iPad First Impressions: The Good, the Not So Good and the Not Yet

“Anyone who believes this thing is a game changer is a tool.” - Paul Thurrott (via Daring Fireball)

I broke with tradition and bought an iPad this weekend.  By tradition, I mean that while I am not adverse to being an Early Adopter of new technology, I am not one of those ‘gadget’ people who needs to be the first person on my block with the latest ‘it’ thingy. 

More to the point, I simply rarely feel compelled to make the buy decision on 1.0 products before the first tranche of consumer feedback has dribbled in.  Let others deal with the hiccups and bugaboos first.  

But, I felt compelled with iPad.  Why? Well, for one, I am a committed developer of iPhone Apps, and iPad is the same lineage.  Plus, underlying that is a general deep appreciation of the iPod touch as a consumer, so I sort of know what I am getting into with iPad.

No less, I am a believer that this next wave – mobile and mobility computing - comes down to successful execution of hardware, software and service platforms, and there can be little-to-no doubt that the iPhone Platform is the prototype for mobile success (to date) with:

• 75M iPhones/iPod Touches/iPad’s Sold

• 150K Applications Supported

• 100K Developer Ecosystem

• 4B Application Downloads

• 10B iTunes Media Sold

• Jaw-Dropping Operating Margins/Cash Flow Generation

• Unparalleled Customer Satisfaction and Loyalty

Sure, some will lazily argue that consumers and developers are dumb or blindly loyal ‘fan boys,’ or more feebly, that iPhone developers are largely unhappy, and ready to shift their development resources elsewhere (read: Google’s Android). But, c‘mon, get real. The numbers, as measured quarter after quarter and in composite, don't lie.

Is iPad Really More than a Large iPod touch?

I threw in a teaser quote above to Paul Therrott’s  ‘Apple iPad Hands-On  First Impressions’ piece, as he writes the SuperSite for Windows blog and loves his iPhone, so he fits my litmus test of discerning skeptic not pre-disposed to all things Apple who nonetheless, is willing to love great products without caveat.  

While I disagree with his overall conclusion (I believe iPad is a game-changer), most, if not all, of his specific arguments are dead-on about the iPad (high design, some design quirks, and a non-essential device, given its somewhat fuzzy category), and if recent reports of Wi-Fi connectivity issues mirror my own direct experiences, there may be bumps ahead that the uninitiated are best to avoid until the iPad has a bit more seasoning.

And yet, I can’t help but feel that this is just the beginning of something big.

For one, the iPad is a surprisingly mature device, with a built-in platform of pre-existing apps, a thriving developer 'surround,' and equally important, the out-of-the box feel of the device does not disappoint.  After having spent a day in meetings with this as my computing device, calendar and note pad all rolled into one, it just feels right.

Plus, there are 75M owners of iPhones and iPod touches who automatically know how the iPad works and are favorably pre-disposed to it.  In fact, site unseen, my seven year old got up early so he could take the iPad for a test drive while I slept. Kids (engagement) don't lie.

In other words, even if you reduce the iPad story down to it being a really big iPod touch (i.e., 512% more screen real estate than an iPod touch and iPhone), it’s a good story, and there really is no other story out there that makes me go, “I want that instead.”

At the same time, I’d be less than honest if I didn't acknowledge that there is something rote about buying the next size up of your Apple 'iP' Nested Doll Set (iPhone, iPod touch, iPad). 

Some of this is the inevitable flow of Apple new product launches, perfected first with the original iPod, and then with iPhone. 

First comes delivering Device Integrity, and here Apple delivers long battery life (10 hours plus – it’s crazy good), computational peppiness, solid video, a decent physical footprint and the ability to be functionally used in 360 degree orientations – portrait or landscape, sitting in lap, upright as digital frame and/or tilted upside down. 

The bottom line is that Touch and Tilt is a great paradigm, and in this form-factor, it’s even better, which affirms why so many of the early adopters of iPad will be iPhone and iPod touch owners.  They are already sold on the user experience.

But, it’s the next stage – Software Differentiation – that I believe will be the point when iPad starts to find it’s ‘sea legs,’ just as the iPod touch did once iPhone SDK materialized; and for a number of reasons that I spell out HERE, the iPad is its own distinct derivative of the iPhone Platform branch, not merely a larger version of the same device. 

As such, we will see developer events and a specific set of features to take advantage of its native attributes.  With Thursday’s event putting the spotlight on iPhone OS 4.0, one wonders what iPad specific goodies will be in that grab bag.

Want to be a Fortune Teller?

This brings me to a story.  Long ago, I was in the real estate business.  My business partner and I went from operating in the LA Market to creating a presence in the Bay Area Market.  

Everyone assumed that we would be at a disadvantage moving into a new market, but as it turned out, lady luck was on our side. 

The LA Market happened to be further in the Boom and Bust Cycle than the Bay Area, and as a result we could see what was going to play out in the market in the coming months, and turn it to our advantage.  Markets that evolve cyclically are like that.

I feel that something similar is happening relative to the advent of the iPod touch, and so we know how this story is likely to play out.  I reckon that if I were to simply change the references from iPod touch to iPad in the post that I wrote over two years ago when that device was just launching – it’s called ‘iPod touch: the first mainstream Wi-Fi mobile platform? – I would have a respectable straw man of how iPad growth percolates.

The difference is that the iPod touch was pretty much sitting invisible behind the iPhone freight train, and also because the legacy iPod numbers were so big.  Hence, nobody really paid attention to iPod touch until it measured in the millions of devices sold.

Here, however, the external expectation is that iPad be judged on iPhone relativistic terms – a very clear segment - smartphones - where Apple was able to attack woeful competitors with an innovative value chain re-think.

With iPad, it’s going to be a slow burn, as people take time to discover the use cases where they’d feel envious if they didn’t have one, tied in part to the iPad-specific software catching up.  

In this regards, today’s news that Apple sold more iPads on the first day of sales than they did on iPhone's first day, will likely be cited as Exhibit A of the device’s 'failure' once it is unable to maintain pace with the iPhone in the days and weeks ahead, as it almost assuredly will (lines pretty much evaporated from my local Apple store by late Saturday afternoon).

As an investor, that will probably be a good time to find a better entry point into the stock.  By contrast, consumers will instinctively know when the iPad starts speaking to them.  For developers, I suspect this will all be background noise, and in the big picture, the device will sell plenty over the long-haul.

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