The iPad is finally here, but it's not quite what the market was expecting. In the days leading up to the event, reports were all over the map: Apple would make the tablet for AT&T Mobility and Verizon Wireless' 3G networks; Apple would introduce the new version of the iPhone OS; and--one more thing--Apple CEO Steve Jobs would reveal an iPhone for Verizon at the end of the presentation. Admittedly, FierceWireless engaged in this speculation as well.
Yet only 5 percent of respondents to a poll we put out this week thought Apple would wind up doing what it did: make a tablet for AT&T's network. So the chattering class mostly got it wrong. But to give you an idea of how well Apple's public relations machine whipped the media into a froth over the iPad, consider this: According to Google News, as of 5 p.m. EST on Wednesday there were more articles associated with the iPad than there were with President Obama's State of the Union address.
Putting the media frenzy aside, what does the iPad mean to the wireless industry? Clearly, Apple is confident in AT&T's ability to accommodate the millions of presumed iPad users. Indeed, Apple COO Tim Cook said on Monday that AT&T had presented the company with plans to improve its network, and Apple was pleased by what it saw. Wisely though, iPad users on AT&T will have free access to the carrier's prodigious WiFi network, which should help AT&T offload some traffic.
With the iPad, Apple is making AT&T less a partner and more of a pipe. The data plans run $14.99 per month for 250 MB and $29.99 per month for unlimited use--which presumably comes with a 5 GB cap--and are half the price of what AT&T charges for netbooks. What's more, they are prepaid, no-contract plans that users can cancel at any time. Further, the device is unlocked and compatible with other GSM networks. Take note: I'm saying "users" because they're not really subscribers in the way we traditionally think of them; Apple has made sure that users dissatisfied with AT&T can move elsewhere.
Based on the service pricing, it seems Apple managed to wring some concessions from AT&T. After all, AT&T has come under pressure for its network performance in some metropolitan areas, such as New York City and San Francisco, where there are high concentrations of iPhone users. Perhaps Apple reminded AT&T of that. I have no inside knowledge of this, and it's pure speculation, but it's also possible Apple had Verizon and AT&T bid against one another to be the iPad carrier partner.
I think what Apple has done is similar in some ways to what Google is trying to do with the Nexus One. FierceWireless columnist Mark Lowenstein, managing partner of Mobile Ecosystem, noted the iPad announcement "shows that wireless operators are now running two businesses: a full-service retail business with their own stamp on devices, the user experience, content, and applications; and a wholesale business, where there will be myriad of devices connected to their networks, each with a distinct business model."
With the iPad, Apple has effectively formed a closer relationship with the customer, bypassing AT&T in many respects. I don't know if the device will revolutionize the market for netbooks and similar gadgets, but it is clear Apple is jumping on the bandwagon to revolutionize the way wireless carriers do business. --Phil