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Select Smartphones Will Complement Apple’s iPad, Not Compete

4/19/2010 02:06:00 PM

Some analysts have questioned whether the Apple iPad has a niche in a market where smartphones are commonplace and cellular-equipped netbooks are gaining market share.

I think I’ve found one, and it could reduce demand for 3G-equipped iPads that will be delivered to U.S. consumers who pre-ordered on Friday, April 30, and will be available for sale in Apple retail stores that day at 5:00 p.m.

My take is that Wi-Fi-equipped iPads would be a natural complement to smartphones equipped with a built-in Wi-Fi hot spot. Such phones include the Palm Pre Plus and Palm Pixi Plus from Verizon Wireless and the soon-to-launch 3G/4G HTC-made Evo, due sometime in the summer from Sprint. More hot-spot phones, I’m sure, are in the works.

Wi-Fi-equipped iPads would also complement new smartphones that “tether” wirelessly to a single Wi-Fi device at a time. One of the first such phones is Samsung’s planned Galaxy S Android smartphone, also due sometime this summer. Again, I’m sure more are on the way.

Using a smartphone to connect a Wi-Fi-enabled iPad to the Internet eliminates the need to shell out for a higher-priced iPad with embedded 3G. The price premium is $130 for 16GB, 32GB and 64GB 3G models compared to their Wi-Fi-only counterparts.

Such a combo also eliminates the need to pay for a second wireless subscription (cellphone and iPad), and it gives consumers the opportunity to use an iPad on a wider choice of cellular networks, not just on AT&T.

I see consumers carrying around and using a smaller, more convenient smartphone during most of the day to make calls and access email. When the need arises, consumers could carry their larger, less-convenient iPad with them along with their smartphone, or they could choose to whip it out of a briefcase or knapsack when it makes sense.

On those occasions, if Wi-Fi isn’t available, consumers could use the iPad to download music, movies and e-books, or view longer emails and Web sites on a more eye-friendly screen.

One place where it makes sense is in a car, train or bus, where an iPad’s user interface and large 9.7-inch screen make it easy to email and browse the Web, as I had the occasion to do during a recent vacation. In my case, I linked my Wi-Fi-equipped iPad to Novatel’s pocket-size battery-operated portable MyFi hot spot. The combination worked flawlessly, though in my case, I had to pay for a separate cellular subscription.

On other occasions, consumers would likely use a Wi-Fi-equipped iPad at home to check email, access social-network sites, play downloaded games or watch videos when other screens are in use.

What’s your take on the sales potential of iPads, whether equipped with 3G or not?

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