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’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.