The iPad: Does Apple Have a Bookworm?

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Hi, I'm Eric Bleeker, an analyst at Fool.com, and this is my "120" on Apple's (Nasdaq: AAPL  ) iPad.

Obviously, there's been a lot of excitement and news about the iPad coming from a company that's delivered hit after hit. However, I think investors should take some perspective of what kind of market the iPad can actually capture. Number one, with e-readers, it's launching into a very competitive landscape array -- obviously, Amazon's (Nasdaq: AMZN  ) Kindle, Barnes & Noble (NYSE: BKS  ) with its Nook, many players.

Apple's going to come in with a much more full-featured product here. The question will be how receptive consumers are to that versus their current e-readers, which are more focused on book reading. Second, tablets. For at least a decade, tablets have been the next big thing in technology, but it's never really hit. The question is whether Apple can actually open up this new market that so many others have failed in. It's not alone, either. Hewlett Packard (NYSE: HPQ  ) has their new Slate coming out, which works with Microsoft Windows 7, and also Dell (Nasdaq: DELL  ) has their own tablet along with many other smaller players.

As far as what this means to Apple, one thing to keep in mind: Even if the iPad sells more than the iPhone did in its first year, it's still only around 5% of the company's revenue. So it's a very small slice. From there, it probably doesn't grow as large as the smartphone market. So, if you're buying under rumors, keep perspective in mind. The iPad's a great product, but it's probably not a game-changer. Thank you. I'm Eric Bleeker.

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Eric Bleeker owns no shares of any companies mentioned. Microsoft is a Motley Fool Inside Value recommendation. Apple and Amazon.com are Motley Fool Stock Advisor selections. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool has a disclosure policy.


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  • Report this Comment On March 31, 2010, at 9:11 PM, Yellowshock1970 wrote:

    I am an early Kindle adopter and in the top 500 US Amazon reviewers and can be called a bit of a Kindle fan. HOWEVER. the iPad with its large screen and Wifi and 3G can also display kindle books through the app and do so with touch screen. On top of that, through its wifi and 3G it can do many more things that my Kindle cannot. So, as far as I can see now the Kindle really only has the liquid-paper display as a pro but I am not convinced that that will be so much better than reading on an iPad. Perhaps in a beach, where the kindle has little reflection, the screen will be a big benefit... But think about it: the iPad is able to read different sources, truly do email, skype, really keep notes that you type in (ever try that on the clumsy Kindle keyboard?).

    Because of all that I believe that Apple has a shot of breaking into the e-book market and actually change it.

    The Kindle is only an eBook reader. The iPad is much more.

    Anyways, I think the iPad will indeed let then get a foothold in what is Amazons market and it might not be long until eBooks appear in the itunes menu. I think it IS significant.

  • Report this Comment On March 31, 2010, at 11:44 PM, FutureMonkey wrote:

    Yellow. I'm looking forward to the iPad with great anticipation, but I take exception to the liquid-paper display as kindles "only" pro.

    The Kindle weighs a paper-backish 10oz while the iPad is more of a hardback 1.5lbs, so for readaholics like me, my kindle is perfect fit even for extended reading sessions.

    Also, iPad link up has a monthly fee. Kindle don't cost a dime after acquisition. So the Kindle is much much less expensive as an eReader than iPad.

    Too me the huge advantage for iPad is the media content. One stop for all your music, video, email and web. Remember when you had to haul your library, bookcases, records, stereo, and comic book collection from apartment to apartment or dorm room to home and back to dorm in the back of a borrowed pickup truck every semester. College students today don't have that worry.

    I would like an Adobe pdf reader for all my faxes, scans, and documents and a functional powerpoint presenter.

    Kindle will likely be the superior eReader for a long time, but as a multimedia substitute for basically 1000lbs worth of books, stereo equipment, records, cd's, dvd's, VHS, photoalbums, etc. iPad is a remarkable leapforward.

  • Report this Comment On April 01, 2010, at 3:43 PM, sfroemming wrote:

    I see the iPad more as an extension of the home computer than a reader. Yes there will be a data access fee, but ATT customers have already shown they are willing to pony up such charges.

  • Report this Comment On April 22, 2010, at 6:54 PM, riwaterman wrote:

    FutureMonkey

    What monthly fee are you talking about for the iPad? Perhaps you were thinking about the iPad 3G which only has a fee if you use the device as a cellphone? The non-3G iPad has no fees.

    Since I am posting weeks after this article appeared but I did see a link on MF today for it, how are you all feeling about the iPad today after it has sold over 1,000,000 units.

    I read today - for the first time - that Amazon has sold about 3,000,000 kindles as of last January. iPad sales will definitely dwarf that by the end of this year.

  • Report this Comment On May 05, 2010, at 3:07 PM, RadioFreePG wrote:

    I don't think you can use the iPad as a telephone, unless you run Skype or some other VOIP app, but it can access the net through the 3G or the wireless. I think a lot of people were waiting for the 3G version;- not because they need to be on the go, but so they can have the same thing in their livingroom as the wireless user without the Router, Modem, ISP bill and phone line conveniently in their lap. If you eliminate all of those bills, the 3G is a DEAL. There is a lot of evidence that many folks who buy one of these things are going to use it sitting in their living rooms. Hook up with a little Netflix (or Hulu) and you may even be able to dispense with the cable bills.

    Student? One of the local private schools is going to get rid of its textbooks and go full-on iPad if the original 70 test units prove to be as useful in the classroom as expected. This thing is almost as big as the iPhone. Lets face it, you always want something other than a computer coming out of Apple because it is NOT a very profitable computer company, but a very profitable company that also sells computers. I think Jobs woke up to that fact a few years ago with the iPod.

    Biggest engineering fix-me is the same as the other i-guys: the battery is NOT a Field Replaceable Unit. This is just starting to rub Apple, so look for some changes in this area -- which currently is band-aided the same way as the iPod -- in the near future.

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