Is iPad really just a proof-of-concept device?
Today, Apple announced modest launch-day iPad sales of 300,000 units, which include preorders. On March 26, in post "Of course media bias favors Apple," I put launch sales at about 330,000 -- based in part on over-widely reported rumors. Five days earlier, in post "Be smart, don't buy into iPad hype," I warned that bloggers, journalists and Wall Street analysts had gone bonkers over the device, losing some common sense along the way. Piper Jaffray analyst Gene Munster is among them. Over the weekend, he revised first day iPad sales to 600,000-700,000, leading to today's admission he got it wrong. Munster also lowered full year sales estimates to 4.3 million from 5.6 million. Forrester Research forecasts 3 million iPad shipments.
Modest initial sales aren't surprising, even though some Apple watchers will wonder if 300,000 units live up to the hype. As I explained on April 2, modest early sales follow the pattern of most other new-category Apple products, including Macintosh, iPhone, iPod and iTunes Store. Distribution is limited to the United States and the 3G model isn't yet available, which also mitigate early sales.
In looking at iPad early sales -- and having seen the device closeup at Apple Store -- one question comes to mind: Is this a proof-of-concept device? My answer is "Yes!" (Please share your opinion, particularly if you bought an iPad, in comments.) My reasoning:
1) The v1 device is a misfit, fitting uncomfortably between smartphone and laptop (or even netbook). The iPad replaces neither. Something more is needed.
2) The primary usage scenario is content consumption, which is closer to consumer electronics devices than to smaller PCs. A future iPad with more powerful graphics and bigger storage could conceivably replace a netbook or laptop; that's where Apple should take the device. Something more is needed.
3) Apple has done some remarkably transformative work on the user interface design and user experience (UX). From that perspective, iPad is just a starting place, extending from iPod touch and iPhone. Last week, Forrester Research analyst Sarah Rotman Epps expressed that "in three years, we'll look back and marvel not at how many units Apple sold, but at the way Apple changed computing." Concepts for you as the natural user interface are in place, but something more is needed.
Proof-of-concept isn't necessarily negative, as some readers might assume. I'm not saying that it is. For years, a so-called "version 3 syndrome" has followed Microsoft -- the idea being the company gets products right on the third try. For example, Windows 1.0 clearly was a proof-of-concept. Windows 3.x got it right. Internet Explorer 2 was another proof-of-concept product -- for version 4 (v1 was proof of nothing).
Companies have to start somewhere with new product categories, and Apple's development objectives clearly are much larger than the actual v1 slate. Among them:
- Moving computer users to a new portable PC/device paradigm
- Establishing a new platform for consuming professionally produced content
- Transforming how people interact with personal computers and related devices
Based on those goals, iPad is a work in progress -- a proof-of-concept. By getting out the device now, Apple can secure publisher and other content creator relationships, give developers time to create and extend applications, build sustainable mindshare through marketing and iterate iPad improvements over a couple generations.
The question: Should you pay for proof-of-concept iPad? I consider the original iPhone to be another proof-of-concept device, for which early buyers paid more than those coming later on. The v1 device initially sold for between $499-$599. Apple quickly lowered the v1 price and, again, to $199-$299, when releasing iPhone 3G. The iPhone 3G is still available, for just $99.
At Fast Company, Gina Trapani asserts: "First-generation Apple products are for suckers. Only lemmings with no self-control and excessive disposable income buy first generation Apple products, especially in a new gadget category. When they do, they pay the double the price for immature hardware and software."
Is that you?