Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Apple Tablet Faces Uphill Battle


It's an enormous design challenge -- even for this company.

It may seem odd that a product whose existence is unconfirmed is the talk of the town. But the tech blogosphere is no ordinary world, and rumors are running rampant that Apple (AAPL) is set to release a tablet computer on January 26.

I've heard enough false Apple rumors (cough...netbook....cough) in my time that I cast suspicion on just about everything I hear. In the hunt for page views, a lot of stuff gets published without good reason. But for the purposes of this article, I'm going to take a leap and assume that the Apple tablet rumors are true.

With the exception of a few slip-ups like Apple TV and those finicky new 27" iMacs, Apple's been on a roll products-wise over the past few years. The unparalleled success of the iPod drove massive adoption of Mac desktops and notebooks, and the iPhone became popular enough to smash AT&T's (T) wireless network. And it certainly didn't hurt that Apple managed to become the world's best retailer at the same time.

A tablet, however, could be Apple's biggest challenge yet.

Apple's tablet is most likely to be a mix of the iPhone and Macbook -- a niche that's really tough to define. The iPod worked because people needed a viable, attractive device for listening to all their illegally-downloaded music. The iPod opened people up to the idea that there really was a superior alternative to the Microsoft (MSFT) Windows world, spiking Mac sales. And when people needed a smartphone that was easy to use, the iPhone was born.

Every hit Apple product has filled a specific void for consumers. But what need does a tablet fulfill for the average person?

Think about it -- this is an enormous design challenge, even for Apple.

If this tablet is too big or too small, it automatically becomes a tough sell because it would cut too close to the iPhone and Macbook without the benefits of each product. The iPhone is small, and the Macbook is powerful. Netbooks have been able to straddle the line because they have physical keyboards, making it easy for people to transition. For a tablet with a big screen and no keyboard, a new middle ground is awfully tough to define.

And at a rumored price of $800, the Apple tablet cuts it way too close to the entry-level Macbook, which retails for $999. I'm sure this tablet can do a whole bunch of cool stuff -- but the lack of a keyboard will hold it back for traditional computing duties. That means people would need a tablet and a computer. An Apple tablet may be cool at $400 or $500, but $800 is far too much for a device with limited capabilities.

Apple's doing well enough now that there really is no point in delivering a tablet when there are better things it could be doing - like adding a gaming-focused iPod, making a digital camera, or building a $799 Macbook.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos