What's Really Wrong With the New iPad?

Judging by the headlines, you'd think that Apple (Nasdaq: AAPL  ) screwed up the latest iPad launch something fierce.

  • In Australia, the LTE-enabled version is sold as the "iPad 4G," but it can't connect to the local LTE networks. Aussie regulators are up in arms about this misleading marketing, and Apple has offered full refunds to unsatisfied customers Down Under. Swedish regulators are looking into the same problem half a world away, and others could follow -- after all, the LTE connection is only supposed to work in the USA and Canada. The chips Apple chose only work with American 4G standards while other markets use the AT&T (NYSE: T  ) and Verizon (NYSE: VZ  ) spectrum slices for other things like 3G connectivity or TV broadcasts.
  • The battery runs hot compared to the iPad 2. LTE connectivity and the extra horsepower needed to run that gorgeous display sure give the battery a workout, and some users are getting uncomfortable.
  • Moreover, the iPad seems to report a full charge even when the battery is more like 90% full. Sounds a bit like the misreported wireless signal strength of iPhones past, doesn't it?
  • Finally, some users report downright terrible Wi-Fi reception. That's a deal-breaker for the Wi-Fi only version, and it could pose dangers to your wireless bill on the 4G iPad. What fun is an iPad that won't even connect to your network?

Big trouble in little Cupertino?
Of these, I'd say that the most serious concern should be the misleading marketing message. There are laws against this in many countries, and sticking with the current naming conventions even where they don't match reality could get Apple in hot water.

On the other hand, that 4G moniker has been abused like Linus' security blanket for years as many so-called 4G networks don't conform to 4G specifications at all. In fact, today's LTE networks should really be known as 3.5G because they only go halfway to the next level. So maybe Apple gets off the hook based on a history of industrywide abuse of that term. I mean, your Aussie-market iPad could still connect to 4G networks while vacationing in America, right?

The rest of these complaints range from ridiculous to pointless. A temperature of 101 degrees Fahrenheit is mildly uncomfortable but far short of scorching hotness. Chances are that the battery in your laptop gets hotter than this on a regular basis, regardless of make or model. You can often fix the Wi-Fi issues with simple tweaks to your iPad's or wireless router's settings. This means that the Broadcom (Nasdaq: BRCM  ) Wi-Fi chip is innocent and a software patch should make the problem go away. And battery-charge levels are black magic to begin with -- Apple just manages the information display in a somewhat unexpected manner.

Nothing to see here, move along
So no, I don't believe that quality control went downhill as soon as Steve Jobs shuffled off this mortal coil. Minor issues like these exist in nearly every gadget you'll ever buy. But Apple's high-profile and extremely concentrated product catalog puts every bug under scrutiny that nothing else can match. If Antennagate didn't kill the iPhone, then iPad users will soon forget all about this miniature firestorm as well.

None of these issues will kill the iPad, or even hurt it. But don't confuse me for a rosy-cheeked, bushy-tailed Apple bull when I say that, because I'm not.

If you want to worry about the new iPad, you should probably focus on the lack of game-changing innovation here. Like the iPhone 4S, this iPad is simply a more polished version of the previous year's product. The new screen is nice but hardly changes the way you use your device. And Apple is actually late to the 4G party, just as it was to the 3G party many moons ago. Worst of all, Apple didn't even bother to bring the iPhone 4S's saving grace, the Siri voice assistant, to the new iPad.

But hey, Apple fans are buying this thing by the millions, so it can't be all that bad. But I think we should worry about Apple's creative juices running low. How many times can you persuade the same set of core customers to buy essentially the same product in slightly different formats and with a new coat of polish?

That's one reason I'm not comfortable buying Apple today, and it's why I have a bearish CAPScall on the stock. If you really want to invest in the iPad and iPhone boom, you're better off with shares of the component providers inside the iDevices.

Fool contributor Anders Bylund holds no position in any of the companies mentioned. Check out Anders' holdings and bio, or follow him on Twitter and Google+. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple and creating a bull call spread position in Apple. The Motley Fool has a disclosure policy.

We Fools don't all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


Read/Post Comments (10) | Recommend This Article (4)

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 March 28, 2012, at 9:28 PM, millsbob wrote:

    Anders, actually you're wrong about the screen: it Does change the way you use the device, significantly.

    especially noticeable with dense graphics: Google Maps on the new iPad is waaaaay better than even on most desktop screens, let alone earlier iPads. you can see street names even when covering very large swaths of ground.

    methinks maybe you've not actually tried one.

    PS although i follow your writing, i've long disagreed with your call on AAPL. and it's made me a rich man. ;)

  • Report this Comment On March 28, 2012, at 9:48 PM, bsimpsen wrote:

    Anders, have you used a new iPad. Have you gone back to an old one?

    As millsbob notes, It really does change the way you use it.

    I'll also agree with millbob that the misunderstanding of Apple pundits may actually be a perverse barometer of public sentiment. If you can be consistently wrong earlier than the public is consistently right, you are useful.

  • Report this Comment On March 28, 2012, at 10:15 PM, TechnoHistorian wrote:

    Apple has always innovated with a combination of (1) occasional game-changing devices (as in three during the past decade), and (2) incremental changes in between the block busters.

    In baseball the latter is called "small ball," and it matters a lot. Sure you need a few home runs, but singles and good fielding help. So there is encouraging news in this comment by you about the new iPad:

    "This iPad is simply a more polished version of the previous year's product...."

    Or as Apple says, "It's resolutionary."

    In short, take the new iPad, add in iBook Author (love it), note the improvements in Garage Band and iPhoto for the iPad, and welcome the new, faster MacBook Pro coming along soon, and Apple is doing just fine.

  • Report this Comment On March 28, 2012, at 11:24 PM, Fruitfan wrote:

    At first I was a little puzzled about the lack of Siri but from the first day i took it out of the box I realized I had no need for Siri on my iPad. I use it at home, by the pool, Starbucks and the park up the street (AZ weather is great) all while my iPhone 4s is within reach. But the new screen is amazing, the camera is better for FaceTime with my relatives back east and the 4g is blazing fast. My 12 year old is already whining that the hand me down iPad 2 sucks compared to the new one, I know he is spoiled so no lectures on how good he has it. Bottom line it's worth every penny and the 4 hrs in line on the morning of the 16th

  • Report this Comment On March 29, 2012, at 12:05 AM, Uruzone wrote:

    I don't understand the increasing number of articles (especially from Motley Fool) saying that investing in Apple might not be a good idea, but investing in the component manufacturers for iDevices *is* a good idea. If you think these component manufacturers are going to sell tons of components and therefore increase profits (and presumably, their share price), logic dictates that you expect iDevice sales to be big as well. So why would the company with 30-plus percent margins NOT be a good investment but its suppliers with much lower margins get the thumbs up?

  • Report this Comment On March 29, 2012, at 12:15 AM, Fruitfan wrote:

    Uruzone I can sum it up for you...every so called expert wants to be the first to say "I told you so " when Apple's stock pulls back..problem is they started this over 100 bucks per share ago and are starting to look quite stupid. Thanks to Apple I will be able to retire 10 yrs early and have no plans to sell but I think we all know a minor pull back is likely but just a small bump n the road to over a 1000 in the next 18 months

  • Report this Comment On March 29, 2012, at 12:47 AM, dandles2020 wrote:

    I just bought the new iPad. Hasn't gotten warm even after several hours of reading, surfing the net and playing games. I'm wondering where people notice the heating up or if it's only in some units.

  • Report this Comment On March 29, 2012, at 3:07 AM, mesmd wrote:

    Anders,

    You are wrong again about Apple. you Should admit your mistakes and be contrite like Chris did in his article,"I was wrong." He had advocated shorting Apple in the past and realized he got it wrong. Apple is unstoppable for the next several years; it creates what consumers want and find most useful.

  • Report this Comment On March 29, 2012, at 6:20 AM, TMFZahrim wrote:

    @dandles2020, Consumer Reports and others got the iPad to heat up by running intense workloads for a long time. Unless you're into iPad-based FPS games, this probably won't happen to you. Like I said above, not a big deal.

    Anders

  • Report this Comment On March 29, 2012, at 9:30 AM, lojikfool wrote:

    My dear old friend, it's called marketing, Fool. They still can't keep up with demand. Just wait until they do innovate with form factor, or put in oled, launch itv, or become standard for enterprise or penetrate China. Please save your embarrassment and reverse your call, I see 700 plus after 3Q results...

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