After years of heated speculation, Apple's (NASDAQ:AAPL) newest wunderproduct was announced today. Yes, we'd all grown tired of rampant tech-gossip, so in case you've tuned out, I'm proud to report that the product did not contain any of the following "rumored features":

  • A flexible OLED screen.
  • A screensaver of Steve Jobs ... in nothing but a turtleneck.
  • An application that can make you piping hot biscuits every morning.
  • The name "Newton Version 2.0".
  • A holster for your iPhone.
  • An iPurse to go with the iPad: The iMan-Purse.
  • A pony.

While I am disappointed by the lack of a pony, the iPad does come with a number of other features:

  • A large, 9.7" screen, tuned specially for a rich Web-browsing experience and watching HD videos.
  • 10 hours' of battery time for those long cross-country flights and couch browsing.
  • A homebrewed chip -- looks like Apple finally got some use out of that PA Semi acquisition -- that clocks in at 1 GHz and contains between 16 and 64 gigs of flash storage, depending on the model.
  • Support for the App Store, which should give game developers a more powerful platform to develop on. The iPad also has instant compatibility with existing iPhone and iTouch apps.
  • An iBooks storefront aimed directly at Amazon (NASDAQ:AMZN) and Barnes and Noble's (NASDAQ:BKS) e-reader devices.
  • Support for business productivity program iWork.
  • The option of a $30-per-month unlimited data plan from AT&T (NYSE:T).
  • A much lower price than expected: $499-$829 depending on the model.

To boil the iPad down into a single sentence: It's an enormous iPhone.

Taking a step back
Before we crown the iPad as Apple's next iPhone-level winner, it's worth taking a step back and analyzing what hurdles remain. Here are some factors that have held up previous attempts at bringing tablets mainstream:

  • The Consumer Electronics Association predicts flat growth in laptops for 2010. Granted, the iPad isn't exactly a laptop, but the overall "spending pie" on high-priced electronics isn't going to grow much. As such, the iPad may need to act as a replacement for laptops and other full-functioning computers, rather than as an incremental electronics purchase for consumers, if it wants to hit more aggressive sales targets.
  • The iPad still needs to carve out an elusive "tablet niche." Microsoft's (NASDAQ:MSFT) Bill Gates famously claimed in 2001 that tablet computers would be the No. 1 selling kind of PCs within five years. Granted, Apple has gone out of its way to create a superior user interface for the iPad, but that didn't stop Steve Jobs from reportedly asking questions during the tablet's development, like: "What [are tablets] good for besides surfing the Web in the bathroom?"

And that's really what the main question surrounding the iPad boils down to: What's the demand for this type of electronics form factor? The iPad sits in a niche that's too large to function as a truly mobile device like the smartphones offered by Apple, Research In Motion (NASDAQ:RIMM), and Motorola (NYSE:MOT), but it lacks the full functionality and built-in physical keyboard that users still demand for more intensive computing needs.

It's not that I don't see the iPad being adopted by hoards of early adopters and selling like hot cakes initially. Amazon proved with its Kindle that many users will pay up for "tweener" devices that are often an incremental purchase after a laptop and smartphone. Also, the base $499 price point is impressive and should help sway buyers from the red-hot netbook segment over to the iPad's corner. However, I do think the hype got ahead of the addressable market for the iPad. It'll be a nice product, but there's not as much demand as there was for iPod and iPhone-type products.

Does it need to be a megahit? No ...
Now, before any Apple fans jump down my throat, I actually think this is fine. Why? As Apple's first-quarter earnings helped show, Apple's P/E ratio has recently been artificially elevated by deferred accounting practices. On other measures like cash flow, and EBIT to enterprise value, Apple holds up fairly well at its current valuation. There are not a whole lot of people calling Apple cheap, but the P/E-driven fears of its stock price are also overblown.

In other words, Apple doesn't need the iPad to be an iPhone-like success to sustain its current price levels. If the product's more of a hit than I give it credit for, think of it as some nice icing on the iEmpire's cake.

We'll have more analysis on some of the iPad's other features tomorrow. For now, feel free to share your thoughts on Apple's iPad in the comments area below!

Eric Bleeker owns shares of no companies listed above. Microsoft is a Motley Fool Inside Value pick. Apple and are Motley Fool Stock Advisor recommendations. Motley Fool Options has recommended a diagonal call position on Microsoft. Try any of our Foolish newsletters today, free for 30 days. The Fool's disclosure policy is presented in full 3-D, and unlike Avatar, it isn't just a ripoff of Disney's Pocahontas.