iPad - Revolution, oversized iPod Touch or the New Newton?

OK, the obligatory iPad post............

The tech Apple fanboi press has been hyped to the gills, the tech journosphere has been shown wanting, the jokes have abounded - but what is the iPad's likely future - is it possible to predict? Is it "the most important thing Apple has ever done"?

No, of course not - technically it is using a lot of the technology already in the iPod and iPhone, in many ways its a fairly linear evolution ("gimme something like an iPod Touch but with a bigger screen"). Not only that, it doesn't define a new market - tablets have been dreamed of since PC's first emerged (and before).

But it is standard Apple strategy - take a confused market (eReaders, crap tablet PCs, Netbooks) and drive an iconic device complete with its own end to end content supply chain into it. and as a Cat among Pigeons play its rather good.

We worked on one of the next generation e-Readers (Plastic Logic's) 2 years ago, and research done at the time convinced me that there is a demand for a device that allows you to read and interact with media on a slim A4 style tablet with great print graphics.

By pushing the spec Apple has challenged the e-Reader market - why buy a pure e-Reader when you can get a device with some more interactivity (see the comparisons here). Its also says to the the Netbook and tablet PC market that there is a sort of boned down, lowest common denominator tablet design now in contention.

Is there enough market there to justify a new market, or will it bomb like the Newton? Our take is that 10 years later there is a bigger market to go after (e-Reader, Netbook, tablet) but its still not huge. But given that its an offshoot of existing technology (so low R&D costs) the business case makes sense, and it disrupts some potential competitors (who'd buy a Kindle, now?). So why not?

The one strategic weakness I see is that compared to other tablets this is low cost, that's not Apple's usual schtick - they tend to have smaller production (ie higher costs) of devices that can sell at a higher premium to certain sectors of the market who happen not to be price conscious.

But this device is priced low for a tablet, they may find that margins here aren't like they are elsewhere in the Appleverse, as competitors will (I am sure) come out quite fast now as happened with Netbooks. And this doesn't quite have the same lock-in as a phone.

So - nice play as an extension product, reasonable market to go after, but will be hit by increasing competition far sooner than in Apple's other recent forays. However, by integrating iPod and iPhone I'm sure it can insulate itself from the competition, for a year or so anyway.

Update - I see Dave Terrar has some interesting thoughts, and Google's Eric Schmidt agrees with us - eventually