Two thirds of people who are thinking of buying an iPad in the next 12 months are expecting to pay less than the current lowest retail price, according to the latest research from our Tablet and Touchscreen Strategies service. 66% say they will pay less than $500 or €500, and half of those say they want to pay less than $300 or €300. We surveyed nearly 5000 consumers across the US and 4 major European markets. These findings won't concern Apple too much as there is enough momentum from early adopters to support growing iPad sales for the next few months. But they should serve as a clear warning that today's price points are unsustainable in the longer term. Already we are seeing a proliferation of (mostly Android-based) tablets arriving on retailers' shelves, often at iPad-undercutting prices. Staples is offering a 10" Viewsonic, Android 2.2 device at $400. I am awaiting delivery of a £150 7" Android 2.2 tablet from UK electronics specialist retailer Maplin. Clearly these devices will not match Apple in every respect; many observers doubt whether the latest versions of Google's OS are up to the job. But then the question is what "job" tablets are expected to carry out. iPad behaviour so far has been truly multifunctional, with a mix of games, browsing, video, communications, and the huge variety of apps which are impossible to categorise. I overheard one potential tablet buyer in Staples inquiring (of the Viewsonic device) whether it was good for reading books, and specifically whether it could do "things like Kindle". Unfortunately she happened to address the question'to a sales assistant who claimed to be "still training" on these devices and so couldn't commit to an answer. But the fact that customers are inquiring about specific capabilities suggests that all-round superiority may not necessarily be a requirement for tablet market entrants hoping to eat into Apple's dominant market position. That's not to say that device implementations shouldn't pass the bare minimum of usability requirements. There are still too many early Android devices floating around which really are not fit for purpose, even if they are practically being given away. Consumers want to pay $300 or $400 but they expect something that does at least a few things reasonably well. The sooner Android matures and its partners introduce devices to undercut the iPad, the better for the tablet market as a whole. Client Reading: Apple's iPad: Users, Buying Intentions and Price Expectations

It’s no surprise that a majority of early iPad buyers had already bought into the Apple ecosystem, but the fact that fully 90% of people who say they will buy an iPad during the next 12 months already own an Apple device is perhaps surprising. It might have been reasonable to assume that the novelty of the tablet form factor would open up a whole new wave of potential customers attracted by its innovative design, regardless of how familiar they were with the benefits of Apple’s user interface and design. It seems, however, that in the early days at least demand for the iPad will be met almost entirely by existing Apple owners. Our survey of 2000 US consumers also suggests that a third or more of existing iPhone and Macbook owners have already gained access to an iPad (at least they say they have used one at home). And nearly a half of the early iPad adopters say they are somewhat or very likely to buy another iPad during the coming year – an indication of strong customer satisfaction if ever there was one. So how should Apple respond to this news? On the one hand the company should relax in the knowledge that so many of its core and loyal customers are saving up to buy the company’s latest device. On the other hand, there may be just the slightest concern that the iPad has so far failed to win new hearts and minds amongst the half of US homes which do not already own at least one Apple product. That may change as the tablet category becomes more widely recognised. New entrants will shortly be flooding the market with iPad alternatives which will help raise general awareness of this new category. As Apple struggles to meet demand from its existing customers, the opportunity is there for competitors to target the remaining market segments with iPad alternatives. Client Reading: Apple's iPad: Identifying Early Adopters and Intentions to Buy Meet Our Analysts: 3DTV Analyst Forum at IBC 2010

Apple cynics seem to have taken the initiative following the announcement of Apple’s iPad internet tablet. I tend to shy away from anything as hyped as this product has been. Surely the most hyped Apple device ever... And for that reason alone I am feeling underwhelmed. Is the iPad really what this was all building up to? Let's think about the applications: Books - ok, I get this. if you want e-books this seems like a reasonable way to carry and read them. A nice way to read newspapers as well – I’m not sure the publishers will make money from it though. Web browsing and applications - I suppose the brower must work well. This is definitely the primary set of apps in my view. Consumers need an easy and fast way to get to websites quickly when they’re at home and don’t want to boot up the laptop. Music - ok, but who would rather listen to their music through a 1.5 pound portable device with (presumably) tinny speakers rather than either a) a small iPhone/Pod plus headphones, or b) plus docking device? Photos - yes of course – iPad could be a very nice digital photo frame. Games - could eventually become a killer app but control and input functions will need to be adapted to a larger screen device and iPhone app developers need to get to work to match the screen's HD resolution. Productivity applications - I'm struggling here. is this really how the iPad is going to get used? The virtual keyboard may be good, although early reports are not promising. But think about how are people going to hold or rest this device: sitting down in a chair - it would have to rest on the flat table, so you are leaning over it to use it properly. Sitting in an armchair - so it's on your lap, but again you have trouble positioning the screen at the right angle; or standing, so you hold it resting in one arm and only have one arm free to touch the screen. Or you use a stand and add-on keyboard, and it becomes... a laptop! OK, maybe the iPad could be used occasionally for productivity applications, but I just don't see this device as a breakthrough for work-based devices. and finally... Video. Video playback is reported as stunning - I can believe this. But where are the extra video content applications or TV deals? The specialised video apps like TV-transfer? No HDMI for TV connection? Apple seems to be struggling more than ever to break into the home video market in a big way. And no multi-tasking… this is crazy. I can't play music while I surf?! Form factor: maybe I was expecting too much from Apple, but really the iPad is hardly a revelation. Have they done what we expected? ie take all previous tablet-type implementations, improved on them and added innovative style and usability and content integration to create a unique package? I don't see this from what I've read and seen. And it's too heavy to be held in one hand, much heavier than some e-readers. Wireless: So the key question - how often would this device be used in truly mobile situations, and of those situations, how often would a user need to have cellular data service? The cellular service can be bought ad hoc - and I think it will be primarily. Not much new recurring revenue for carriers there then... The iPad is surely primarily a “free data” wifi device. It doesn’t need always-on connectivity for messages and voice - I'm always going to carry a phone for those. I can get online for websites and apps via hotspots when needed, and primarily use my home broadband to load it up with content. Having said all this, of course the lower than expected price points mean they will sell millions to Apple fans who won't blink at spending another $500 on the latest Jobs gizmo. (And did anyone at Apple really not investigate the unfortunate connotations of the device name for the female market? - one wonders if Jobs has really lost his touch.) Client Reading: Consumer Imperatives for Digital TV Media Browsers