Why the Apple iPad will fail in Australia

Why the Apple iPad will fail in Australia

Summary: Like many of you reading this article, I got up at a ridiculous hour of the morning on 28 January to witness the public birth of the latest fruit of Steve Jobs' fertile mind. I speak, of course, of the Apple iPad.

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TOPICS: Apple, iPad
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commentary Like many of you reading this article, I got up at a ridiculous hour of the morning on 28 January to witness the public birth of the latest fruit of Steve Jobs' fertile mind. I speak, of course, of the Apple iPad.

Since that time there has been countless debate about how Apple's latest device will fare in Australia when it hits our shores in late May. What kind of mobile access plans will telcos like Telstra and Optus launch to support it? We don't know. How much will it sell for? We don't know. How big will the catalogue of iBooks in Australia be? Again, we don't know.

If you're detecting a trend here, it's because we don't know much. Gizmodo might be leaking Apple news in the US left, right and centre (hello, next-generation iPhone), but in Australia it's rare that any real nugget of information escapes the company's all-encompassing reality distortion machine.

There's just not enough information at the moment to know whether the iPad will succeed or fail in Australia. But here are five reasons why it might fail.

1. The need to sign up for an additional mobile plan

Unlike the iPhone, you won't be able to make calls on your iPad. But if you want to be able to browse the web and work on your emails when you're away from your home or work Wi-Fi networks, you'll need to sign up for an additional monthly mobile plan. If you already have a mobile phone plan and a 3G data plan for your laptop, you might not be that keen on your wallet getting hit again each month.

So far there has been no indication that Australian telcos will offer a bundled package, where your iPad data costs could simply come out of a merged plan with your mobile. Instead, they appear to be treating the device as just another laptop-style 3G device that will connect to their networks and suck up expensive data.

2. The Australian technology tax

Many technology vendors charge Australians significantly higher prices for the same products than US residents. Apple has been guilty of this over the years — the US$199 iPhone 3GS (on a 24-month plan) ended up costing Australians significantly more.

The iPad starts at US$499 in the US, with the top-end model going for US$829. When the Australian technology tax is applied, you can expect to be paying more than a grand for that top-flight edition, which is more than some laptops. And the low-end models will likely go for AU$600 or more.

At US$279 for the international edition, Amazon's Kindle begins to look competitive. Do you really need a colour screen if you just want to read ebooks?

3. The predicted lack of Australian iBooks

Speaking of ebooks, Apple has been decidedly reticent about disclosing whether, and to what extent, its iBook store application will be available in Australia when the iPad launches here. Although it has advertised for an executive to manage the provision of iBooks (Apple's name for ebooks) locally, it can be expected that it will take several years for the company to negotiate the complex international book publishing agreements that still hamstring the sale of ebooks in the Australian market.

4. The smaller Australian publishing market

Internationally, newspapers and magazines such as the New York Times have been going gaga over the potential for the iPad to rejuvenate their print revenue models — which are shrinking as consumers gradually migrate to digital offerings.

But in Australia, there is a vastly reduced publishing market compared with the US, with much smaller numbers of newspapers and magazines. Sure, large publishers such as the ABC and News Corporation (publisher of The Australian) will roll out iPad applications. And even smaller publications such as SmartCompany are eyeing off the device.

But ultimately there likely won't be enough publishers using the device as an incentive for vast numbers of Australians to migrate to the platform. Will we see massive Australian magazines like Woman's Day on the iPad? Probably not.

5. Existing competition and apathy

Don't get me wrong. There isn't really much existing competition in Australia when it comes to the iPad — at least on paper. There are various Windows-based tablet PCs (usually used in hospitals) and there is the Amazon Kindle and other ebook readers, which are seeing steady adoption.

But, of course, the iPad does so much more than the Kindle — and its user interface and form factor is dramatically better than existing tablets. The real competition for the iPad comes from Apple's own existing mobile offerings in this space.

Australians are a highly mobile race, due to our geographical dispersion around the continent. We have adopted smartphones such as the iPhone and wireless broadband connections in record numbers, and already conduct much of our digital life on the road. The incoming wave of Android-based smartphones such as the HTC Desire is only fuelling that trend.

If you already have a smartphone (which can also function as a rough ebook reader) as well as a thin and light laptop, do you really need a third device to sit in between the two and take up space in your carry bag? That's the question many Australians will be asking themselves about the iPad — particularly with a new model of the iPhone expected out shortly.

It's this likely Australian apathy towards the iPad (especially outside its early technology adopter heartland) that Apple will be facing with its iPad launch in Australia. After all, it's not as if all of Apple's products have succeeded in Australia — the Apple TV being a prime example.

Final words

Ultimately, there is so much we don't know yet about how the iPad will go on sale in Australia. Everything that Steve Jobs touches has a little sheen of gold about it, and there are many Australians who have already gone to great lengths to buy an iPad and they speak very highly of it. So it's possible that sales of the device will blow everyone away and by this time next year, cafes around the nation will be filled with Australians getting their content via an iPad while they sip their latte.

But we're not holding our breath.

Topics: Apple, iPad

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9 comments
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  • "What kind of mobile access plans will telcos like Telstra and Optus launch to support it? We don't know. How much will it sell for? We don't know. How big will the catalogue of iBooks in Australia be? Again, we don't know"

    If you don't know then how can you be so sure it will fail!!! Headline troll.
    grdollar
  • Oh and on item 5 (sorry i had to recomment as this article has so many things wrong with it)...

    Since when was the Kindle available in Australia?

    I have had an iPad for a couple of weeks now and I love it. It is THE device for reading, email, watching vids when not in front of the TV, and surfing when at home, and it (along with Things) has replaced my paper notebook at work. I use it for completely different things as I use my iPhone for. Seriously, you really think an iPhone (or some such device) can be used for reading books or watching videos!!?

    Apple TV hasn't been a success anywhere. Not just Australia. And based on the number of people I see using iPhones, I find it hard to believe that the iPad will not be successful here.
    grdollar
  • the US$199 iPhone 3GS (on a 24-month plan) ended up costing Australians significantly more.

    Hey Renai, get your facts right, that $199 is the upfront cost of an iPhone, and not including the ongoing monthly costs that US customers face. In Australia we have the BEST iPhone deals, with 4 major carriers and outright options (from Apple Retail Stores and Online no less) so it is significantly better here, apart from unlimited data!

    How is the iPad a failure here, when a) you have no clue about what the carriers will do, b) iBooks will launch, soon, and besides that there are 150,000 apps to keep us all busy

    I seriously hate sensational articles with no basis and facts.
    ledzep-f2560
  • I know which one I'd prefer if I want an ereader....

    http://s3.amazonaws.com/atimg/1330548/5_rect540.jpg
    Tinman_au
  • Renai,
    There will no doubt be reasons some Australians won't buy the iPad, but your arguments don't hold much water.

    1. You do not need to sign up for an additional mobile contract - in fact, the cheapest model of the iPad doesn't even have a 3G modem - only wifi. For those who do go for the 3G iPad, you have absolutely no idea whether Apple will or won't negotiate similarly break-thru amazingly cheap pay-as-you-go plans as AT&T offers in the states.

    2. Yes, most countries pay more for US goods than US citizens, but you're forgetting that US$499 price does not include the state and local sales taxes which most US regions add on top which can push that price of the iPad up another 10% or more. With the strong Aussie dollar expect the iPad to be quite competitive here.

    Oh and the Kindle DX which has the same size screen as the iPad is actually only $10 less than the iPad - not very competitive considering how little it does compared to the iPad.

    3. Don't you realise the iPad runs the Kindle app and the Barnes and Noble eReader app and Stanza etc etc, not to mention that the iPad happily accepts any ePub or PDF eBooks that the user may choose to load. You're not just limited to Apple's iBooks, unlike the Kindle or the Nook which absolutely don't allow competing eBook stores.

    4. How does the smaller Aussie publishing market make any difference when you can buy all the international publications from dozens of different eBook vendors and tens of thousands of standalone eBook apps on the iPad? Oh, and considering the demographics that Apple attracts with a far higher proportion of females than other tech companies, I'm sure we will indeed see a Womens Day app.

    5. Okay, let's look empirically at the success of Apple's other related mobile products in Australia to see what chance the iPad has:

    iPod: 70% marketshare
    iPhone: 21% of smartphone market (IDC)
    iTunes Store: 70% marketshare

    Well I think that demonstrates that Apple's mobile products actually do as well if not better (iPhone) than in the USA so your last point actually argues for the success of the iPad.

    -Mart
    marthill
  • ps. I hope it was your editor who chose the ridiculously sensationalist "Apple iPad will fail in Australia" title and not you as it seriously undermines your credibility.

    -Mart
    marthill
  • As an Aussie currently living in the US and who bought an iPhone 3Gs last year not long after arriving, I just want to add my voice to ledzep's regarding total cost of ownership of the iPhone.

    Until arriving in the states I too was under the (misguided) belief that the US provided better deals than Australia. The truth is that the Telcos here are every bit as much "bandits" as they are in Australia (which is not to excuse the despicable pricing practices of any of them).

    Take the present sole provider in the US; AT&T. A so-called $60/month deal actually ends up costing me more than $90/month, because: a) in the US they do not have to declare the taxes (and there are many and diverse taxes, including for instance, DC city tax, DC emergency levy, etc. b) You either haver to buy SMS credits or roll them in with the data plan, at $20/month, minimum.

    Speaking of the data plan, AT&T give you supposedly "unlimited" data. But that is actually bogus, because you cant download apps or podcasts etc that exceed a certain size. In the end, an average iPhone user (that's me) will use about 200-300M/month in data. You would have t be hammering pretty hard to do more than 500M/month.

    Finally, AT&T's coverage in the US is, to be kind, poor outside the major cities (and sometimes even in them).

    So to summarise, before you jump the fence for "greener" pastures, make sure you know what steaming pile is on the other side!
    Tracker_oz-da330
  • personally, i have the kindleDX and absolutely love it. but would also consider getting an apple ipad.

    personally i don't think the ipad and the kindle really compete as e-book readers at all, they both offer such different reading expiriences.

    one thing i absolutely love about the kindle is the massive battery life (over a week), and not being back lit- making it just as handy as a real book.

    personally i would consider an ipad because it also offers amazing portability with its battery life- great for life on the go; because personally i havn't woned anything but a laptop for years, and do find them kind of clunky for travelling around and life on the go- i can't exactly just throw it into my bag just in case i need it/ have some free time like with my kindle.

    personally for me, the price will be the deciding factor.
    nerdyusyd
  • Love stumbling across articles like this. Major LOL :D
    ChrisH3-a9a69