The Gadget That Beats the iPhone 5 -- Even This Week

All eyes were on Apple’s (Nasdaq: AAPL  ) new iPhone this week. Me? I can’t stop thinking about the iPad. I’ve never wanted one more.

Color me among the minority. Much of the coverage here and elsewhere speaks of how Amazon.com’s (Nasdaq: AMZN  ) new Kindle Fire could grow to be a serious threat to iPad sales. I’m not so sure.

Two weeks ago, the Samsung Galaxy 10.1 tablet -- a special preview edition that I got at Google’s (Nasdaq: GOOG  ) 2011 I/O developers conference -- died. Even when fully charged, the screen flashes nothing more than the Samsung logo, the underlying software stuck in an infinite loop.

Pssst, guys? Thanks. No, really.
Give Google and Samsung credit for making me a tablet fan. For all its limits, the Galaxy was great for reading books bought through the Amazon’s Kindle store, watching Netflix (Nasdaq: NFLX  ) movies, and downloading and reading digital comics via the comiXology app. Using the tab for every type of digital entertainment was an experience; yet, it’s on-the-go video that I miss most.

Which, naturally, makes me a potential buyer of the new Fire. Or at least you’d think so, seeing as I’m subscribed to Amazon’s Prime premium shipping service. Trouble is, I’ve already made a substantial investment in iTunes. I subscribe to, download, and watch purchased TV shows on my Mac and our Apple TV. The service ranks second only to Netflix in supplying me video content. YouTube’s custom programming is a not-too-distant third.

Recently, I decided to test how dependent I’ve become on these services. As you read this, I’m a little more than a week into an experiment in which I’ve forsworn anything other than on-demand options for audio and video. The goal? Find out where live TV and terrestrial radio really rank in my menu of entertainment options.

Padding up for the winter
So far, I’m missing neither. Podcasts substitute well for radio while driving, and Amazon, iTunes, Netflix, and YouTube offer plenty of video at home. All that’s missing is on-the-go video, which brings us back to the iPad. Presuming my experiment becomes a habit -- and I think it will -- my best choice for a tablet is one that connects me, seamlessly, to the most programming. Apple’s device has no peer in this area:

Service

iPad

Kindle Fire

Nexus 7

Amazon Instant Video Yes Yes No
Google Play Movies No No Yes
Hulu Plus Yes Yes Yes
iTunes Yes No No
Netflix Yes Yes Yes
YouTube Yes Yes Yes

Source: TMF research.


See the problem? Kindle owners get access to plenty of great content. So do Nexus 7 owners. But only iPad owners get access to iTunes, Netflix, and Amazon’s Instant Video store, arguably the big three among content suppliers. Perhaps that’s why, during this week’s iPhone 5 event, CEO Tim Cook told the gathered audience that iPad accounts for -- wait for it -- 91% of web traffic from tablets.
 

Source: Apple. 

"I don't know what these other tables are doing," Cook said, taking a page from the bombastic songbook once employed by the late Steve Jobs. Yet, he has a point. Cook’s figure matches the latest estimate from ad network Chitika, which put the iPad’s share of web traffic at 91.07% in June. Samsung’s Galaxy ranked second, at 1.77%, with Barnes & Noble’s Nook, third, at 0.85%, and the Kindle Fire, fourth, at 0.71%.

Taking a bite of the Apple
I’ll take the iPad, thanks, even if that means foregoing an iPhone 5 upgrade in the short term. Would you do the same? Weigh in using the space below.

And, remember, if you’re thinking of buying, or already own, Apple shares, now’s a great time to sign up for our premium research service. You’ll get a complete rundown of everything you need to know about the Mac maker, plus a bonus iPhone 5 report with ideas for profiting from the new device. Sign up today to get it all, and enjoy free updates for a year.

Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple, Google, and Netflix at the time of publication. He also had a long-term call options position in Netflix. Check out Tim's web home, portfolio holdings, and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool owns shares of Netflix, Apple, and Amazon.com. Motley Fool newsletter services have recommended buying shares of Google, Netflix, Apple, and Amazon.com. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Motley Fool newsletter services have recommended writing puts on Barnes & Noble. Motley Fool newsletter services have recommended creating a bear put ladder position in Netflix. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, 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 (6) | 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 September 15, 2012, at 12:20 AM, Deverix wrote:

    I'm not sure I understand the point of your article - why is there a trade-off between an iPhone 5 and an iPad? One is a smartphone, primarily used on the go, the other a media device, primarily used in the home on the couch. Most true Apple fans simply buy both. =)

    Frankly, I was expecting your article to mention the rumors of the coming iPad mini (which many expect in October).

    As far as tablets go, we have an iPad and I just bought my son the Nexus 7 and he hasn't picked up the iPad since. We have - perhaps unfortunately - made a significant investment in iTunes. Maybe buying contact that locks you into once manufacturers devices is not that great of an idea...

  • Report this Comment On September 15, 2012, at 12:23 AM, Deverix wrote:

    Whoops - last sentence was supposed to read:

    Maybe buying CONTENT that locks you into ONE manufacturer's devices is not that great of an idea...

  • Report this Comment On September 15, 2012, at 6:08 AM, applefan1 wrote:

    No, that's not the problem. The problem is that the Android platform is a joke, I don't even consider it a real platform to even consider.

    To me, it's just one of those products that gets the attention of stupid consumers and then they realize it was just one of those devices that shouldn't have been on the market in the first place.

    Kind of reminds me of those fake PCs that used to be sold through the resellers that had no business selling computers.

    I don't care what "expert" says about the Android platform. I've been around computers since 1977 and know a phony platform when I see one.

    If I was running my own business, I wouldn't use Android ANYTHING. I just can't take Google seriously as an OS developer. I just can't.

  • Report this Comment On September 15, 2012, at 6:20 AM, applefan1 wrote:

    iTunes doesn't lock you into one platform. They have an interface to the store via Windows and OS X, which are the only two viable OSs out there. Plus, the download music is basically MP3, AAC. Video rentals obviously have to be played on the platform they are rented through (application). iBooks can be read on a variety of OS platforms, if you have the right reader. It's just easier with a Mac.

    Google abandoned their own Podcasting app, because people that create Podcasts prefer Apple.

    Get over it. Android is the odd man out, they don't even have a desktop/laptop OS, so why bother with that platform?

    It's just one more set of computer crap to either learn and forget or just not bother in the first place.

  • Report this Comment On September 15, 2012, at 8:10 AM, TMFMileHigh wrote:

    @Deverix,

    >>I'm not sure I understand the point of your article - why is there a trade-off between an iPhone 5 and an iPad? One is a smartphone, primarily used on the go, the other a media device, primarily used in the home on the couch. Most true Apple fans simply buy both. =)

    And I am, but I don't have the funds to upgrade both devices right now.

    The point is that, being in a position that forces me to choose, I'd rather have the iPad first. I've become hooked on the tablet habit.

    Thanks for writing and Foolish best,

    Tim

    --

    Tim Beyers

    TMFMileHigh, Motley Fool Rule Breakers Analyst, Supernova Odyssey I Portfolio Contributor

    Web: http://timbeyers.me

  • Report this Comment On September 15, 2012, at 8:15 AM, TMFMileHigh wrote:

    @applefan1,

    >>iTunes doesn't lock you into one platform. They have an interface to the store via Windows and OS X, which are the only two viable OSs out there.

    For PCs, sure. For tablets? So far I'd say iOS is the only viable platform, but we know that there is a growing legion of Android users.

    >>iBooks can be read on a variety of OS platforms, if you have the right reader. It's just easier with a Mac.

    The same can be said of Google Play Books but I find that the Kindle Reader app beats them all by a wide margin.

    And that's not a problem for Apple. The iPad aggregates the best of everything in a very sleek package and then charges a premium for the privilege. It's a classic Apple formula that I see working well for a long time to come.

    Thanks for writing and Foolish best,

    Tim

    --

    Tim Beyers

    TMFMileHigh, Motley Fool Rule Breakers Analyst, Supernova Odyssey I Portfolio Contributor

    Web: http://timbeyers.me

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