Apple's iPad captures the eye of Euro operators

European operators are reported to be scrambling to acquire distribution rights to the latest Apple iPad device--announced to besotted followers last week in San Francisco--with Orange being first through Apple's door, leaving Telefonica and Vodafone pleading to be let in.

Whichever operator manages to gain selling rights--and it is thought that Apple will not appoint exclusive distributors--the opportunity presented by the iPad would appear to be miniscule when compared with impact created by the iPhone.

Without doubt, the iPad would seem to be a fine and expertly crafted device that includes a number of innovative features (except the ability to make voice calls). But, at heart, it is little more than a tablet PC that follows on from an initiative first launched by Microsoft some years ago. But this didn't, naturally, stop Steve Jobs claiming that Apple was introducing a whole new category of computer, fitting between the PC and the phone.

Market analysts, some seemingly overwhelmed by the Apple hype, forecast that the iPad would ship in huge volumes of over one million per month, while others raised issues over who would purchase the device.

A Gartner analyst questioned whether the 3G models would sell in sufficient quantity to be a factor. "I think the iPad will sell extremely well, but most will be the Wi-Fi model. Some of the 3G models will sell, with some willing to pay the US$130 just to have 3G. But most usage models of the tablet are with Wi-Fi... at home, in the coffee shop or the classroom."

The cost of adding a 3G capability has shocked other observers. While the US$499 price for the iPad has been applauded by US-based pundits, the cost of upgrading to 3G would seem to be excessive at US$130 given the required chipset can be obtained for less than US$10.

This pricing model could be explained by Apple wanting to set a relatively low entry cost, with any add-ons being hit hard to improve overall margins. This strategy was alluded to by Jobs stating that the basic model was developed to have "specific technical and user interface goals, but an aggressive price target, because we want to put this in the hands of a lot of people."

So, does this make the iPad little more than a slick tablet PC that will provide fresh competition to the vendors of Netbooks? It has failed to significantly differentiate itself from this new device category by falling short on key features such as multifunctional display and a videoconferencing system. However, Apple, a renowned master at teasing an audience, could add these and other exciting features in future releases.

US-based mobile operators are expected to start selling the iPad in around two months time, while European operators will have to wait longer with pricing not becoming public until March. And for the more cynical, don't expect Euro pricing to mirror US prices.

However, while operators will want to have the iPad as part of their sales inventory, other vendors, such as Acer, have announced plans to enter the market, and Nokia has already indicated its intentions when it unveiled a ‘booklet' computer with built-in 3G. There are also understood to be several tablet PCs running Android software close to being announced, with France's Archos rumoured to be planning to release one in March.

With this level of competition, Apple cannot expect to have the level of success it had--and continues to have, with the iPhone. The iPad is an improvement to an already existing device category--not a game changer.-Paul

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