The iPad is coming, part II

In my last post, I talked about the hype surrounding the release of the iPad and the challenges to the iPad fulfilling its potential. As I said in that post, the Internet has come to mean free and unlimited access to information. The most popular websites—Facebook, YouTube, Flickr—are all free.

This, of course, runs counter to Apple’s business model. Apple has enjoyed success with iTunes, largely because songs are a buck, about the same price per song as a compact disc.

However, most digital magazine subscriptions on the iPad are a lot higher. (Some, like news from the BBC and NPR, are free.) The Wall Street Journal is $3.99 a week; Time and Popular Science are $4.99 per issue. The problem is that you can get much of the same (or similar) content for free online, often from those publications’ own websites. Moreover, the paper version of Popular Science is just $10 per year on and Time is $20.

So the question is: will the masses pay a steep price to purchase the iPad, and will they pay considerably more to receive content on the iPad, compared to what’s available elsewhere?

Maybe—sales already number in the millions after just a few months. But Apple and its competitors should look toward two other media for answers on what consumers will pay for, and what they won’t.

smart phone
Smartphones offer iPad-like functionality for far less

For example, the smart phone—a technology that runs in the $50 to $250 range—is a proven seller. More than 45 million Americans have smart phones. Whether it’s a Blackberry, an iPhone, Droid or other device, they’re all compact, portable, relatively affordable, and deliver the Internet for a relatively small monthly fee of around $100, give or take. The iPad will set users back nearly four times that much on the high end, and 10 times as much for the low-end models. And with Apple’s a-la-cart programming, users will receive only the content for which they have paid.

Speaking of a-la-cart programming, Apple and other emerging technology producers should take a cue from the much-maligned cable TV industry when it comes to offerings. The cable model is simple: one flat fee per month gets you unlimited access to a large variety of channels. Rather than nickel-and-dime consumers for each online publication, Apple and iPad competitors should strike deals with content providers and offer bulk packages for their users. Tiered subscriptions could provide access to premium content.

So while the iPad is a clever, cool device that does allow for an immersive experience, it has hurdles to overcome. Bring down the price to the point where the iPad becomes “throwaway” and add some sense and sanity to the pricing structure. When that happens, iPad-like devices truly can change the way we view media, as advertised.

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