AAPL) is rumored to be downsizing the iPhone screen size for its Verizon ( VZ) release in mid 2010). My laptop has a good-sized screen, but the clunky keyboard and lack of mobile Internet access make it hard to use as a portable newspaper replacement. Apple's coming Tablet will fill a niche. Users will be able to take it on the subway, take it in the car, take it on the back porch, take it to breakfast, take it to the pool, take it wherever you would normally go to read a magazine or newspaper. In an interview with Fox Business News, Rupert Murdoch went so far as to say that the future of the newspaper business is in electronic subscriptions on products like an Apple Tablet. (Editor's note: Various news reports this morning said that Apple will delay the rollout of the Tablet until the second half of 2010.) The Google ( GOOG) era of getting everything for free appears likely to end as well -- as it should. Good publications deserve to make profits on their work. I'm sure we'll see iTunes and the App Store expand to a selective subscription model that caters to the needs of readers. Leave it to Steve Jobs to make this work.
Digital content has been available for years, but the right vehicle to consume that content has been lacking. We still cut down trees and hand-deliver newspapers to people's homes, for goodness sake. That worked in 1900, but 2009? It seems a little archaic. The Tablet is about to change society. My take is that within 24 months of a Tablet release, both Borders ( BGP) and Barnes & Noble ( BKS) will be bankrupt. Print newspapers will become a relic of the past, and campus bookstores will be obsolete. Will the Tablet have a substantial impact on Apple's core business? The iTouch Tablet launch is primed to be the most significant in the history of Apple. The iPod was an unknown at its release, and the iPhone was met with skepticism, as nobody really believed that Apple could become a phone manufacturer. The Tablet will be different. This Tablet will be the first product designed specifically to utilize the apps from the App Store, and as such will become the flagship Apple product. To a person, Apple executives would tell you they are shocked with the App Store success on the iPhone. The unspoken secret about the iPhone is that it wasn't designed to become the ultimate App Store device. The screen is too small. The order of operations for the iPhone are phone first, iPod second, apps third, and Internet browser fourth. Now Apple gets to design its first product since the App Store was launched.
We are witnessing a transition in the way the Internet is used. Mobile content requires a tailor-made user experience that is not efficiently delivered by the traditional Web site model. Although we have grown accustomed to navigating the Web by browsing Web sites on our computers, consumers are showing an affinity for the app model. Mobile Apps are designed for usability, and the 2 billion downloads thus far from Apple's App Store clearly demonstrate a user experience in high demand. The coming Tablet will be principally designed to take advantage of App Store gaming, books, news, entertainment and social networking as well as surfing the Internet. Until now, a truly portable Internet device hasn't been possible because of the scarce network availability. Apple's effort at developing the Newton back in 1989 was unrealistic because the infrastructure wasn't ready to support it. Verizon's new Mi-Fi technology appears to be changing the landscape, as it enables a Wi-Fi connection anytime and anywhere. It's looking like the Tablet could mark the beginning of a relationship between Verizon and Apple. The anytime and anywhere connection will allow this product to serve as an up- to-the-moment e-reader. Imagine a college student not having to lug around $600 worth of textbooks each semester. Imagine not having to load up on magazines at the airport. The digitization of education and media has arrived. This is the first device that caters to digital readers on the go. Amazon's ( AMZN) black-and-white Kindle was such a poor attempt that it's not even worth analyzing. Same goes for the netbook fad.
The definition of what a book is will change. No longer will consumers settle for words written on a page. The Tablet will allow books to contain animation, video, hyperlinks, voice, music, author comments, reader comments, instructor comments and more. Reading a book will provide more opportunities for stimulation as well as analyzation than ever before. Perhaps books and movies will be released simultaneously as a single offering. Or a band will sign on to do the music for a hit book. Prepare your senses for overload. In a survey of 3,100 people, more than a fifth said they are interested in Apple's long-rumored tablet device, according to a new note to investors from RBC Capital Markets. That's well more than the 9% that said they were interested in the original iPhone in April 2007. The survey assumed that the product would be priced between $500 and $700. Now see: Apple's Decade: A Matter of Trust >>>