Apple's Tablet - A DOA "Dud on Arrival"?

Apple Tablet - One device to replace them all?

Apple fans are all gaga over the recent news that Apple will be introducing a new touch screen tablet. Piper Jaffray analyst Gene Munster claims he has learned through his sources (An Asian component supplier working with Apple) information suggesting that Apple will launch a tablet device in early 2010.

Munster went on to state that the device will most likely be a larger format iPod Touch, measuring between 7 to 10 inches and be used primarily for web surfing, e-mail and digital media. He expects the tablets to be priced between $500 and $700, positioning it between an iPhone and a MacBook. In addition he expects that the device will include a 3G cellular modem which will be subsidized by a carrier. All this sounds great for Apple fans and some like @stocktwits followers on twitter are abuzz with some (@dasan) expecting this device to open up new markets.

I have a macbook and an itouch and I don't get this new tablet device. (I also have a Blackberry, a PC laptop and a desktop PC). According to some market theorists, this tablet is slated to be the best in class device for web surfing, e-mail and digital media. But does the market really want a "best in class" device for these activities? Most netbooks on the market today fill that need at a much lower price point. I would suspect that Apple expects that the accelerometer in the tablet would get more developers writing custom games for the device. This would mean that the tablet would also compete with devices like the PSP. What I see Apple doing with this device is to give consumers one device that will replace the netbook, itouch, kindle and gaming devices such as the PSP. Can Apple pull it off?

Apple faces tremendous hurdles with the tablet. Here's why. I would say that teens and younger users (PSP type users) would normally not want to carry around a device with a form factor that resembles a netbook. It must slip into their pockets as the form factor of the PSP and other gaming devices allows for that. The PSP has some additional buttons that give it the extra oomph when playing games which the rumored apple device seems to lack. These extra buttons provide the capability to do real time selection of game features using the thumbs. The apple tablet would only be effective as a gaming device replacement if this functionality was available. Apple will have a significant challenge to be able to mimic this feature on the touch screen.

The kindle segment of the market does not incur a monthly charge. The web access is bundled into the purchase price and the reason being that the data usage due to cellular downloads on such devices are limited. However there is no way to limit data usage if it offers direct web access like a netbook using a cellular modem. This would mean that the tablet users will have a monthly recurring charge of a minimum of $40. A current iPhone user will balk at such an additional cost since he already pays close to a hundred dollars per month with his iPhone. So an iPhone user is not necessarily going to buy this tablet. There is a possibility that the carrier may come up with some creative pricing bundles? That effect of that remains to be seen.

As a replacement for a netbook, serious users of the netbook would want a physical keyboard to be able to type. The netbook formfactor (thickness) allows the inclusion of a lot more standard ports which I doubt that the apple tablet will contain given that it rumored to be as sleek as the iTouch. Compare the side view of a macbook air and notice the minimum thickness to accomodate the usb and the MDP ports.
As an iTouch user, I am quite happy with the multi-media capability. I would never want to carry around an apple tablet to listen to music or browse pictures or webpages while on the move. My Blackberry tour (and iTouch where I can find Wifi) allows me to handily do that. Moreover, I can easily carry both the iTouch and the BB. If I have to carry a computer, then I might as well carry a laptop or a netbook (in a bag).

Apple has been very successful with the iPod, iPhone, macbook and the iMac line. But I fail to see who this tablet device is made for? I strongly believe that there is no large market for this device. Gene Muster even goes on to say that Apple will sell close to 2 Million devices. I think he is wrong. If that is true, then it will only cannibalize their iTouch sales. Apple should focus on lowering their cost on the macbooks and offer a 9" or a 10" macbook instead to compete with the netbooks. I think this tablet will be their undoing. It is a "Dud on Arrival".