Will the tablet change the game?
There was so much hype around Steve Jobs’ new iPad that some were heralding it as the Jesus Tablet.What Apple unveiled Wednesday in San Francisco isn’t the Second Coming, but it does give Hollywood something to cheer about. At a time when a growing number of people are accessing entertainment on the go, the iPad provides studios and networks with yet another attractive platform on which they can digitally distribute movies, TV shows, music, games and other content–and put more coin in their coffers. Hollywood can’t afford to ignore the iPad. Jobs reinvented the way consumers listen to music with the iPod, and then movies and TV shows with iTunes and video versions of the iPod and iPhone. He got consumers to open their wallets and get used to paying for downloadable content at a time when it looked as if piracy would take down Hollywood for good. And Jobs won’t let anyone forget that. While unveiling the iPad, which he described as “magical and revolutionary,” he boasted about having sold 250 million iPods, that 75 million people own iPod Touch and iPhones, and that iTunes and the App Store already have 125 million credit cards on file. More than 3 billion apps have been downloaded from the App Store over the past 18 months. Given the success of his devices, Jobs has the right to brag but that wasn’t his point: He wanted to stress that there won’t be a learning curve to use the iPad; consumers already know how to use it. “Apple is the largest mobile devices company in the world now,” when it comes to revenue, Jobs said, looking thin but energetic in his usual black mock-neck, jeans and white sneakers. “That’s what we do.” And that will help Jobs in using the iPad as his next platform for repackaging media with a shiny new device and overhauling the media biz as we know it. While the thin device, weighing just 1.5 pounds and smaller than a letter-sized piece of paper, resembles an oversized iPhone Touch — and does all of the same things — the iPad aims to be a glorified netbook that consumers use to read, watch, play and search for entertainment. In developing the device, which boasts an impressive 10-hour battery, able to run in standby mode for a month, Jobs said it needed to successfully surf the web, send e-mails, display photos, play music and video (even in HD), offer games and eBooks. “All of us use laptops and smartphones now,” Jobs said. “The question has arisen lately, is there room for a third category of device in the middle? The problem is netbooks aren’t better at anything. They’re just cheap laptops. We think we have something better.” Apple initially will use the iPad to prove it’s better than Amazon’s Kindle and control a bigger piece of the digital book biz. While Amazon has never revealed specific sales figures, its Kindle is believed to be the top-selling eReader, with Sony and Barnes & Noble competing strongly for second place. Nearly 40 different eReaders are expected to flood the market by the end of the year. With its colorful screen and various functions, not to mention Apple’s hefty marketing budget, the iPad could quickly dominate sales, however, and offer a way for newspaper and magazine publishers to generate new revenue streams, as well. The New York Times, the Wall Street Journal and Condé Nast Publications will offer their titles on the device. “Amazon’s done a great job of pioneering this functionality with the Kindle,” Jobs said. “We’re going to stand on their shoulders and go a bit further.” Apple already has deals with five of the major publishers (Penguin, Harper Collins, Simon & Schuster, MacMillan and Hachette), who were attracted to the company’s flexible pricing. Whereas Amazon charges $10 per eBook, when Steve Jobs demonstrated the purchasing aspects of its new iBook Store, Sen. Ted Kennedy’s “True Compass” memoir was priced at $15. None of that may affect Amazon, in the long run, though. The portability and simplicity of its Kindle may still be what many eBook readers are looking for and turn them off to the iPad and its bells and whistles. Either way, the combination of apps like the NY Times and the iBooks software puts Apple in position to do for print media what it did for digital music with iTunes, the iTunes store and the iPod: dominate the space by providing a simple, consumer-friendly system that will entice consumers to pay for content. That didn’t save the record labels, exactly, but it did make Apple a great deal of money. Apple also is touting the iPad as a gaming device, a niche where Apple historically has been weak. It showed off games like “Need for Speed,” from Electronic Arts, where a race car is controlled by holding the iPad like a steering wheel. Game developers are being invited to see the touchscreen computer as a new kind of device that doesn’t require a joystick or controller. But it’s how many movies and TV shows that the iPad can sell that will impress Hollywood the most. Jobs used “Star Trek” and “Up” as examples of the quality of video playback on the device. He is said to be looking to introduce subscription services with TV networks soon. “We’re always excited about new technologies that offer an intuitive consumer experience with greater accessibility to the content people want. The iPad is a great new device that opens up tremendous growth opportunities for us and other content providers. When people have a great experience, they consume more of the content they like, whether it be sports, books, games, TV or movies, and they are willing to pay to do so,” said Robert A. Iger, president and CEO, the Walt Disney Co. Time will tell whether consumers feel the iPad is the great experience they’re looking for — and are willing to pay for. But at a starting price of $500 that peaks at $830, depending on the size of the flash drive, Apple can expect to move a lot of iPads when they start to ship within the next two months. (Chris Morris and David Cohen contributed to this report)
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