Four Reasons Apple iPad Can't Miss

Stock quotes in this article:AAPL, HPQ, MSFT 

B) Pay-as-you-go service. No subscription needed. You buy a month of unlimited service for $30 when you think you need it. The lack of yet another two-year commitment is a very consumer-friendly option.

C) Oh, by the way, if you choose to save $130 by buying the WiFi-only version of the iPad, you can get it with service from Verizon or Sprint/Clearwire. Huh? Yes, by buying a device such as the Novatel(NVTL) MiFi or the Sierra Wireless(SWIR) Overdrive 3G/4G cellular-to-WiFi converters, you can use your iPad (plus four other devices simultaneously) on Verizon or Sprint/Clearwire. You pay $60 per month, but amortized over as many as five devices you could argue that it's only $12 per month per device.

4. The iPad puts Apple on offense in the race to a completely new interface for much of our PC experience. For the last 15 or more years, the PC experience has not changed dramatically interface-wise.

One could certainly conceive that just like the PC market changed dramatically from 1984 to 1995, it is about to change yet again. In this context, it seems smart for Apple to take a chance with the iPad.

Is the iPad perfect? Of course not. Some complaints have to do with things such as the screen and the resulting battery life. A bright color screen yielding 10 hours just isn't the same product as a monochrome screen worth of ePaper yielding hundreds of hours. But that's a design choice, where Apple's choice to make a broad-based Internet-connected device seems like the obvious one. What's not a design choice as such is the lack of multitasking and Adobe Flash, but those things can be fixed.

The bottom line on the iPad: It will be a financial success for Apple, driving traffic to the Apple stores and putting the rest of the industry on the defensive.

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At the time of publication, Wahlman was long AAPL, SWIR, NVTL, DELL, GOOG, AMZN and RIMM. He was short HPQ and MSFT.

Anton Wahlman was a sell-side equity research analyst covering the communications technology industries from 1996 to 2008: UBS 1996-2002, Needham & Company 2002-2006, and ThinkEquity 2006-2008.

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