Technica, Engadget, Gizmodo and other sites.

Criteria iPad Leading
Smartphones
tablets
in 2010
Buy & watch video
yes, no16x9 yes, no 16×9 std yes & some in 16×9 std
Buy & play music
yes
yes
yes
Buy & play games
yes
yes
yes
Buy & read e-books in daylight
??
no
some
App Store
yes
yes
yes
Use non-Apple media stores (e.g., Netflix, Amazon MP3)
no
yes
yes
Use office apps (wp, spreadsheet, slides)
yes
yes
yes
Create own apps
3rd party
no
yes
Surf Web
poor in US
mixed in US
mixed in US
E-mail/IM
yes
yes
yes
Multi-task
no
yes
yes
Directly exchange files
no
no
2-4 modes
Multi-touch
yes
yes
yes
3G
yes
yes
yes
Wi-Fi
yes
yes
yes
Integrated SD card slot
no
yes
yes
Flash support
no
yes
yes
Integrated webcam
no some
yes
HDMI or HD output
no no
most
10 hrs battery life
yes
yes
??
0.5 inches thin, 1.5 lbs
yes
yes
some
$500 starting price
yes
yes $250-400

So right now iPad is a Kindle thwarter – but it leaves open huge swaths of opportunity for others including Amazon to make their slates and tablets a)more versatile with multi-tasking and easy customization; b)media storage and exchange capable with USB, WifI Direct, Tap Transfer, etc; 3)savvy media machine able to record, GPS geo-locate, drive your TV, and customize your videos and/or images[the latter are multitasking intensive operations]; and 4)a phone platform of uncompromising data and info exchange. In short, Apple leads now in the light, thin portable, multi-touch, but also multi-faceted device – but its missing features leave big opportunity open to others. Now many acknowledge that Apple can shut down some of these gaps with either 3rd party apps or the addition of SDCard, HDMI and/or USB 3 ports. But I suspect others will do that first.

So just as in the first PC-personal Computer and then the first GUI for PCs with Lisa, Steve Jobs has shown a knack of being able to identify and establish big markets; but his subsequent follow up sometimes lags and even incurs deep, self-inflicted stab wounds on his erstwhile market leading products. In the end, he has lost some unbelievable leads in the marketplace to others who follow his vision with more pluck. The lack of multitasking, petty battle against Adobe’s Flash and the over-reliance on AT&T appear to just a few telling examples of missing some critical details.