Has Steve Jobs Lost His Touch?

This week could bring answers we've thus far lacked when it comes to the iPad's potential for mass-market popularity. Apple (Nasdaq: AAPL  ) will begin taking pre-orders for the device as soon as Thursday, the website AppAdvice.com reports, citing an unidentified yet "reliable" source familiar with the Mac maker's plans.

I'd love for this report to be true. Data is the lifeblood of good investing decisions, and right now we have far too little information when it comes to the iPad.

Buying blind
All we really have are specs and dates. For example, we know from Apple's press release that the iPad will sell for as little $499 for the Wi-Fi edition, and that 3G models built for AT&T's (NYSE: T  ) network will ship in April.

We also know from surveys that there's reason to be skeptical of Apple's ability to generate demand for the iPad. Electronics reviewer Retrevo polled more than 1,000 site visitors and found that, even after seeing it, 52% were still uninterested in the iPad. Another 18% hadn't seen it and also weren't interested in buying.

But that's just one survey. Another says that one in five physicians were interested in the iPad; not much of a surprise given President Obama's push to create an infrastructure for electronic health records (EHR).

What we're missing is any hard evidence of demand for the product. A pre-order website would change that.

A solution searching for a problem
Part of the problem with the iPad is that there's no clear purpose for it. Unlike Amazon.com's (Nasdaq: AMZN  ) Kindle or Barnes & Noble's (NYSE: BKS  ) Nook, the iPad could be a movie player or an e-reader or a jukebox or a photo album. From the press release:

Import photos from a Mac, PC or digital camera, see them organized as albums, and enjoy and share them using iPad's elegant slideshows. Watch movies, TV shows and YouTube, all in HD or flip through pages of an e-book you downloaded from Apple's new iBookstore while listening to your music collection.

It's a floor wax! No, it's a dessert topping!

iFans smile at this flexibility; it's technically impressive. And yet, aside from smartphones, the jury's still out on combination electronics. For every clock radio, there's a universal remote. The iPad could be either at this point -- it's a solution searching for a problem.

Apple CEO Steve Jobs knows it, too. As Darrell Etherington of The Apple Blog pointed out shortly after the iPad's official unveiling, Jobs spent ample time at the end of his presentation justifying the product, wondering aloud if Apple would be able to "establish a third category of products." Not exactly the vote of confidence I'm after as an investor.

More broadly, I'm frustrated that Jobs and Apple haven't done the necessary work to position the iPad as an alternative to something other than hip. As in, iPad owners = hip. Non-owners? Not so much.

Jobs, for his part, described the iPad as "magical and revolutionary." If only we knew what it hoped to revolutionize.

Publishing is where the iPad could have the greatest impact. The aforementioned iBookstore is a direct shot at the Kindle. Within, Apple had hoped to sell e-books for as much as $15 apiece, well above the $9.99 watermark Amazon long ago made standard.

I say "hoped" because, according to a recent report in The New York Times, Apple is planning to offer some best-sellers for as little as $9.99 apiece, matching Amazon's Kindle pricing. So much for the iPad as savior of the publishing industry, eh?

Bring back the PDA
Maybe that's unfair. What I find fascinating is that, in many ways, the iPad is an unfinished product that's going to benefit from, or be killed by, the ingenuity of partners and developers who see it as a platform for making money.

You might say that Apple is acting like Google (Nasdaq: GOOG  ) . Build a product, give it features, and then let the wider world experiment with it, adopt it, and improve it.

It's an unusual strategy for Jobs, and it's put him in the interesting position of going on the road to convince potential partners to sign on. Jobs recently visited New York to meet with executives of New York Times Co. (NYSE: NYT  ) and News Corp.'s (Nasdaq: NWS  ) The Wall Street Journal. Clear positioning could help with these sorts of discussions, more of which Jobs is sure to have.

My advice? Use the iPad to resuscitate an old category in a new form: the personal digital assistant. Only in the case of the iPad, it wouldn't be so much a schedule-keeper, as Palm's Pilot was, but really an assistant -- a smart, digital errand boy capable of making recommendations, eliminating repetitive tasks, and fetching any sort of content I want, when and where I want it, for a reasonable price.

That's the sort of product I'd pre-order.

Is Apple's iPad positioning opaque? Make your voice heard using the comments box below.

Apple and Amazon are Motley Fool Stock Advisor selections. Google is a Motley Fool Rule Breakers recommendation. Try any of our Foolish newsletter services free for 30 days.

Fool contributor Tim Beyers is a member of the Rule Breakers stock-picking team. He had stock and options positions in Apple and a stock position in Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy is touched by your interest in multi-touch technology.


Read/Post Comments (17) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 22, 2010, at 3:26 PM, SpammersAreScum wrote:

    All I see is a giant iPhone, with all its flaws and nothing new to add to the mix other than even more Apple padlocks. There's plenty of other tablet and netbook options with higher specs, that are often much cheaper than the iPad, that I can use with greater flexibility, ownership and freedom, plus full 'pc' software and hardware support.

    Apple - what do you mean, no USB port? Being cool doesn't cut it when the device is so constrained.

  • Report this Comment On February 22, 2010, at 3:31 PM, jimslag wrote:

    If you have to justify the product, is it something that is really needed? On top of that, it has been farmed out to AT&T. Don't get me wrong, I own stock in AT&T but they don't service my area, so why would I want something that doesn't even work here. Maybe the WiFi version, but I already have a laptop (with WiFi), an iPod (with WiFi) and an Android Smart Phone (Verizon, which bought Alltel, which services my area). I for one, am uninterested in this. The iPod Touch is great but do I really need an oversized iPod?

  • Report this Comment On February 22, 2010, at 3:36 PM, Superdrol wrote:

    It's not even an iphone because the ipad cannot make phone calls or has a camera. It is a oversized itouch.

  • Report this Comment On February 22, 2010, at 4:01 PM, 123spot wrote:

    I have not been renewing existing subscriptions as they have expired this year waiting for my iPad to deliver them all (partly so I can find the furniture that so many of them currently cover in my home and largely to save a few more trees). Esquire, American Oxford, Economist, Newsweek- are you listening? I can't wait to sit down on an actual Sunday with my Sunday New York Times- even if it's snowing in my rural community where even on a drivable day in winter, I get to start it on a Mon. or Tues after a trip to town. Bring it on! I know just what it will be used for in my life.

  • Report this Comment On February 22, 2010, at 4:17 PM, militauro wrote:

    In my opinion, the iPad should've been marketed as an alternative to netbooks. I've been wanting a new notebook or netbook and was waiting for the unveiling of the iPad. Carrying this thing around my house for either browsing, watching movies, and editing files (such as an excel file) would have sealed the deal for me. Unfortunately, with no USB or multi-tasking ability, this becomes harder. It can easily work as a netbook that offers other features such as e-book compatibility and touch games. I just wish a few more things were done to make it compete with other netbooks. The price is about right to compete in that arena.

  • Report this Comment On February 22, 2010, at 4:18 PM, SpammersAreScum wrote:

    @123Spot You can have your New York Times on your computer already - works great on Windows, Linux and Mac.

    http://news.cnet.com/8301-17939_109-10098614-2.html

    Probably won't work on the iPad, though, unless it gets republished using a revised format. Adobe already has AIR to iPad working, see this cool Wired mag demo

    http://www.wired.com/epicenter/2010/02/the-wired-ipad-app-a-...

  • Report this Comment On February 22, 2010, at 4:55 PM, mcdarlins wrote:

    I can't wait for the iPad. I love my iphone but I am often frustrated by the size of the screen. Being able to read books in color, newspapers, and see apps better are only a few of the things the iPad will enhance. I predict it will be huge. You heard it here. Bo's Mom

  • Report this Comment On February 22, 2010, at 5:37 PM, Rondan wrote:

    "We also know from surveys that there's reason to be skeptical of Apple's ability to generate demand for the iPad. Electronics reviewer Retrevo polled more than 1,000 site visitors and found that, even after seeing it, 52% were still uninterested in the iPad. Another 18% hadn't seen it and also weren't interested in buying."

    To begin with even that absurd survey would indicate that at least 30% are interested in the iPad.

    It is absurd because none of the people poled have actually seen and handled the iPad! So it would be difficult for many fully comprehend it.

    Since it is a new product niche between the smart phone and the laptop, apparently Tim and others are so locked into the past that they refuse to recognize the future.

    When was the last time the world was abuzz over a larger than PDA table? Never.

    The iPad will undoubtely do what was quoted in the press release and lots more. Out of thebox, it will run most of the 150,000 plus apps in the App store, on a larger more usable screen. In addition developers are at wok on exciting new apps that may be unimaginable.

    With the wifi plus 3G model people will be able to do voip calls from any place they have access to cell or wifi services, thus replacing a landline for many.

    "What we're missing is any hard evidence of demand for the product. A pre-order website would change that."

    Give me a break! How could you really have hard evidence until a reasonable time after a new product is released.

    Many of the comments doubting the market for the iPad are similar to those made about the iPad and iPhone.

    "Part of the problem with the iPad is that there's no clear purpose for it."

    Clearly you don't get it.

    Students (carrying textbooks on the iPad) instead of a 40 lbs backpack.

    Doctors (as noted above) lawyers and sales professionals and others who are making presentations and don't want to drag a laptop to a location.

    Sign here delivery people. Readers who prefer color and ease of use to grayscale e-ink. A take along device for travelers who don't need a laptop. Entertaining kids on a family trip. etc etc.

    The fact is, that there are still lots of people who are intimidated by technology and sophisticated computers. Some don't have a computer for that reason. Many others use a computer for surfing the web emailing and looking at "digital photos" and videos. This device is perfect for them.

    Try looking at the iPad for what it can do and be (then add some imagination) rather than for what it isn't.

    "Jobs, for his part, described the iPad as "magical and revolutionary." If only we knew what it hoped to revolutionize."

    The world! It is a game changer. See above!

    "according to a recent report in The New York Times, Apple is planning to offer some best-sellers for as little as $9.99 apiece, matching Amazon's Kindle pricing. So much for the iPad as savior of the publishing industry, eh?"

    Wrong! What Steve Jobs said was the Apple and Amazon's book prices would be the same. He already knew that publishers were unhappy with Amazons $9.99 fixed price and that some prices would need to be increased to 12.99 to 14.99 range.

    What he was saying in effect is that

    Apple and Amazon would be selling at the same price as set by the publishers initially-not the fixed $9.99 price.

    On the other hand we all should know that the market will ultimately dictate prices and that publishers will have to lower prices of books not selling well.

    Build a product, give it features, and then let the wider world experiment with it, adopt it, and improve it.

    The way you state it, it sounds like a pejorative statement. After all the iPad is designed to run apps and many developers are currently developing iPad specific apps.

    Plus all those already available.

    "It's an unusual strategy for Jobs, and it's put him in the interesting position of going on the road to convince potential partners to sign on."

    This isn't unusual. Steve is often selling Apple products/sevices, particularly when they are introduced.

    "My advice? Use the iPad to resuscitate an old category in a new form: the personal digital assistant. Only in the case of the iPad, it wouldn't be so much a schedule-keeper, as Palm's Pilot was, but really an assistant -- a smart, digital errand boy capable of making recommendations, eliminating repetitive tasks, and fetching any sort of content I want, when and where I want it, for a reasonable price."

    It will be able to do that and more.

    That's the sort of product I'd pre-order.

    Get your credit card ready.

    The iPad will sell!

    Apple will have sold 3 to 4 million iPads in the period of 15 months following it's first in store availability.

  • Report this Comment On February 22, 2010, at 6:21 PM, 123spot wrote:

    thanks, SpammersAreScum. I appreciate the sites, and I do read some NYT articles online. It just seems like it will be such a luxury to sit in a big easy chair with a manageable iPad on my lap, turning the colored pages with a touch, saving the travel articles in the cloud-instead of in the huge file where they now reside. I see many happy mornings ahead and evenings by the fire with a new book. Have fun.

  • Report this Comment On February 22, 2010, at 9:04 PM, ConstableOdo wrote:

    It sure seems as the publishing industry is getting a lot of content ready for a device that supposedly nobody wants. The iPad has become one of the most widely speculated devices of our time and I wonder why that is. HP introduced their Slate which is supposedly far superior to the iPad and yet I don't hear people running around talking about the HP Slat being a massive failure, although it is also a tablet computer. I guess there's just something about Apple products that brings out the madness in pundits.

    I guess giving an iPad to some people will be like giving a pencil to a chimp. The chimp will look at a pencil and say to himself, "What's so special about this stick when an ordinary stick will work just as well to get ants." I guess there's some mental gap between those that see the iPad as being very useful and those that see it as being no different from any other device they already own.

    I'm curious to see how many average consumers are chimps that can't grasp the iPad concept. I just hope a few million start to evolve when they get their hands on an iPad.

    I guess it's just hard for me to swallow how Amazon and Apple with all their market research ability could have been so far off the mark by misjudging that nearly nobody in the world wants a media tablet device. We'll see in a couple of months time who's right and who's wrong. I only hope that if Apple is wrong it doesn't completely ruin the company's reputation.

  • Report this Comment On February 22, 2010, at 9:04 PM, gspet wrote:

    Here's the angle you should be looking at: the iPad cannibalizing Mac laptop sales. My wife will be joining me in retirement soon. Our household is going to need another computer. We'll be traveling. A MacBook was our choice. Instead we're going to get an iPad. It will do everything we need, probably more.

  • Report this Comment On February 22, 2010, at 9:31 PM, feldmail wrote:

    I will preorder an iPad as soon as Apple accepts it!

  • Report this Comment On February 22, 2010, at 10:41 PM, agragr wrote:

    "The fact is, that there are still lots of people who are intimidated by technology and sophisticated computers." The fact is that there are lots of technically capable people who are fed up with the needless complexity and never-ending problems associated with "sophisticated" computers. I predict a big market in dust covers for all those laptops that will be spending much more time sitting on the shelf.

  • Report this Comment On February 22, 2010, at 11:17 PM, motleychang wrote:

    me too. In my family (extended) we will definitely have five within 30 days of launch. Friends ?

  • Report this Comment On February 22, 2010, at 11:47 PM, RipRagge wrote:

    My current plans are to sell an old Mac laptop and use the proceeds to buy an iPad.

    When I'm traveling, I don't need the power of a laptop, but my iPhone is a bit small for some things. The screen on the iPad looks to be pretty close to the same size as the screen on my old Mac SE.

    Tim, it's time to get with the times. The PC era is ending. Your major complaints seem to be of the "my buggy whip doesn't fit in the glove compartment" variety.

  • Report this Comment On February 23, 2010, at 1:10 AM, jameskatt wrote:

    The only reason you have doubts about the iPad is that you have no creativity and cannot think outside the box.

    The iPad is a revolutionary device.

    At the very least, you should realize it is so obvious that it is the perfect eBook reader.

    As an eBook reader it reads EVERY eBook since it already has the apps to use EVERY DRM - including Kindle, Adobe ePub, and Fairplay ePubs. It also can do textbooks in COLOR and Children's Books in COLOR. Thus it is the BEST eBook reader ever.

    It does things the iPhone cannot do. It can do things a Laptop cannot do. It is truly creating a market for itself between the smartphones and laptops.

    Of course, for vertical markets - doctors and nurses, sales representatives, lawyers, etc. the iPad is the ultimate device for interacting with information.

    As a games device, it is BETTER than the Nintendo DS or Playstation Portable. Think about how much better Madden Football will be on a portable HD screen compared to the competition - and it is BETTER than the iPod Touch in doing this.

    Etc. Etc.

    Realize that the iPhone also created a UNIVERSE of apps which extended the iPhone's usefulness FARTHER than anyone ever envisioned. AT over 170,000 + apps, it has far more than the Palm organizer ever did - or any other platform for that matter - including Windows - and in less than 3 years!

    The iPad will also take use farther than anyone can envision - at least, for only those who have the creativity and foresight to do so.

  • Report this Comment On February 23, 2010, at 7:31 AM, SpammersAreScum wrote:

    I wonder if anyone has taken the time to trawl through the apps on the iTunes App Store and count how many apps are actually worthwhile.

    Those bazillions of trite apps have cheapened the worth of great designers and developers. Anything more than 99c is considered expensive. Free is what is expected. Shame.

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