iPad: The wider implications of Steve Jobs' new creation

OK, so yesterday, Steve Jobs lifted the veil of secrecy surrounding Apple's newest creation, even unhooking the velvet rope and allowing members of the press to briefly fondle "hot off the production line" iPads. But let's put the actual iPad aside for a moment and think about the wider implications of this device being unleashed on the consumer electronics market.

Special Report: Apple Tablet

OK, so yesterday, Steve Jobs lifted the veil of secrecy surrounding Apple's newest creation, even unhooking the velvet rope and allowing members of the press to briefly fondle "hot off the production line" iPads. But let's put the actual iPad aside for a moment and think about the wider implications of this device being unleashed on the consumer electronics market.

Check out the iPad image gallery!

First off, price. $499 for the base model isn't exactly cheap, but for a tablet based system, it's not expensive either. Steve Jobs once said that "we don’t know how to make a $500 computer that’s not a piece of junk." Well, this might not be a personal computer in ever sense of the word, to most people it's computer. It's got the Apple logo on it, it's sexy looking, and it's under $500. Put this next to a $599 Mac mini and which are people going to think is the better deal?

The problem with the low end of the market, the sub-$600 market, is that over the past few months it's been dominated by netbooks, which while being good for certain applications, have represented a race to the bottom between the OEMs in terms of price and features. A $499 iPad opens up Apple ownership to a whole new market segment, and PC OEMs now need to be aware that a budget price doesn't mean a budget experience for the user. My guess is that folks at OEMs such as ASUS and Samsung are already sketching out ideas.

Another pressure point that the iPad is now firmly applying pressure to is devices that offer web access but don't offer a rich browsing experience. Apple's managed to deliver a good web experience on a small screen (iPhone/iPod touch) and is now scaling that up to a bigger screen. If Microsoft doesn't get its act together with Windows Mobile and IE for mobile devices soon, it's going to be little more than a joke.

Where does this leave Amazon's Kindle and B&N's Nook ebook readers? Well, again, it's not good. While Amazon and B&N have managed to lock in users to their respective devices thanks to DRM (and before you all jump on me, I'm not saying that the iPad represents any less of a lock-in), but again, the iPad makes these devices seem like one-trick ponies that are starting to go a bit grey. I'm not saying that the iPad is a Kindle/Nook killer, or that it needs to be, but Apple's seen a revenue stream that it wants in on. My guess is that Apple wants to be in a position where it can set the price for ebooks (and probably newspaper/magazine subscriptions), which would certainly shake up the market.

Then there's iWork apps for the iPad. This is a really big deal. Why? Because Apple's plan is to bring a cheap office suite ($9.99 for each app) consisting of Pages (word processor), Pages (spreadsheet) and Keynote (presentation) to the tablet.

Here, rather than try and shoehorn a desktop suit onto a tablet (Microsoft's preferred solution), or resort to web apps (Google's approach for Chrome OS), Apple has put together a custom application specifically designed for the tablet. Combine that with the fact that these file formats will be compatible with iWork on the desktop, and you start to see why these are a big deal.  Again, this puts pressure on hardware vendors to get both the hardware and software side of a product sorted before launch.

Finally, gaming. It's too early for a final verdict, but those gaming demos seemed really cool. The price might be a little high to compete directly with the likes of the Nintendo DS, but when you factor into the equation the price of the games for the iPhone platform on iTunes compared to game cartridges for the DS, the $499 price tag is easier to swallow.

Mark my words, the iPad will have the same effect on the tablet/budget end of the PC market that the iPhone had on the smartphone market.