Wednesday, January 27, 2010

UPDATE: Apple iPad Introduction by Steve Jobs

Steve Jobs Reveals New iPad Device
Apple chief executive surprised Apple watchers with the iPad's aggressive pricing. The entry-lev
Steve Jobs took the stage Wednesday to sell the world on one of his biggest gambles since returning to Apple Inc. nearly 15 years ago: a multimedia tablet-style computer called the iPad.

WSJ's personal technology columnist Walt Mossberg talks with Stacey Delo about Apple's new tablet device, the iPad.

The 9.7-inch touch-screen iPad, which will let users play games, check email, and read books, presents a major challenge to the media, publishing and wireless industries. For Mr. Jobs, it is an attempt to convince consumers they need yet another gadget—one between their mobile phones and laptop computers.

Before a crowded auditorium in San Francisco, Mr. Jobs acknowledged the company faced a high-bar. Many past efforts to sell tablets had flopped. But he argued there was room for a new category of devices, especially one that was "so much more intimate than a laptop and so much more capable than a smart phone.''

The basic model will cost $499, half of what some analysts had expected and about the same price as Kindle DX, Inc.'s large-screen version of its electronic-book reader. Higher-end iPad models with 3G wireless capacity will cost up to $829.

"We want to kick off 2010 by introducing a truly magical and revolutionary product today," Mr. Jobs told the crowd. He said the iPad will begin shipping in 60 days for U.S. buyers and be available overseas later this year.

The iPad is "a breakthrough for a start-up product," said Gene Munster, an analyst with Piper Jaffray. But he predicted it will take about a year—and a price cut—before it begins to appeal to a mass-market.

Apple's now-hot iPhone, similarly, took many months and a price cut to gain broad popularity, and its iPod took even longer to catch on. And although Mr. Jobs is known for his iconic products, not all Apple's new gadgets have been hits.

On Wednesday, Mr. Jobs unveiled a new online store that will sell digital books and said the iPad will provide wireless access to the music and videos sold on iTunes. But Mr. Jobs didn't announce new partnerships with Hollywood studios, television networks or magazine publishers, which Apple has been courting.

The iPad, which is half an inch thick and weighs 1.5 pounds, will come with Wi-Fi wireless connectivity, but consumers will have to pay extra for the kind of always-on Internet access found on the Kindle.

Apple stuck with AT&T Inc., the carrier of its iPhone, for the cellular service. Unlimited data transfers will cost $30 a month, but won't require a contract.

During a presentation that featured everything from a Bob Dylan song to a "Star Trek" clip, Mr. Jobs looked relaxed as he demonstrated some of the iPad's features from a leather chair on the stage, ostensibly to show how the device can be casually used in living rooms.

The 54-year old survivor of pancreatic cancer appeared as thin as he has before in his trademark black turtleneck and blue jeans, about nine months after receiving a liver transplant.

Mr. Jobs returned to work at Apple in late June and people familiar with the matter have said he has been devoting much of his time since then to the tablet, getting involved in even minor details.

Shares of Apple, which initially fell about 2% as Mr. Jobs began his presentation, rose $2.04, or 1%, to close Wednesday at $207.98. The shares have more than doubled in the past year.

The device can run applications designed for the iPhone and operates much like the smaller device, relying largely on finger gestures, though it includes an on-screen keyboard.

Unlike some rival handhelds, the iPad is designed to run just one application on the screen at time and doesn't allow multitasking.

It also lacks a built-in camera to take photos and video and the ability to play Flash-based content on Web sites.

Apple showed how documents, spreadsheets and presentations could take on a more multimedia look on the new device.

People familiar with Apple's thinking said that the company is still sifting through technology features that it has in the works to decide whether any of them might be ready before March to include in the first device.

The iPad is Apple's first major product since the iPhone three years ago. Sales of the iPhone and the iPod Touch (the same device without phone service) have reached more than 75 million units so far, transforming the market for portable connected devices.

With its latest product, Apple is also betting on traditional media as it expands its influence beyond music, video and mobile applications with a new store for electronic books called iBookstore. Apple's expanded focus on traditional media amounts to a further departure from rival Google Inc. which offers content to consumers largely free of charge.

Mr. Jobs also announced partnerships with five major book publishers including Penguin and HarperCollins, for e-books. Mr. Jobs indicated his intention to take over Amazon's e-book market, saying: "We're going to stand on its shoulders and go a bit further."

A spokesman for Amazon pointed out that the "Kindle is purpose-built for reading," and is more affordable at an entry-level price of $259. He also noted digital books downloaded through Kindle can be read on Apple's devices.

Apple also showed a demonstration by The New York Times about how the bigger screen could better capture the essence of an actual paper as well as a racing game by Electronic Arts Inc. to show how videogame playing is different on a bigger screen.

Part of the iPad's appeal will depend on new applications, such as magazines and games, that can be designed specifically for it.

Apple said it is making available a new application development kit right away, so developers can start building such applications.

"You've got more room for people's fingers," said Bart Decrem, chief executive of Tapulous, maker of popular music games for the iPhone.

Write to Yukari Iwatani Kane at

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