This is not just another review of how the iPad bridges the world of smartphones, netbooks and notebooks. Read this cost analysis of 3G enabled netbooks vs. the 3G iPad. How will Dell, HP, Acer respond? Some say the iPad is a game changer with a whole new category of OS and will no doubt cause the definition of PC to be revised. iPad could change everything. How will it change you?
Some believe the advent of sufficiently powerful ARM-based processors, running enhanced smartphone operating systems, and offering an extensive list of applications represents a compelling new category of computing devices.
The iPad, as the first successful entrant in this space, has the potential to be at the vanguard of this segment and become the benchmark for speed, ease of use, and elegant design that all subsequent offerings will be measured against. (See, also: Will iPad 3 get killed by Android and Windows 8?)
This report by investment bank Needham & Co. will examine the iPad as a category creator: the first true instant-on /always-on device capable of bridging the world of smartphones, netbooks and even notebooks. Further, and perhaps more important, is how the very definition of ‘PC’ may need to be revised.
The real story
This report is not intended to be yet another review of the iPad as a consumer device, with a litany of features the generation 1 device lacks (i.e., flash support, a camera, multi-tasking, less awkward name), but rather Needham & Co. has a higher purpose.
Specifically, the firm wants to examine the iPad as a category creator: the first true instant-on / always-on device capable of bridging the world of smartphones, netbooks and even notebooks. Further, and perhaps more important, is how the very definition of ‘PC’ may need to be revised.
Market requirements
For the vast majority of users, a PC is a means to an end. In Needham’s view, the user seeks three basic elements:
- the ability to run pre-installed applications (such as browsers, word processing, social networking…)
- the ability to store files for quick retrieval; and
- easy means of input and output of information from the device (whether a keyboard, mouse, touchscreen, printing, or some combination)
Users vary the level of each of the elements capabilities depending on the tradeoffs they are willing to make in order to have greater mobility, improved processing power, or higher storage capacities.
Genealogy
Neehham believes the iPad should not be viewed as just Apple’s answer to Amazon’s Kindle, a slick industrial design for the literature buff seeking to avoid paper cuts.
Rather, the iPad is the product of the relentless transition to mobility and possessing (or having the access to) anything, anywhere, all the time in an instant-on / always-on device.
Coming from the PC world, the first tentative (and expensive) moves into mobility, through both notebooks and later through cell phones, proved to the tech world the desire by consumers to be always accessible and have processing power outside of the home or office.
Consumers were willing to sacrifice the degree of some of their three core user needs to have this mobility (such as slower speed notebooks for size and portability).
Over time, smartphones developed, making the next crucial steps toward adding functionality to cell phones such as email, primitive web browsing…
Originally tied to specific functions (such as date planners or just email) sophisticated operating systems began to be developed to achieve these features without overburdening the processing power available on what was basically a phone (lightweight, and power efficient being the operative words).
This new category of OS will be essential later in our discussion.
Improved ARM processors also began to appear, and (as we see with the A4 from Apple) now have PC-like functionality.
Some vendors, such as Apple, successfully layered content onto smartphones and easily installed applications through iTunes and the App Store to make the user experience that more personal.
Of course, this was not Apple’s first attempt, with the touch screen Newton a colossal failure burdened with poor writing recognition, few apps, and the stylus requirement.
Similarly, Microsoft has long been a proponent of tablets with little success. In its report, Needham believes this failure stems from a lack of compelling applications, a clear use case, and the inherent limitations of utilizing an operating system really intended for PCs.
Nevertheless, the industry moved forward with other attempts to create categories of devices.
Component cost reductions and improvements in processors, combined with an aggressive emerging Asian vendor base, led to the proliferation of netbooks (see Table 1).
Table 1: Worldwide netbook units as sub-segment of portables (2009 – 2013)
Netbooks represented another sacrifice as users gave up even more processing power, start-up times, and screen/keyboard size for a device that was (at least intended to be) lower cost and smaller / lighter.
Many users seeking only occasional Internet browsing, email, or light word processing sought out netbooks (even through wireless carriers) as an alternative to larger notebooks or desktops.
The successful development and refinement of multi-touch technology (now broadly applicable to notebooks, netbooks and smartphones) is changing the way users are able to input data and manipulate devices to access information.
Users today are significantly more comfortable with this technology, and Needham believes more willing than ever, to embrace devices that solely have touch for input (which is different than when the Newton was launched).
In Needham’s opinion, the firm states in its report all of these technologies have gradually migrated both the technology supply chain to be able to produce iPad (and iPad-like devices) and the user to appreciate the functionality of the iPad in a way many tech bloggers and reviewers fail to recognize.
What could be the impact from iPad?
Like a Trojan horse, the iPad enters the home innocently enough on the coattails of e-books, email and browsing. But with true productivity software (iWorks) offering word processing, presentations and spreadsheets (that support Office) Needham sees more potential.
The iPad offers its functionality within the iPhone OS environment already familiar to millions of users. (Read article on iPhone market share)
Unfortunately for Microsoft, millions of users also have experience with its Phone OS (currently Windows Phone 7), and it remains to be seen if the same affection can be found.
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