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Apple tablet buzz mounts as Steve Jobs plans unveiling

27 January 2010
That Steve Jobs is poised to unveil a tablet computer today could shape up to be Silicon Valley's worst-kept secret. An Apple tablet has been speculated on for months, certainly well before Apple invited the press to San Francisco Wednesday to "Come see our latest creation."
If the swirling rumors indeed turn out to be true, a multimedia-rich Apple tablet computer could have the same mammoth effect on publishing and media as the iPod and iTunes had on digital music. What's more, the iPad, iSlate or whatever Apple's new device is called could breathe fire into a tablet market that's barely seen a spark until now.
READERS: What have you heard about Apple's Tablet? Want one?
TABLETS GALORE: Other gadgets being rolled out
For all the attention Apple (AAPL) is getting, it's not the only tech stalwart to have caught tablet fever. During a speech at the Consumer Electronics Show in Las Vegas earlier this month, Microsoft CEO Steve Ballmer showcased a touch-screen slate from Hewlett-Packard. Intel CEO Paul Otellini also demonstrated tablet technology during a speech at CES. And Dell has shown off a tablet prototype.
Still, by the end of this year, tablets of all types will have a less than 1% market share, with 3 million to 4 million units shipping, Endpoint Technologies analyst Roger Kay predicts. "But Apple could blow that forecast out of the water," he says.
Tech advances help explain the renewed interest in tablets. Low-voltage processors are powerful enough to run applications, but they also do a decent job of prolonging battery life. Color touch-screens have come of age. Prices have fallen.
Conjecture aside, few folks outside Apple's Cupertino, Calif., headquarters know precisely what an Apple tablet computer will look like. Apple is famously tight-lipped about what's in the hopper and wouldn't comment for this story.
But the device that tech analysts and others expect Jobs to reveal (though not start shipping just yet) is likely to be a thin, sexy slab with a multitouch screen anywhere from 7 to 11 inches. In other words, larger than an iPhone or iPod Touch but smaller than a typical notebook. (It's possible Apple will introduce more than one model.) The machine is likely to have a virtual keyboard that appears when you need it, as on an iPhone. It's equally likely you'll be able to connect a wireless physical keyboard for use at home or in the classroom.
An Apple tablet may well have a camera so that consumers can engage in video conversations through Apple's iChat software. You'll likely be able to read electronic books and periodicals, play games, watch video, send e-mail, surf the Web and tap into the iTunes App Store to fetch applications that may be optimized for the larger display.
It also figures to have 3G cellular connectivity to complement Wi-Fi, perhaps through AT&T, Verizon Wireless or even both. Neither would confirm the possibility, though Verizon spokesman Jeffrey Nelson says the carrier is ready for "whatever devices we are going to offer or have on our network."
Ted Cohen, managing partner at consulting firm Tag Strategic, believes an Apple tablet will offer music and movies via a rental subscription, thanks to Apple's recent acquisition of the Lala online streaming service. "It's time. They have all the pieces to offer a cutting-edge subscription service."
According to a Wall Street Journal report citing unnamed sources, Apple has held discussions with potential entertainment and publishing partners including The New York Times, Condé Nast, HarperCollins (News Corp.), CBS, Walt Disney and Electronic Arts. None would comment for this article. USA TODAY could not confirm the report.
Finally cracking the market?
Tablet pricing could be as high as $1,000 or so, though a smaller-screen model might command a few hundred dollars less. Some sort of discounted cellphone-like subsidy might also be possible with a wireless contract.
Price will be a sticky issue for some buyers. Seventy percent of the 500 people randomly surveyed by Retrevo, a consumer electronics shopping site, said they would not spend more than $700 for a tablet. And 44% indicated they would not buy a device if it required a monthly fee.
Apple wants to keep selling iPhones and MacBooks, so a tablet has to have its own reason for being, says analyst Michael Gartenberg of Interpret. "Existing tablet devices have either tried to displace laptops, and that didn't work, or displace the phone, and that didn't work. I would expect Apple to come up with something that stands on its own and complements the rest of the things they're doing."
Geoff Walker, of computer touch-screen supplier NextWindow, believes a tablet has to do more than let consumers watch movies, read books and surf the Web. "I'm not convinced a tablet without a keyboard provides what consumers want," he says. And "At $700 to $1,000, heck, that's the cost of a pretty darn good notebook. Does a tablet replace a pretty darn good notebook? I don't think so."
Slapping on an Apple logo doesn't guarantee a trip to the Promised Land for the tablet category. But Apple brings the kind of buzz, marketing prowess and technological wizardry that largely has been missing. "I think there's a real opportunity for Apple to do this right," Gartenberg says. "Are the odds against them? Absolutely, just by virtue that people have been trying these things for 15 years and no one has successfully cracked this market."
Apple's roots with the tablet form date at least to its ill-fated Newton, an early-1990s personal digital assistant pushed by then-CEO John Sculley. Jobs killed Newton when he returned to Apple later in the decade.
Rival Microsoft has been trumpeting tablets for a while, so far with little to show. With Microsoft-supported tablet PCs, you mostly use a digital pen or stylus to input text, though some "convertible" models also have traditional physical keyboards. A t the Comdex trade show in 2001, prototype tablet PCs were demonstrated by Acer, Compaq, Fujitsu and Toshiba. At the time, Bill Gates said, "I'm already using a tablet as my everyday computer. It's a PC that is virtually without limits — and within five years I predict it will be the most popular form of PC sold in America."
It didn't quite work out that way. Tablets have had modest success among niche businesses but have never captured the fancy of consumers. IDC analyst David Daoud projects unit sales of non-Apple slate and convertible tablet PCs will fall from 1.32 million in 2008 to 1.25 million this year.
Can Apple make it mainstream? "This is a game-changing device, the start of a big shift," predicts Piper Jaffray analyst Gene Munster. But Munster expects only 2 million Apple tablets will be sold the first year. By comparison, some 325 million computers will be shipped worldwide.
Kay thinks Apple can sell 20 million tablets eventually, a small number compared with the iPhone and iPod, "but great for computers." The original iMac sold 6 million units, he says.
Taking on e-readers
One area where an Apple tablet is expected to have a profound impact is the burgeoning electronic reader market currently dominated by Amazon's Kindle. New e-readers were all over CES. Barnes & Noble recently got into the game with the Nook; readers from Hearst, Samsung and others are coming. A device from Plastic Logic is due out in the spring (USA TODAY is a partner). But some consumers are already waiting to see what emerges from Apple before committing to another e-reader, even though they assume Apple's tablet will cost a lot more than the Kindle or Nook, both $259.
New York media strategist Ed Cunning recently was in a checkout line to buy an e-reader and laptop. But, he says, "Something told me to wait. I think I may be able to kill two birds with one stone (with Apple's new device)."
Rich as consumer anticipation may be for Apple's latest toy, it is unlikely to immediately affect sales of Kindle, Nook and other e-readers, analysts say. ChangeWave Research found just 18% of 3,314 consumers polled are "somewhat" or "very interested" in Apple's new product.
Forrester Research analyst James McQuivey says demand for Kindles was exhausted over the holidays and won't build up until later in the current quarter. "If there is an impact, it will come between the Apple announcement (today) and the tablet's release later in the year," he says.
'Good for the book business'
Amazon declined to comment. But it may have had Apple in mind when last week it unveiled a kit for developers to let them build apps for the Kindle.
"Any time a big, powerful company like Apple gets interested in reading, it's good for the book business," maintains Seth Gershel, a publishing consultant who once ran the audio books business at Simon & Schuster.
Steve Haber, president of Sony's digital reading division, agrees. An Apple reader "is going to help expand the entire digital reading market and accelerate the shift from analog to digital." Speaking as a potential rival, he says of Apple, "When it comes to digital reading, the device has to be cozy."
Textbook publishers are jazzed by Apple's potential. "To us, it is extremely exciting," says Rik Kranenburg, an executive at McGraw-Hill, a company that has been working with Apple. Tablets may help facilitate interaction among course groups and between professors and students. An interactive chemistry book could let students take advantage of color graphics, video "and the ability to go to the point in the lecture where the professor addresses the topic you're reading about."
Kranenburg guesses the overall tablet market may eventually split, with certain devices mainly suited for watching movies or chatting with friends, while others cater more to students.
Lenovo unveiled one of the coolest new products in Las Vegas, the $999 IdeaPad U1 "hybrid" due out this summer. It resembles an ordinary Windows 7 clamshell-style notebook. But you can lift out the display so that it functions as a stand-alone, Web-centric, touch-screen slate that runs off its own independent Qualcomm chip. In tablet mode, the IdeaPad is lighter and has longer battery life; you might schlep it on the road to read e-books, watch movies or catch up on Twitter and Facebook.
Google executive Andy Rubin won't speculate on "other people's unannounced products." But he says the Android mobile operating system could fit into the tablet space, as Google focuses on "cloud computing" applications in various areas, "including the segment between a cellphone and laptop."
Meanwhile, expectations for today's announcement are at a feverish pitch. Whatever Jobs unveils is likely to come with surprises. Tech pundit Tim Bajarin of Creative Strategies says you can count on one thing: "It'll be fun and interesting, regardless."
Source: Edward C. Baig, USA TODAY
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