- Posted by Leigh Drogen
- on January 27th, 2010
A few quick thoughts on the new $AAPL iPad. I won’t give a full review of what I think about the product, there are plenty of other people who can do that far better for you. I’m not really a tech geek, I just like to look at innovative products from a business and technology trend perspective.
First off, I can not understand why there is no camera included in the product. This really makes no sense to me. I had the idea that one of the most innovative aspects of this device was going to be video chat made mobile, I guess I was wrong. Maybe it will be in the second release, but how hard would it have been to include, I just don’t get it. Imagine being able to talk to anyone face to face like you do now over skype, except mobile, that’s a game changer, that makes the world smaller, that’s innovation.
As it is now, the device is just a larger, supped up iTouch. Yes, the other functionality is going to be awesome, I won’t go into them all, it’s really cool.
Now here’s the most amazing thing, and the aspect of this device you need to watch out for from an investing perspective. There’s no voice plan! There is 3G connectivity through AT&T, and the 20$ / month all you can eat no contract plan sounds awesome, but there’s no voice. Now I’m betting there is going to be a crap load of speculation as to why. Well here’s my take. I believe Apple is about to destroy the idea of having a voice plan. So far, they have not allowed full use of skype or any other voice application that would use the internet instead of a voice plan which you had to pay $T for. This is ending in my opinion. I think they are on the cusp of allowing one or many of those services to make calls through the 3G data plan. What does this mean for the telecom companies? Well, just think about it, if Apple allows data users to make calls over the data plan, the telecoms are screwed. Time is really running out on the days when they will be able to charge 60$ for a voice plan. This is the most interesting part of the device, no voice, and I believe they may have done it for a reason.
Here’s the problem, the network is going to completely crash soon. Frankly, I probably won’t buy an iPad just for the fact that it won’t work in New York City on the $T network. I already have major problems making a simple phone call let alone trying to make a data call. Something needs to give here, and I believe $AAPL may be cooking up a solution of its own. This device is only going to go as far as the network its on can take it, and god knows Steve Jobs doesn’t want that part of the equation to be out of his hands. If things stay the same, and you can make unlimited voice calls through a skype type application on this thing, $T is going down, quickly. I don’t know what the answer is, I need to give it more thought. There is a major war brewing between the edge developers of the internet and the core network providers as to who is going to pay for the expansion of the pipe that carries the data. Someone has to pay for the expansion, or there needs to be a partnership there.
These are interesting times, huge companies will grow and fall based on the outcome of the network build out and how the iPad offers voice. I’ll keep you updated as to my thoughts, sorry for rambling.
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Leigh Drogen is the founder and chief investment officer of Surfview Capital, LLC, a New York based investment management firm employing an intermediate term long/short momentum strategy. More »
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