August 04, 2010

5 Things the Next Generation Apple (AAPL) iPad Must Address | Wall St. Cheat Sheet

Today TechCrunch put out an article asking “Did the iPad Preemptively Kill the US Tablet Market?” And I feel compelled to respond with a resounding “I hope not!”

I am the consummate early adopter of technology and already have a Mac Pro and until recently had an iBook laptop (ole trusty finally broke down after 4 years of aggressive use). For quite some time I have loved Apple (NASDAQ: AAPL), as both an electronic innovator and a stock.

I had been eagerly anticipating the iPad’s release, as its announcement perfectly coincided with the untimely death of my aforementioned iBook. In anticipation of the release, I decided to pass on the Barnes and Noble (NYSE: BKS) Nook I had won in a charity poker tournament and even bought the Western Digital My Book World 2 Terrabyte wireless external hard drive as my future data storage hub.

What I expected was a device that could function as a computer itself. Not something to complement my existing computing capacity. No. I wanted a tablet that could do everything that my iBook could do. When Apple announced the iPad in late January, I was instantly disappointed. My initial impression was that Apple’s goal was to create a pretty awesome tablet, while simultaneously preserving its capacity to upsell new Apple adopters to the Mac line of computers. Awesome alone didn’t cut it for me.

Clearly many consumers did not share my disappointment, as sales have soared past most expectations. However, that does not change the fact that there is significant room for improvement in the tablet market. Without further ado, here are the 5 things the next generation iPad must address to turn me into an eager buyer:

5. The lack of open source software.
This has been cited a problem for Apple since the early days of the company. While the Internet has helped eliminate some of the questions about software access for computing, the apps market is a feature attraction of the new mobile computing market. Google’s (NASDAQ: GOOG) Android has opened itself up to anyone to build an app, whereas Apple has set barriers to entry for its market. This has been a major factor in Google’s increasing momentum in the smart phone market and has the potential to do even more damage when it comes to Tablet Computing.

4. No changeable battery.
This has been an area in which Apple has fallen short for some time now. The iPad, like the iPod does not have a replaceable battery. While this isn’t much of a hurdle for a music device, for a computing device the story is quite different. There are numerous reasons why one would want the ability to quickly and easily insert a new battery in a “computer replacement” product. It’s far easier to go a day or two without an iPod than it is an iPad.

3. There is no scalability to the hardware.
To someone who wants more RAM on their iPad, Apple said: “no, not an option.” To someone who wants more hard drive space, Apple again said “no, not an option.” Considering how standard the SD card has become, why is it that Apple couldn’t build that capability into the iPad? There are now super-sized SD cards available for all sorts of portable technology, yet the iPad, which aims to be the most important tool in an individual’s mobile electronics arsenal, falls short of impressing. To be a true computer replacement there needs to be some kind of user-friendly scalability. Adding an SD card is simply too easy to pass up on.

2. There’s no USB drive.
Many people run third party hardware through their computer. Some may want a USB mouse, others may want to connect their digital camera to their computer for uploading pictures. Sure the future is in wireless transfers, but right now USB is an important reality for computing. There are countless reasons why someone might want that kind of access, yet the iPad has not a single USB port at all. USB is such a ubiquitous technology across electronic platforms that it’s even included in most new HDTVs as a standard feature, but not the iPad!

1. The inability of the iPad to function independently of a computer.
In many ways, number 1 is the culmination of all the previous critiques. The thing is, in aggregate, the iPad cannot replace a computer, it can only work along side it. Sure there are plenty of uses for the iPad independent of a computer, but in reality, it’s capabilities have been limited by Apple as a company making a conscious choice to limit it. Should Apple preclude competition from entering the iPad market, then they would have great authority in maintaining these limitations; however, should innovative competition emerge, the pressure on Apple would increase substantially to improve their own product (just see the DRM debate).

Disclosure: Long AAPL, GOOG

5 Things the Next Generation Apple (AAPL) iPad Must Address | Wall St. Cheat Sheet

A sleek looking iPad.

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