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The Apple iPad is more than just a great tablet; it's the single most important computing device released in more than 25 years.
In fact, you'd have to go back to the introduction in 1984 of the Macintosh personal computer to find a machine as game-changing as this one.
Of course, back then, the Mac grabbed only a small share of the huge PC market. But what it did do was establish Apple Inc. (NASDAQ:AAPL) as the sector's clear technical leader. It also gave birth to desktop publishing.
This time around, however, Apple has turned the tables on its rivals in two ways...
- First, it came up with a breakthrough approach and the ideal screen size. At nearly 10 inches diagonal - very close to the size of a piece of paper - this format feels natural to most users.
- Second, it's a runaway success, boasting 70% of the market share.
That leaves tech investors like us with two choices: Learn what this all means, or get left in the dust.
You see, the PC industry is going into a long decline. It's already started. Ditto for newspapers, magazines, music distribution, and lots of other physical products that will get transformed into software.
So says Michael Saylor, author of the hot new book "The Mobile Wave: How Mobile Intelligence Will Change Everything." As I told you yesterday, I tracked Saylor down to talk about how mobile computing fit into the Era of Radical Change. (You can read the first of my three-part series here.)
His is hardly an academic view. See, Saylor also serves as the CEO of MicroStrategy Inc. (NASDAQ:MSTR), a leader in business intelligence.
He believes five billion people will use iPads or a comparable device within a decade. That's roughly 75% of the population of Earth. No doubt, he admitted to me, that's a bold prediction. He added this:
Saylor answered by sharing four key facts every investor needs to know about this market-dominating device.
Here they are...
Key iPad Fact No. 1: Apple Has "Won" the Market
The company can barely keep up with demand for its iPads. It has what amounts to a one-hour inventory. That is flat-out incredible.
Here's Saylor's take on it:
Key iPad Fact No. 2: For Amazon, Size Matters
Saylor considers the iPad an "enterprise" class tablet, because it has a 10-inch screen. At that size it works great as a media-rich mobile sales brochure people can use when meeting with clients. In fact, he and other CEOs have begun equipping their entire staffs with iPads.
Jeff Bezos should be so lucky...
The billionaire founder of Amazon.com Inc. (NASDAQ:AMZN) introduced the Kindle e-reader and the new Fire version - which competes with the iPad - with just seven-inch screens. That size just won't work for business users; it's too small. Says Saylor:
Key iPad Fact No. 3: Google Can't Catch Up
No doubt, Google Inc. (NASAQ:GOOG) dominates the search-engine sector. No one else comes close. This cash-rich firm invests heavily in other forms of cutting-edge high tech, like robot-driven cars, too.
But in the tablet market, Saylor explained, Google will never become more than an also-ran against Apple. He has great respect for Google co-founder Larry Page, but not even Page can compete with the iPad, and again, it has everything to do with the size of the screen.
Key iPad Fact No. 4: Microsoft Has Confused the Market
No doubt, Microsoft Corp. (NASDAQ:MSFT) remains the clear leader in the global PC software market. But as Saylor sees it, over the long haul, that is low-growth business - at best. Here's how he views Microsoft's tablet play.
Thus, Saylor believes Apple has already won the tablet wars. He advises investors to keep an eye not just on Apple but on all the firms in Apple's "ecosystem" - from wireless carriers to chip makers.
At the very least, use caution when going long on any companies that make PCs.
Because make no mistake...the future belongs to the iPad.
In Part Three tomorrow, I'll explain how digital money will go "bulletproof".
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About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.
A possible flaw in this rosy picture for iPad, et al is the prospect of a massive electromagnetic pulse set off by the sun or some lunatic government with an h-bomb detonated 7 miles high. In such an event, those dependent on internet and any other electronic communication will be instantly reverted to stone-age existence. Nothing electronic will work – no cars, no electricity generators, no computers, no iPads or Kindles, etc.
Incidentally, the prospect of such a EMT is by no means a "long shot" – especially the "lunatic government" scenario.
Someone, please – refute this with conviction.
The following comments on Microsoft are totally incorrect. The only thing we do not know is the price but that does not mean that MSFT does not know. They have to decide to initially sell at a loss to grab market shares. It is a misleading paragraph.
""Then they announce they don't know what chips it will run. They don't know what operating system it will run, and they're not sure whether or not it will be on a phone. And they don't know what it will cost. And they don't know when it will ship."
An interesting point of view but not very complete. First there are so many business functions that simply are not going to be easy to do without the keyboard. Andwhy do you think we developed larger screens, it wasn't initially to watch movies on. I have seen many people who have ipads switch back to their computers when they have something real to do. There are clearly functions that will be better on a pad and others that won't. Yes, the pad area is the growth area because it is more a consumer than business market, so that still leave MS with most of a huge market. The pc market may not grow as fast and may even shrink as comsumers who never needed pc's move to the pads but then isn't this the group that is putting down growth as the answer to all. I woudn't count Microsoft out in the pad world either, not yet anyway. And there will be something that replaces the pad someday to.
Robinson brings some interesting points about Apple i-pad's dominance. But there are other great pads on the market, and they are gaining on market shares. Comsumer Reports recently rated overall quality and utility the #1 spot to the Asus Transformer with Android op system, which I use. Apple got out front in this venue, and all the others are playing catch up. Let us see how many consumers migrate to the better products.
I think the author forgot about the Galaxy 10.1. it is an android device!
I know black berry has 1 foot in the grave , but I think once people see there new tab , which features camera , and phn , they may just get rollin again. buy rimm now , stocks are cheap.
Michael did not disclose whether he stands to benefit from articles that encourage investment in Apple or the iPad ecosystem.
For an alternative analysis that suggests the iPad is losing market share, see http://www.bgr.com/2012/08/01/ipad-market-share-q2-2012-android-tablets/
Think of the iPad dominance in the same way IBM held dominance in the early DOS PC market 808x-80286 era. No one really came close to doing it right for a while; then Compaq entered the fray, but it was still an "IBM Compatible PC" deal. Eventually though, commodity hardware is available to all makers, and more folks get it right. Android and Windows make perfectly fine tablet OS's; and its only a matter of time before Apple prices itself into the same market realm that was held by IBM "PC/AT"; fine hardware, awesome all over, and simply no longer a good buy when compared with slightly inferior products selling at 25% of the cost. Still.. IBM had a good run with that product line, and Apple should too with their tablet; the long term future though? Not a chance.
Apple's a honey badger hahaha