The iPad had a great opening week and will have a gangbuster first year as it “…changes media” as many pundita are want to crow. But it’s not about this first year. It’s also not about saving the media business, which it won’t.

As most of you know, I’ve evangelized Apple and it’s products for twenty six years. I’m an early adopter of all things Apple, and I have owned several hundred desktops and mobile devices (laptops, iPhones, etc) across my personal life, family and business.

Now we have the iPad.

I’ve found it to be a useful “peripheral computer”, a unique device that complements, rather than replaces, existing computers and smartphones. It also extends Apple’s mobile, touch-based platform (iTunes 9.1 on Mac or Windows is a pre-requisite to set up an iPad, connecting via the device’s dock-USB cable (or an optional iPad USB dock). You also must be running Leopard (Mac OS X 10.5) or later; the iPad won’t even talk with iTunes 9.1 on Mac OS X 10.4.), adding even more energy to a vibrant “ecosystem,” which is controlled from top to bottom by Apple but also benefits from the creativity and hard work of a growing army of third-party developers.

Aside from serving as a media repository (for music, movies, podcasts, photos, audiobooks and ebooks), iTunes also makes backups and controls software (firmware) updates, provides iPad-to-Mac/PC file exchange with selected apps (including Pages, Keynote and Numbers, and some third party apps such as OmniGraffle), and keeps your calendars, contacts, Safari bookmarks and mail account settings in sync with your Mac or PC.

All that said, mind you, there are two revolutionary and profound things going on here:

  1. The iPad’s price
  2. The way in which the iPad is likely to be used, which is fundamentally different than how both computers AND mobile gadgets are used

On price, I don’t mean the price for the full-fledged 3G 64G iPad version ($829), which is way too expensive for a big mobile device (especially with the $30/month AT&T contract). We mean the price for the stripped down WiFi-only 16G version: $499.

And it’s not today’s $499 price that’s important… $499 is still too expensive for what the iPad is. From my vantage point, it’s where the $499 is headed over the next couple of years.

If iPad prices follow the trend of iPod, iPhone, and other gadget prices, we should be able to buy the low-end version for $299 in two years and $199 in three years. At $199, especially, the whole game changes.

Why?

Because of the way the iPad is likely to be used.

One of the primary use cases for the iPad is consuming media and puttering around the house. It’s not walking around (mobile) or working at a desk (office). The iPad is not about productivity benefits (the sales pitch for most PCs and laptops) nor communications benefits (the sales pitch for most mobile computing gadgets). It’s about media consumption and entertainment for the home.

In three years, when the low-end WiFi-powered iPad costs $199, many households will buy 3 or 4 of them and just leave them lying around the house. These iPads won’t be “owned” by any one member of the household, the way PCs and cell phones are. They won’t live on desks, the way desktops do, and they won’t be carried everywhere, the way mobile phones are. They’ll just be there, around the house, on tables and counters, the way today’s books, magazines, games, and newspapers are, booted up, ready to use.

You’ll be able to play two-person games on them (also revolutionary for a handheld device). You’ll be able read newspapers, magazines, emails, books. You’ll be able to tap out and send short messages. You’ll be able to research and shop. You’ll be able to keep and share family calendars. You’ll be able to sit around the breakfast table with each member of the family scrolling through one, the way many families still do with newspapers. You, your children, and your guests will, most importantly, just be able to walk around your house and pick one up.

At $199, Apple will eventually be able to sell tens of millions (eventually, hundreds of millions) of them a year ($199 x 100 million = $20 billion, not counting app and advertising revenue). Eventually, every household will have them. And as long as long as the iPad becomes a platform in addition to a device, the way the iPhone has (and it’s well on its way to doing this), Apple should be able to maintain a very healthy market share.

Eventually, in other words, the iPad should blow away even today’s towering expectations. And it should be amazing for both consumers and Apple shareholders alike.

The iPad, today, is a “peripheral computer” — a highly portable, touch-based, but limited-capability tablet. It is designed to be a companion to a larger, traditional personal computer that provides printing, software updates, media storage, backup and other services that are missing from the mobile tablet.

But, conceptually, the iPad is a blank canvas. The big screen becomes whatever it needs to be. It’s a transformative experience, and it enables the iPad to be something that the iPhone and iPod Touch never could be  – a creator’s tool.

By the way… I’ve been telling you to buy Apple stock most of my adult life. You’ve been reading that on this Blog. I’m saying it again. At $240, it’s still a bargain. Apple creates products you did not know you could not live without until you have them, literally, in your hands. Few companies can say that. Few will try. Apple will likely keep doing so for another twenty six years.

Peace be to my Brothers and Sisters.

Brian Patrick Cork

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