iPad's Future: A contrarian view

At first blush, it may appear sheer lunacy to question the future of the iPad, Apple's wildly successful entry into the tablet computer market. In its latest update, the Cupertino, California-based maker announced it had sold three million units of the touchscreen device. That would suggest a bright future for the iPad as sales graphs resemble the proverbial hockey-stick.

However, here's a note of caution for Apple investors. The iPad rocketed off the launch pad on April 3, selling 300,000 units by the first weekend. Sales hit one million units less than one month into the introduction of the new product. Since then, reports continue to show steady gains, but nothing like the super-heated introductory phase.

Is the market getting Apple fatigue? Has the iPad fad run its course? Has the growth been driven by early-adopters instead of broad mass market appeal? Are sales about to reach a peak? And what about tablet computer introductions promised by Dell, Hewlett Packard and Lenovo? Only Dell has tiptoed into the category with a new product announcement earlier this month. If this is such a hot category, why are there so few imitators?

Those questions are likely causing heartburn for a few Wall Street analysts. This observer sees trouble ahead for the iPad, unless Apple ramps up unique applications for the device. Right now, most of the apps that run on the iPad are spiffed up versions available on the iPhone. As Apple demonstrated with its iPhone, it's all about the apps. Any manufacturer can produce a smartphone. What makes the iPhone unique is the applications that turn the device into a powerful personal assistant. The same applies to tablet computers.

A larger issue is defining the iPad for consumers and businesses. That may sound simplistic, but to what product category does this device belong? It does not have the processing power of a laptop. For example, it lacks media creation capabilities that computers have.

Furthermore, it cannot do things, like take pictures or handle voice calls, that smartphones can do. It has some appeal to gamers, but when compared with Xbox for example, it comes up short on gaming experience. While it has been hailed as a reader, it costs nearly twice as much as competitors' models, including Amazon's Kindle. And Apple's selection of e-books pales in comparison with Amazon's robust library.

To be fair, the Ipad is a useful device for reading, watching and browsing. It has a cool, high-definition touchscreen, but not much else to distinguish it from the competition. That's why it seems more of a complement for a personal computer, but does not replace a netbook, laptop or desktop. Its an orphan product looking for a niche to fill.

Apple CEO Steve Jobs didn't help matters when he introduced the new hand-held product as a tablet computer. Given the dismal history of tablet computers, that was not the most flattering market niche for Apple's slick new device. Jobs had an opportunity to define a whole new market in his introduction but blew it. And that name? High gag factor. It sounds like a feminine hygiene product.

Long term, Apple needs to find a market niche for the iPad. For starters, Apple should stop referring to the device as a tablet computer. That's like calling a $250,000 Porsche an automobile. The iPad is a souped-up, high-tech, eye-candy network explorer that excels at visual media.

(Personal Note: Yes, I purchased an iPad and use it mostly to access email and browse the net when I travel. It replaced my clunky, six-year-old laptop. But I don't need the processing power most heavy computer users expect and require.)

Apple should focus its marketing and application efforts in some basic categories to solidify its long-term prospects. Here are a few ideas:

1. HOSPITALS: Patient charts litter hospital wards. It's time to end the paper trail and hang iPads off patient beds. With the right software, doctors and nurses could enter patient data and transfer it instantly to the attending physician. That would allow doctors to check on patients without physically visiting hospitals so often. It would also streamline the way hospitals track drug treatments, medical observations and patient data. Medical record-keeping would be revolutionized. Even the lightest laptops are too bulky for the task.

2. RESEARCH: Research abounds in the country: from political polls to consumer mall research. Most research is done over the phone or with pen (or pencils) and paper. Why not fill out the survey on an iPad and then download the information to a server? The data could be tallied and available faster. In addition, clients could assess the data in real time, aiding the decision-making process. Another application is door-to-door surveys, such as the U.S. Census. Results could be released in months, instead of years.

3. STATE AGENCIES: State governments chew up paper like a first grader on Rendlin. Take one example: the Department of Motor Vehicles. Think of the time and money savings if agencies could use iPads to administer tests, collect information and record data. It would take some of the pain out of the citizen experience with government agencies and increase job satisfaction for state workers.

4. RESTAURANTS: Eateries with diverse menus and large dinning rooms could serve more people faster if waiters used iPads to take orders. The information would be inputted once and sent over a wireless network to a screen in the kitchen. Waiters could spend more time with customers, meeting their needs, and less time darting back and forth between tables and the kitchen.

5. DOCTORS OFFICE: A visit to the doctor's office--even your regular family physician--usually involves filling out countless forms. The paper documents are stored in files that clog up space in cramped quarters. Wouldn't it be a better solution to let patients complete the forms on an iPad and then push "send"? We vote that way today, so why does this seem like such a foreign concept to the medical profession?

Those are just a few of the uses for an iPad that come readily to mind. There are many more out there. The iPad is easily portable, can be operated with one hand and has the screen size (readability) and graphic definition to make it a superior device for inputting information, reading charts, graphs or MRI scans.

iPads could become ubiquitous in many settings because the cost is reasonable ($499 to $829), certainly cheaper than a high-end, awkward laptop that requires (most) users to be in a sitting position to pound the keyboard.

The future is there for the taking. But Apple must re-trench to take advantage of the opportunities. Tablet computers have a terrible track record. Apple thumbed its nose at market history and decided in its arrogance to show the world that its iconic logo could sell tablet computers where others have failed.

I know. I know. It's tough to argue with Apple's track record for success. But even a great company can make a bone-headed miscalculation. The corporate graveyard is littered with examples of once dynamic firms whose visions were clouded by cool technology while ignoring market realities.

It will be worth watching what Apple does next, especially if iPad sales begin to stall. Betting against Apple is always risky. The prediction here is that Jobs will swallow his pride and reposition the iPad. If he doesn't, there may be rough seas ahead for the much ballyhooed device that was predicted to save the tablet computer category from extinction.