Thoughts on Apple’s iPad

Although most analysts predict that the iPad will not add much to Apple’s bottom line for the fiscal year, most see the device evolving over the years into an important earnings source for the company. Here are some reasons why demand might pick up for the iPad in the coming years.

Videogames

Neil Young of iPhone game maker Ngmoco predicts that the iPad will attract gamers and reduce the time they spend on consoles and PCs. It is expected that iPad games will sell for significantly less than traditional console and PC games, further increasing demand. In addition, iPad will most certainly gain a dominant market share in the handheld gaming device market.

E-readers

Amazon.com Kindle’s e-reader has dominated the e-book reader market, but that seems like it is about to change. Priced at $259, most analysts agree that Amazon must cut its price to around $149 to prevent consumers from paying up for the full-featured iPad. The one downside for Apple is that the iPad’s screen brightness might make it harder for some people to read versus the Kindle.

Textbooks

Here is where I think there is huge potential for the iPad. If the iPad, or similar devices, are popular enough, many colleges might adopt e-textbooks. E-textbooks would definitely defeat traditional textbooks in the features department as many would be expected to have interactive graphics, video, etc.

Video

The attractiveness of the iPad’ screen could lead people to turn to it as a video-viewing device. Netflix might launch a free iPad application allowing its subscribers to access thousands of movies and TV shows.

Netbooks

Although current netbooks are cheaper than the iPad and have more features (i.e. Adobe Flash), the keyboard-free touchscreen of the iPad might convince buyers to move away from netbooks and towards touchscreen devices.

Bernstein Reasearch hardware analysts Toni Sacconaghi predicts Apple will sell 5 million units in the first 12 months. Sacconaghi doesn’t see the iPad contributing much to the bottom line in the short-term, but sees it picking up long-term. He expects iPad to add less than 2%, or 15 cents, to Apple’s earnings for fiscal year.

As for me, I’ll be waiting on the sidelines to get my iPad. Without multi-tasking or a webcam, it makes little sense to make the plunge now.