Publishers Still Trying To Unlock iPad's Promise - MediaPost Publications

The iPad continues to frustrate magazine publishers who counted on the Apple tablet as a digital lifeline for their ailing traditional businesses. A key sticking point has been Apple's reluctance to allow publishers like Hearst and Conde Nast charge for subscriptions for iPad editions of their titles, as they do offline.

  A New York Times story today highlights that publishers feel having to charge on an individual basis (typically at the same cost as a print copy) is holding back their progress in attracting readers to the iPad. Only a select few publications, such as The Economist and News Corp.'s soon-to-launch iPad-only newspaper, The Daily, are able to sell their apps on a subscription basis.

 Underscoring the unwillingness to plunk down $5 for a magazine issue in the App Store, a new study by research firm Knowledge Networks appearing in Ad Age found 86% of iPad owners said they would be willing to accept ads to access free content such as TV shows and magazine or newspaper articles. Only 13% said they were willing to pay any fee for iPad content, and only an extra $2.60 on average.

 The findings jibe with those from a Nielsen survey last fall indicating that nearly 60% of users across the iPad, iPhone and all other connected devices said they were "OK with advertising if it means I can access content for free."

 Further, 39% of iPad magazine readers in the Nielsen study said the ads they see are "new and interesting" (compared to 19% of all connected device owners), while 46% say they like ads with interactive features (compared to 27% of all connected device owners). In these kind of surveys, online users generally prefer free (ad-supported) content to having to pay, and ad-free content to having to see advertising. Wikipedia is nirvana in this regard, but most large sites and costly-to-build apps aren't supported by donations.

 Publishers, naturally, would like to generate revenue from both advertising and paid content via the iPad as they do offline. But not being able to charge annual subscriptions on the Apple tablet as they do in print interferes with their ability to calibrate the pricing and combination of ad-supported and paid material within magazine apps.

 That's why publishers are looking beyond the iPad to competing Android devices and other tablets coming on the market this year for more flexibility in setting terms. The increased competition could also put more pressure on Apple to support app subscriptions more widely. One potential bright spot in the Knowledge Networks study is that 14% of iPad users are willing to pay for a special iPad edition of a magazine they already receive in print.

 That means there's extra money to be made from packaging or repackaging narrowly tailored content via apps with a portion of existing subscribers. Whether that would be worth the cost of creating and distributing the app is another question. But given the experimentation going on among publishers in the digital realm, upselling to an app is an option worth exploring.

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Anyone Still Want to Contend That the iPad Isn’t a Creative Tool?

"The iPad is for consuming content, not creating it." iPad skeptics have been repeating that mantra for months now. It's become clear that the rap is a snippy, simple-minded exaggeration of two more specific facts about Apple's tablet:

After eight months on the market, it hasn't yet matched all the creativity apps available for Macs and Windows (two platforms that have been around for more than a quarter of a century).Most writers aren't going to be crazy about cranking out massive quantities of prose on its on-screen keyboard. (Even that is subject to debate: Macworld Editorial Director Jason Snell wrote this article entirely on an iPad, and it recently won an Azbee award.)

But while it's true that the iPad can't replace a Mac or Windows PC for every creative task, the evidence is piling up mighty fast that it is an exciting creative tool. Yesterday night, I dropped in on a San Francisco art show called Future/Canvas, and I can't imagine any rational human being attending the event and continuing to maintain that the iPad is only for passive, sheeplike intake of content.

(Sorry for the quality of the photos that follow -- I snapped them with an iPhone 3GS. Sadly, it's a mediocre creative tool, at least as far as its photographic capabilities go.)

As far as I know, Future/Canvas was the first multiple-artist show that consisted entirely of works created with iPads. Much of the art on display was in the form of prints of digital paintings and drawings created with apps such as Brushes and SketchBook Pro...

future-lady

future-beard

future-pants

But iPad art was being created on the premises, too...

future-painting

...and attendees got the opportunity to interact with iPad art apps such as TypeDrawing and Magic Window.

future-arttree

The exhibit's music was courtesy of Rana Sobhany, a DJ who does her thing with...well, look below.

future-dj

Among the notables who attended: Steve Wozniak (who needs no introduction) and Yiying Lu (creator of Twitter's Failwhale and cofounder of Walls360), seen in this photo by Dale Larson.

Steve Wozniak and Yiying Lu

I chatted with Josh Michaels, creator of Magic Window and one of Future/Canvas's organizers. I asked him if he planned to mount more iPad-art shows, and he paused and mulled it over before answering: He wasn't sure, because it was an expensive proposition. I'll bet this isn't the last event of this sort, though. And I wouldn't be the least bit surprised if art created on iPads becomes so common that it stopped being noteworthy. I mean, when did you last hear anyone making a fuss over art simply because it was created on a Mac or a Windows PC?

For more smart takes on technology, visit Technologizer.com. Story copyright © 2010, Technologizer. All rights reserved.

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iPad Still a Small Portion of Apple Value

NEW YORK (TheStreet) -- According to a recent survey, Apple's (AAPL) iPad is expected to be a seasonal favorite during the holidays with 9% of holiday shoppers planning to buy an iPad in the next 90 days.

Apple competes with players like HP(HPQ), Dell(DELL), LG Electronics, Research in Motion(RIMM), Samsung Electronics, Toshiba, and Cisco(CSCO) that all have or plan to launch tablets, as well as Amazon(AMZN) that sells the well-known Kindle e-reader.

Despite the large amount of attention the iPad receives, we estimate that the iPad constitutes only 7% of Apple's intrinsic stock value and therefore any significant jump in sales would have a limited independent impact on Apple's stock. Further, we anticipate that declining iPad gross profit margins in coming years could pose a headwind to the iPad unit's profitability and restrict additional upside to Apple's intrinsic value.

Our price estimate for AAPL still remains roughly 32% above market value, at $418.

We estimate that Apple could sell around 12.5 million iPads for 2010, having already sold around 7.5 million iPads through the end of September 2010. According to Gartner, a market research firm, tablets market sales could triple to around 55 million by 2011, well ahead of our 20 million estimate.

Although holiday season sales could surprise, we still note a price sensitivity for Apple stock of less than 1% to a 10% change in 2013 iPad unit sales.

Another headwind to iPad profitability stems from declining profit margins. We estimate Apple's average iPad price to be $640 in 2010, a notable premium compared to the Amazon's Kindle priced at $189 and netbooks which typically cost below $400. If Apple cuts iPad prices aggressively in the future to remain competitive with other tablet/netbook/e-reader manufacturers, profit margins will be negatively affected.

We estimate Apple's iPad profit margin will be around 30% for 2010 and anticipate a gradual decline in the years ahead limiting the company's profitability from any substantial pickup in iPad sales. In another article, we wrote how competitors with smaller tablets, added features and the popular multi-media player Adobe Flash -- which the iPad does not support -- might add competitive pressures that could weigh on margins. (See iPad's Challenge for Next Year.)

While we are optimistic on Apple overall, the benefit to its stock price from the iPad could be limited for the time being.

Our complete analysis for Apple's stock is here.

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iPad Still Going Strong

The iPad is a computer produced by Apple Inc. It was launched in April 2010, and went on to become an instant hit. 3 million devices were sold in less than 3 months since its release. iPad is different from a PC or even a laptop because it comes in a tablet form and weighs 700gms. It uses the same operating system that other Apple products like iPhone and iPod use.

The iPad depends on the Wi-fi technology to surf the net or download data or install new software. There is also a 3-G model available now. iPad comes loaded with only Apple software and its settings need to be manually modified before it can run other software on its system. Apple Inc. has promoted it as a functional and portable device to store books, pictures, music and other audio-visual data. iPad has been launched with three storage options – 16 GB, 32 GB and a massive 64 GB.

One of the more surprising positive effects of the iPad has been on the educational and social front for children.  Most of the book applications on the device are beneficial for them. Especially Autistic children are predicted to be greatly helped by the iPad owing to its multi-touch display.

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