Paul Krugman asks whyPad? Apple has thought through this problem in pricing the iPad. It’s main competition is Kindle, your cell(I?)phone and your laptop.
Kindle: The Kindle DX has a large screen and is the iPad’s main competitor in the e-Reader category. It is selling for $489. The cheapest iPad is $499 and has 16GB storage while Kindle DX has 4GB. Apple has signed deals with publishers and it seems books are going to be more expensive on iBooks than Amazon. Amazon seems to paying publishers to discount books. Still, given the greater capabilities (websurfing etc.) and sheer cool factor of the iPad, I would guess new consumers are going to go for the iPad given the price point. Existing customer like Krugman, it’s not so clear..you’d have to switch to the iPad and give up your Kindle. The sunk cost fallacy might help to dissuade you. But it seems a Kindle app allows your Kindle books to be read on the iPad so your books transfer.*
Cell(I?)phone: Your phone may already give you websurfing and email capability and have 3G. Apple has signed some deal with ATT where you can sign on one month at a time for either $15 or $30 and get data service. No yearly contract. So now if you thinking about buying the iPad Wi-Fi vs iPad Wifi+3G which costs $130 more you might buy the more expensive one for the option value of using 3G occasionally when you’re traveling. The price difference is actually quite hefty but since it involves no one or more year data contract with ATT, you are willing to suffer the hit on your wallet. Presumably, there was some clever use of Verizon as a threat point to get ATT to give such a good deal.
Laptop: This is where there is the least information. The demonstration showed that iWork functioned on the iPad but it was not clear that Powerpoint would work, even the Mac OS version. I Use VMWare to run Windows on my Macbook. Can that run on the iPad? Then, I’m sold!
*Updated: Commenter below cld pointed out Kindle app to me and I updated the post as a result.
Cheap Talk 
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January 28, 2010 at 11:54 am
Marciano Siniscalchi
Sandeep—the iPad runs iPhone OS, not Mac OSX. Also, it uses a different processor than the Mac (ARM, vs. Intel or PowerPC). So the existing versions of Powerpoint or VMWare will not run on it at all. This is not to say that they cannot be ported, but that’s an entirely different story.
January 28, 2010 at 12:11 pm
sandeep
Hi Marciano: I did understand that it uses a different OS but hadn’t picked on different processor – thanks! Presumably, you’re trying to come up with an excuse to get the iPad just like I am.
Parenthetically, if it is easier to run LATEX than VMWare on iPhone OS, I may have to bite the bullet and learn LATEX!
Sandeep
January 28, 2010 at 12:08 pm
cld
There is already a Kindle app for the iPhone and if I understand the iPad correctly these with iPhone apps will already work on the iPad or it will be minimal work to make them work on the iPad. I would think you will see a Kindle for the iPad in the not to distant future which would mean you would still be able to access your Kindle books.
As an aside, there is also a Kindle Reader for PC’s and a blackberry and mac version ‘Coming Soon’.
Thank You
January 28, 2010 at 12:18 pm
sandeep
Then, the fact that you sunk $300-500 on the Kindle is the main roadblock to existing users. I guess if Ipad takes off there is no hope for the Kindle given what you say. Unless Amazon allows epub stuff to run on Kindle and makes Kindle cheap as it has fewer features than iPad.
sandeep
January 28, 2010 at 2:11 pm
Wobbles
I mean, sure the DX has a an equally large screen, but the 6″ budget version of the kindle is $260. It’s also significantly more portable for what it does and the memory isn’t a huge selling point because 4gigs of books is a ton, where 16 gigs of movies is like 2-3. Plus, kindle gets you basic 3g internet service without a monthly fee (I mean, obviously we are talking really basic B/W, but still enough for say wikipedia and the news). Finally, with the Kindle development kit (just announced a week ago, obviously in anticipation of the iPad), look for people to designing apps that allow you to easily check email, facebook, twitter, etc. All of a sudden, the kindle starts looking a lot better for people who don’t need the video/graphics capability of the pad (which still lacks Flash making things like hulu a lost cause). I wouldn’t count the Kindle out yet, that’s for sure.
January 28, 2010 at 2:23 pm
Noah Yetter
The book pricing thing baffles me. Some publisher was on NPR this morning saying that they had no future selling books on Kindle for $9.99, but being able to set their own (higher) price on the iPad had them excited. Did I miss something? Since when do books cost this much? Aren’t paperbacks still $8? *checks Amazon* Yes, they are. We’re talking about digital goods, with zero production and distribution costs at the margin. $5 for a digital book is highway robbery and the publishers are bitching about $10?
Anyway back to the iPad, I’m not sure who it’s for. It’s not small enough to replace a smartphone, not capable enough to replace a laptop, and far too expensive to replace a netbook.
January 28, 2010 at 4:20 pm
2010consultant
The Guardian has a good collection of links to articles on the iPad:
http://www.guardian.co.uk/technology/blog/2010/jan/28/apple-ipad-bashed-bloggers-web
I’ll be happily sticking to my iPhone for now!
ps Noah: completely agree with you.
January 29, 2010 at 3:16 am
Leigh Caldwell
It’s not really a sunk cost fallacy; in fact it’s quite true that net utility of an iPad for a Kindle owner is lower than for a new iPad buyer: U(iPad) is greater than U(iPad) – U(Kindle).
Adjust this of course for the fact that U(Kindle) will not be completely eliminated by the purchase of the iPad, so the utility that’s subtracted from U(iPad) is only those parts of utility that are duplicated by the iPad. More of a dot product in some kind of multidimensional utility space: U(iPad) – U(iPad) . U(Kindle). Anyway it’s non-zero.
January 29, 2010 at 10:58 am
sandeep
U(iPad)-priceiPad>U(Kindle)>U(Ipad)-priceiPad-priceKindle
January 31, 2010 at 7:10 pm
Greg
“I Use VMWare to run Windows on my Macbook. Can that run on the iPad? Then, I’m sold!” A4 processor != x86 processor.
March 6, 2010 at 12:21 am
devis
Thank info.
June 2, 2010 at 10:22 am
spaspenev
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