iPad Business Model

[tlevier]

Today's earnings release will provide some light on just how many iPads have been sold in the first full quarter on the market. Seemingly, Apple can't make enough of these devices. Kudos.

Here's where I am cautious. I think Apple's plan for the iPad is to update it annually much like the iPhone. Okay, I like having good state of the art devices at the time I buy them. However, the software gets updated annually too and I'd wager that the current iPads that are being sold in mass quantity won't ever see the light of iOS 5. iOS 4 might be a stretch of the resources as it is.

Do you think people that are buying this first generation iPad are going to be upset when Gen 2 gets released? Or will they buy a new device and "hand me down" the old device?

 

[pelicanflip]

Today's earnings release will provide some light on just how many iPads have been sold in the first full quarter on the market. Seemingly, Apple can't make enough of these devices. Kudos.

Here's where I am cautious. I think Apple's plan for the iPad is to update it annually much like the iPhone. Okay, I like having good state of the art devices at the time I buy them. However, the software gets updated annually too and I'd wager that the current iPads that are being sold in mass quantity won't ever see the light of iOS 5. iOS 4 might be a stretch of the resources as it is.

Do you think people that are buying this first generation iPad are going to be upset when Gen 2 gets released? Or will they buy a new device and "hand me down" the old device?

I bought the iPhone when it first came out (1st Generation). I knew that at some point, my iPhone would become outdated by one of Apple's refreshes.

I wasn't upset, because that's how the technological market works, updates are made, newer models are released, and older models just don't quite cut it.

Same thing with my iPad. I bought it knowing that it isn't just a permanent end product, that there will be more to come.

At some point, I'll sell my iPad and upgrade to a newer model, but who knows when that'll be.

 

[gatearray]

I honestly don't think that iOS 4 will be a stretch for the iPad's current hardware, as you mention. The A4 chip in the iPad seems to be clocked faster than the A4 in the iPhone 4, and as for that extra RAM in the iP4 that many around these forums are completely obsessed with, I have to think that it was necessary for HD video recording more than anything else, something that the iPad obviously doesn't have to contend with.

For a little more evidence, look at iOS 4 running on an iPhone 3GS-- it works beautifully and is very snappy. In fact, it was almost enough to make me change my mind about picking up an iPhone 4, it's just that good and felt like a brand new device to me. And the hardware in the 3GS is 256mb RAM with a significantly slower processor than the iPad, so I think iOS 4 will absolutely scream on our first gen iPads, but time will tell...

As for iOS 5, who knows?

 

[saberahul]

I honestly don't think that iOS 4 will be a stretch for the iPad's current hardware, as you mention. The A4 chip in the iPad seems to be clocked faster than the A4 in the iPhone 4, and as for that extra RAM in the iP4 that many around these forums are completely obsessed with, I have to think that it was necessary for HD video recording more than anything else, something that the iPad obviously doesn't have to contend with.

For a little more evidence, look at iOS 4 running on an iPhone 3GS-- it works beautifully and is very snappy. In fact, it was almost enough to make me change my mind about picking up an iPhone 4, it's just that good and felt like a brand new device to me. And the hardware in the 3GS is 256mb RAM with a significantly slower processor than the iPad, so I think iOS 4 will absolutely scream on our first gen iPads, but time will tell...

As for iOS 5, who knows?

I installed iOS4 on my iPod Touch 3G which is pretty much same as 3GS. The iPad, specs wise, is far superior to the touch. So far I have absolutely no problems in terms of speed or multi tasking on the touch. I don't see how there will be a problem on the iPad. Regarding the refresh cycle - it's a given fact that after about 3 yrs or so the iPad 1 G will not be able to handle the latest software updates such as the iPod touch 1 G now. That is how market works and if they allowed that, how will they make their business? Best is to purchase now - sell later - purchase another one - sell later - keep going I guess. Of course I'm assuming 2012 doesn't hit us hard.

 

[poloponies]

Today's earnings release will provide some light on just how many iPads have been sold in the first full quarter on the market. Seemingly, Apple can't make enough of these devices. Kudos.

Here's where I am cautious. I think Apple's plan for the iPad is to update it annually much like the iPhone. Okay, I like having good state of the art devices at the time I buy them. However, the software gets updated annually too and I'd wager that the current iPads that are being sold in mass quantity won't ever see the light of iOS 5. iOS 4 might be a stretch of the resources as it is.

Do you think people that are buying this first generation iPad are going to be upset when Gen 2 gets released? Or will they buy a new device and "hand me down" the old device?

On behalf of everyone else here, I'd like to welcome you to the world of technology. How exactly does your theory of the iPad differ from any other device? There's very little that any company can do today to anticipate the needs of 2 years from today. Add into the equation the enormous amount of competition and innovation and looking even a year ahead with certainty is a stretch.

Of course there will be features and functionality in an OS that won't be out for another year that will maximize the technology available then -- and not everyone with a legacy device will be able to take advantage of that.

As people here have repeated ad nauseam - none of that will affect how the device you own today will continue to function.

 

[n0de]

I am sure that iOS4 and most likely 5 will run fine on the first generation of iPad, but I think the long term business model Apple has banked on may not hold true with the iPad.

We all tend to behave as though phones are disposable, regardless of the price. The iPad on the other hand, because of the nature of the device will most likely not be treated the same way. Apple counts on a large number of us to upgrade our phones every year or two - I bet (with the exception of the true fanboy base) the iPads will have a longer lifespan to most owners and not be replaced so quickly.

 

[spinedoc77]

I am sure that iOS4 and most likely 5 will run fine on the first generation of iPad, but I think the long term business model Apple has banked on may not hold true with the iPad.

We all tend to behave as though phones are disposable, regardless of the price. The iPad on the other hand, because of the nature of the device will most likely not be treated the same way. Apple counts on a large number of us to upgrade our phones every year or two - I bet (with the exception of the true fanboy base) the iPads will have a longer lifespan to most owners and not be replaced so quickly.

Well they update their laptops every year, other than the Air, so I'm sure they will do the same with the ipad. At $499 for the cheapest one it's certainly much more of an impulse buy every year than a laptop.

 

[Doylem]

What... you mean there'll be new, updated gizmos to buy, at some unspecified time in the future? Well, I'll be damned...

 

[pelicanflip]

What... you mean there'll be new, updated gizmos to buy, at some unspecified time in the future? Well, I'll be damned...

Death Grip 2.0, here we come. Now, it's no longer a matter of how you hold it. If you touch the iPhone at all, it doesn't work.

Now presenting Apple's new line of bionic arms. Way to go Steve Jobs.

 

[Scuby]

If anything i'd rather see apple release updated models every 6 months, not slow the refresh rate. While it means you (and i) won't have the cutting edge model for quite as long, it does mean that people aren't stuck with the difficult decision of whether to buy the 10month old model, which will by then be seriously over-priced compared to the competition, wait 2 months for the next Apple version, or buy something else.

 

[PBG4 Dude]

What... you mean there'll be new, updated gizmos to buy, at some unspecified time in the future? Well, I'll be damned...

Unless your name is Mac Pro, yes.

 

[tlevier]

On behalf of everyone else here, I'd like to welcome you to the world of technology. How exactly does your theory of the iPad differ from any other device? There's very little that any company can do today to anticipate the needs of 2 years from today. Add into the equation the enormous amount of competition and innovation and looking even a year ahead with certainty is a stretch.

Of course there will be features and functionality in an OS that won't be out for another year that will maximize the technology available then -- and not everyone with a legacy device will be able to take advantage of that.

As people here have repeated ad nauseam - none of that will affect how the device you own today will continue to function.

Thanks for the welcome!

I think to clarify a bit more, Apple's development seems to move at a faster clip than its production. iPad sales are continuing to pressure production and with Holidays coming up, might actually put a choke hold on production. If 3 million 1st Gen units went out the door for the Holidays and potentially many units were back ordered and delivered in Mid-February - would those customers feel disgruntled if there was a Mid-March announcement of "bigger and better iPad"?

With the iPhone, Apple has been doing a great job of making sure that "last year's" model is still relevant. 3G worked well with 3GS. 3GS works well with iPhone 4. Apple does that because they know people are locked in to 2 year contracts and are on an "Every Other Year" cycle. With the iPad, people don't have a frame of reference for when they should be updating their hardware, so it will be interesting to see what it ends up being.

I agree with another poster that it should be every 6 months with "minor" improvements every time. But I think there may be some PR issues if the original iPad loses "support" after 2 years. 3 years would be the soonest I would expect original iPad to be fazed out.

Thanks for reading my ramblings...I apologize that you've wasted your time on me, but I appreciate the attention. Perhaps we can be friends?

 

[redscull]

They may update laptops yearly, but there is far less pressure to replace a laptop, regardless of the price. My 3Ghz MBP from 2009 will hold its own or beat an i5 MBP in most applications. Only games would fair better, and that's because of the better graphics card. But I didn't buy my MBP for gaming (really the only reason to upgrade a computer annually), so I imagine it will continue to excel at what I bought it for for many years.

They also don't drop Mac OS support in such a short time frame. I bet it'll be a long time before an Apple OS comes out that can't be installed on today's Apple hardware. But iOS, that's already made a 3 yr old device fully obsolete, and a 2 yr old device somewhat obsolete.

Thanks to subsidies, a new phone is only $200 every couple years. That makes it feasible to stay on top of technology. And I don't care about a 2 year contract because, let's be honest, there is no question in my mind that I will maintain cell service for the next two years, contract or not.

But an iPad costs a lot more than an iPhone. It costs more than most netbooks. The top iPad costs nearly as much as a MacBook. That isn't something I want to replace every couple years. It's just too expensive. I hope that Apple doesn't make a 2 yr old iPad obsolete. I buy my own phones, and pay my "maintenance" on that every couple years. But an iPad is something I could see giving as a gift. I don't want to be expected to "refresh" that gift every couple years.

 

[jclardy]

The problem with replacing the iPad every year is price. The high end iPad 3G costs almost $900. At that price the iPad costs more than many laptops and almost as much as a Macbook.

I think what Apple will do next year is still a hardware upgrade, but not a huge one. Maybe a faster processor, double the ram, and front facing camera. Since in a year these upgrades will be a bit cheaper I could see them dropping the price by $100 to solidify its place in the market. Of course, if they can't produce enough iPad's then the price drop probably won't happen because there will be a huge increase in buyers.

 

[poloponies]

They may update laptops yearly, but there is far less pressure to replace a laptop, regardless of the price. My 3Ghz MBP from 2009 will hold its own or beat an i5 MBP in most applications. Only games would fair better, and that's because of the better graphics card. But I didn't buy my MBP for gaming (really the only reason to upgrade a computer annually), so I imagine it will continue to excel at what I bought it for for many years.

They also don't drop Mac OS support in such a short time frame. I bet it'll be a long time before an Apple OS comes out that can't be installed on today's Apple hardware. But iOS, that's already made a 3 yr old device fully obsolete, and a 2 yr old device somewhat obsolete.

Thanks to subsidies, a new phone is only $200 every couple years. That makes it feasible to stay on top of technology. And I don't care about a 2 year contract because, let's be honest, there is no question in my mind that I will maintain cell service for the next two years, contract or not.

But an iPad costs a lot more than an iPhone. It costs more than most netbooks. The top iPad costs nearly as much as a MacBook. That isn't something I want to replace every couple years. It's just too expensive. I hope that Apple doesn't make a 2 yr old iPad obsolete. I buy my own phones, and pay my "maintenance" on that every couple years. But an iPad is something I could see giving as a gift. I don't want to be expected to "refresh" that gift every couple years.

Oh, good lord. Really? An iPad with an imagined incapacity to load an iOS 5 that isn't even available yet (and is a year off, at best) would be obsolete as a consequence?

 

[nixiemaiden]

If some of the other tablets that are set to release this fall or winter do half of what they say they can do apple is going to have to update in the spring. I know the only reason I got the iPad is because there is no other good option right now and I'm impatient.

 

[tlevier]

They may update laptops yearly, but there is far less pressure to replace a laptop, regardless of the price. My 3Ghz MBP from 2009 will hold its own or beat an i5 MBP in most applications. Only games would fair better, and that's because of the better graphics card. But I didn't buy my MBP for gaming (really the only reason to upgrade a computer annually), so I imagine it will continue to excel at what I bought it for for many years.

They also don't drop Mac OS support in such a short time frame. I bet it'll be a long time before an Apple OS comes out that can't be installed on today's Apple hardware. But iOS, that's already made a 3 yr old device fully obsolete, and a 2 yr old device somewhat obsolete.

Thanks to subsidies, a new phone is only $200 every couple years. That makes it feasible to stay on top of technology. And I don't care about a 2 year contract because, let's be honest, there is no question in my mind that I will maintain cell service for the next two years, contract or not.

But an iPad costs a lot more than an iPhone. It costs more than most netbooks. The top iPad costs nearly as much as a MacBook. That isn't something I want to replace every couple years. It's just too expensive. I hope that Apple doesn't make a 2 yr old iPad obsolete. I buy my own phones, and pay my "maintenance" on that every couple years. But an iPad is something I could see giving as a gift. I don't want to be expected to "refresh" that gift every couple years.

Thanks Redsull. You nailed it on the head. Very astute and articulate...way better than me.

 

[shakenmartini]

Today's earnings release will provide some light on just how many iPads have been sold in the first full quarter on the market. Seemingly, Apple can't make enough of these devices. Kudos.

Here's where I am cautious. I think Apple's plan for the iPad is to update it annually much like the iPhone. Okay, I like having good state of the art devices at the time I buy them. However, the software gets updated annually too and I'd wager that the current iPads that are being sold in mass quantity won't ever see the light of iOS 5. iOS 4 might be a stretch of the resources as it is.

Do you think people that are buying this first generation iPad are going to be upset when Gen 2 gets released? Or will they buy a new device and "hand me down" the old device?

If the 3Gs iPhone can run iOS 4 (which it does) the iPad will have no problem.

Apple will continue with their model of new hardware annually and 1-2 point releases per year with a full OS update annually. These releases will support hardware for 2-3 years back.

As the current hardware stands, it will almost certainly be fine to iOS5. Remember, the original iPhone was able to run all OS's up until 4, that is pretty good consistency and staying power for such a constrained device.

For the iPad there really is not much a hardware upgrade will really do.

Right now it works extremely well for what it is and what its resources are. Yeah, I'm sure 512 megs of RAM would be nice, but it does not NEED 512.

My guess is that iPad 2 will be worth the upgrade when they do two things...

1) "Retina" display
2) Carrier independent 4G wireless

Other than these, the iPad already does what it needs to exceptionally well, so there is no real mass market appeal to hardware specs (apple has already demonstrated quite nicely that the public at large doesn't care bout specs, they care about what it does).