Apple and the Gadget Continuum: Where Will the iPad Fit?

The biggest question has been whether or not Apple can pull off a third device in between laptop and smart-phone. The problem with this question is the assumption that the smart-phone has already "won" as a device category.
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In the past week, we've endured a lifetime of iPad conjecture, most of it before the device was even seen. Since its unveiling, the subject has been whether or not it's a viable device, a Kindle killer, or if Steve Jobs will be canonized by the Vatican.

Consumer reaction has lied somewhere between salivation and what can only be described as geek disappointment. Criticism has included Macolytes brooding over technical limitations, and ranks of the mobile mainstream responding with a collective "eh."

But the biggest question has been whether or not Apple can pull off a third device in between laptop and smart-phone. The problem with this question is the assumption that the smart-phone has already "won" as a device category.

With about 20 percent of mobile device penetration, the smart phone isn't a foregone conclusion. The same "in-between" logic conjured against the iPad, could be used to argue the smart phone itself is a device in between the "dumb phone" and an iPad-like device.

Do you need an iPhone if you have the larger screen iPad and low end phone that does one thing well: make phone calls? I don't know the answer, but the argument can be used against lots of devices, depending on what segment of the gadget continuum you zoom in on.

We're early in the lifespan of mobile devices, and the market hasn't made any decisive judgments just yet. So a new class of device can't be discounted, especially when pumped out of the Cupertino hits machine.

Further support of the iPad comes from its timing. Touch screens have assimilated into mainstream tech consumerdom. Jobs made a point of saying during the iPad press orgy that 75 million iPhone and iPod Touch owners already know how to use this thing.

So who will buy it? I picture standard issue to ranks of executive assistants as well as health care and fleet management personnel (there will be apps for that). Its "lean back" nature is perfect for couch potatoes, and its size makes it a good kitchen device (enter third-party wall and fridge mounts).

The portability and 10 hour battery meanwhile make it a no brainer for travelers and commuters. And compatibility with 140,000 existing apps gives it immediate appeal to iPhone owners invested in beloved app libraries. Shall I keep going?

Staying with the subject of things that "happen" on the device, Apple's content deals, such as the New York Times, are likewise timed right. Many content production industries are up against a wall and receptive to the life preserver hurled at them from the S.S. Jobs.

For newspapers especially, digital distribution is hoped to bring them into a new era of paid content, similar to what iTunes did for its beleaguered cousins in the music industry. iTunes has defined the post-Napster era with 125 million paying customers and over 12 billion downloads.

In addition to paid content, the other interesting angle here is advertising. As mobile usage continues to evolve, monetization opportunities widen and advertiser interest grows from secular and cyclical shifts. This will continue to improve as we emerge from recession.

The iPad gives the growing ecosystem of in-app advertising a boost by increasing usage, traffic and ad coverage, the latter being a function of screen size. In this light, Apple's recent acquisition of mobile ad network Quattro makes even more sense than it already did.

Apple has stated that the main driver for the acquisition was to give its iPhone app developers a way to monetize what are mostly free apps. You can bet that Quattro will be positioned as the preferred ad network, integrated with the SDK workflow (toolkit for app developers).

But like Google, this democratization of ad support isn't all virtuous. Apple (via Quattro) will split revenues from these ad placements. And it won't just get more advertising under its umbrella via Quattro, but bigger and better ad units via iPad.

As for the iPad's fate as a consumer hit, its true killer app, paraphrasing Michael Corleone, has yet to reveal itself. Judging by the rapid-fire rollouts of iPhones and other Apple hits, expect to see much more from this device that hasn't even been thought of yet.

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