We are now a scant few hours from Apple’s big show in San Francisco where they plan to release their next big thing. Most of the rumoring centers around a tablet device, which while Apple has neither confirmed nor denied, is a pretty sure bet to be released.
Why? Well, simple market dynamics. The Tablet device has been the buzz for many weeks now and the financial markets have come to a certain level of expectation with respect to Apple releasing such a device. If Apple doesn’t announce a Tablet today, it would be disastrous for its stock price, at least in the short term.
There are also rumors swirling that Verizon is somehow involved in the announcement – either Apple will officially end exclusivity with AT&T and offer the iPhone on Verizon and/or the new tablet will use Verizon’s network for its cell phone data services.
Assuming that some or all of this comes to fruition, it probably bears a little forethought before anyone starts to throw money Steve’s way. First of all is the cost. The tablet is expected to run between $750 to $1,000, which is not an inconsequential amount of money. Secondly, data services are not going to be free. If Verizon follows a similar model to its other pure data services, you are potentially looking at another $60 a month in data subscription fees. Verizon (or another cell carrier) may offer a subsidy to purchasers to bring down the device cost, but we don’t know yet. We also don’t know if the tablet will be available in standalone mode without a cell phone plan subscription. Where I live and would do most of my stuff on a tablet device, I have better WiFi access than I do cell phone service, so I would rather not pay for something I won’t (or can’t) use.
A second consideration is that Gen 1 Apple products are not that great. Look back at the original iPod. The first generation device released in October 2001 only worked with Apple Mac computers and required a firewire interface on the computer – something that was not too prevalent in non-Mac computers at the time. It was not until July 2002 when the second generation device was released that Windows functionality was added. Even then it was a kludge as a third party product, Musicmatch was needed for PCs. The third generation iPod released in April of 2003 finally dropped the Musicmatch requirement and supported syncing by USB. In all, it took roughly 18 months from the initial release date to the point where it became a product that was widely attractive.
Let’s look next at Apple’s move to the Intel Processor. The first systems that were announced used the Core Duo processor that was replaced by the more powerful Core 2 Duo barely a year later. Furthermore, some of this first generation notebook series had heat problems -in one particular instance, it was the Macbook Pros that were found to have too much thermal paste on the processor causing them to overheat. Other Macs had fan problems. All of these issues were worked out in Gen 2 and Gen 3 Macs and now Apple offers a solid range of computers.
How about the iPhone? Announced a little more than three years ago, Apple has shipped three versions of the product in a little more than 2 years. If Apple continues on its release schedule, we could potentially expect a new model this summer. The first generation iPhone was a dog – sure it was cool and had some great features, but it lacked support for the number one email service used in enterprises (Exchange), used a slow second generation wireless radio even as other manufacturers shipped 3G devices, didn’t support copy and paste making things like entering in a WPA key for wireless access extremely painful, and didn’t (and still doesn’t) offer the ability to tether it to a PC for use as a wireless modem (which most other smartphones do). Today, however, with its 3GS Apple dominates the worldwide cell phone market.
The point I’m trying to make is that Apple does indeed make cool products, but as I’ve illustrated in three examples of some of their most popular products, they don’t seem to get a new device right initially. It is usually a Gen 2 product released 6 months to a year later where things really start to shine.
So, as you watch Steve’s presentation today, consider these thoughts before whipping out that credit card. eBay is littered with low priced Gen 1 Apple devices – with good reason – no one wants them anymore.
