The iPad, Your Newest Workplace Productivity Enhancer

Apple (AAPL) has largely pitched the iPad as an ideal way to consume media in all its many forms. Books, games, movies, magazines—step right up, folks, we've got it all for you in one magical device!

For the iPad to be truly revolutionary—Steve Jobs' word—it'll have to do a lot more than be a better e-book reader. The real promise of the device is that it has a chance to redefine what we think of as personal computing. And that has implications not just for Apple's own Macintosh business but for Microsoft's (MSFT), Google's (GOOG), and just about everyone else's.

For business users and others looking for a new productivity tool, the pound-and-a-half iPad offers a marriage of the always-connected ultra-portability of a wireless phone with the power and flexibility of a laptop or even a desktop PC. "I think this is the new Mac, I really do," says Marc Benioff, chairman and chief executive officer of (CRM). "People aren't going to want Macs anymore. I think people won't want laptops anymore once they see what's really possible on great tablets."

It's safe to say no one at Apple, least of all Jobs, is eager to see the demise of its $999-and-up line of Mac laptops and desktops. (Apple declined to comment for this story.) But there are plenty of potential business customers who seem as ready to shift platforms as Benioff. More than half the people surveyed recently by Zogby International said they would use a tablet device such as the iPad for working outside the office, according to software maker Sybase (SY), which commissioned the poll. "Clearly, the iPad has a role to play in the business market," says Charlie Wolf, a Needham & Co. analyst who has a buy rating on Apple. "The demand appears to be far more diverse than I originally expected."

At $499 for the base model with Wi-Fi and Bluetooth, the iPad is in the same price ballpark as netbooks, the underpowered miniature laptops that run Microsoft Windows. True, the iPad has much less local storage—from 16 to 64 gigabytes of solid-state memory depending on the model, vs. the 160-gigabyte hard drive found on your typical netbook. What the iPad lacks in storage it tries to make up for with connectivity, which, for mobile business users, suggests the need for 3G service. That adds $130 to the cost of the unit, plus $15 or $30 a month for the data plans being offered by AT&T (T).

iPhone vs. Android II?

Microsoft and the makers of Windows PCs aren't the only ones who have to wonder what the iPad may mean for their market. Google, too, has to figure out the potential impact on its Chrome operating system. Netbook-like devices using Chrome to connect to Google software and services over the Internet should start appearing in significant numbers this year, and comparisons will be inevitable. We may be in for a repeat of the iPhone vs. Android struggle that's playing out in the wireless-phone market right now, with Apple pitting its polish and vast selection of third-party apps against Google's willingness to give its software away free to all comers. ("A healthy competitive ecosystem is good for the industry," says Google spokeswoman Carolyn Penner.)

While the iPad runs most of the 150,000 applications already available for the iPhone and iPod Touch, its larger, longer-term business potential is visible in three sort-of-new apps that Apple is premiering along with it. These are rewritten versions of the Mac's iWork office software suite: Pages, a word processor; Numbers, a spreadsheet; and Keynote presentation software. The Mac version of iWork sells for $79, or $49 with a new machine; you'll be able to buy each app separately for $9.99 on the iPad.

Pricey Remedies

The three have been reengineered to take advantage of the iPad's touchscreen interface, though that may not be the way many businesspeople choose to use them. Onscreen typing in Pages, for instance, can be problematic because the shape and materials of the iPad's case make it prone to sliding around on a smooth surface. It's a lot easier to use the iPad when it's on your knees than when it's on a tabletop.

There will be remedies for such issues, but they'll add to the price. At the iPad launch event, Jobs showed off a new combination keyboard/docking station that holds the iPad at a good angle for typing. That's an additional $69, and it isn't shipping for another month. Bluetooth keyboards will work with the iPad, too; the question is whether people who spent up to $829 on a piece of sleek, modernist design will want to lug them around.

On the Mac, iWork competes with Microsoft Office. On the iPad, it at least initially faces little direct competition. Microsoft for its part hasn't announced plans to create a version of Office for the iPad. "It's something we're looking at," says Kristen Woody, a spokeswoman for Microsoft. Still, there will be ways for salarymen and -women to get their Excel spreadsheets and Word documents. Citrix Systems (CTXS) said that on Apr. 3—iPad Launch Day—it would unveil a version of its virtualization software that lets owners remotely access the same screen they see on their office PC. "I think this device will be the ultimate business tool" for CEOs, salesmen, and other mobile workers, says Citrix CEO Mark B. Templeton. He expects use of Citrix's app to exceed the 400,000 downloads of a version for the iPhone that was announced last May. "This will have a bigger impact on our business than the iPhone," says Templeton.

More business-oriented software is on the way. IBM (IBM) plans to unveil iPad-compatible versions of its Lotus applications as well as various software collaboration tools (think Facebook for the Dilbert crowd). Offerings from small fry such as LogMeIn should also be available for those who need to create graphs or tap into files at the office. Needham's Wolf says health-care professionals will probably be among the biggest iPad purchasers.

The device's eventual impact as a business workhorse may hinge on whether it turns out to be more of an "in addition to" rather than an "in lieu of" proposition—the gadget you grab for a quick check of e-mail or a glance at the Web, while reserving the netbook, or MacBook for that matter, for more demanding uses. "It's not clear to me that it will be anyone's primary device," says Alistair Rennie, general manager for IBM's Lotus unit. "I think it's going to be an 'and' device, not an 'or' device." While he doesn't see the iPad replacing his iPhone, BlackBerry (RIMM), or laptop, he thinks its role will expand from the personal to business. "Expecting the things you use at home on the weekend to work in the office is now an unstoppable trend," he says.

However many working stiffs find themselves using iPads for their jobs, in the days and weeks after launch, books and movies and games will determine how much of a splash the iPad makes. Book publishers see Apple as a way to reclaim the pricing power they've lost to (AMZN)—at least until their fear of Apple catches up to the level of, say, their iTunes-loathing music industry brethren. Newspapers and magazines are being given an opportunity to reinvigorate their dying business models.

It's worth remembering that it took a while for Apple's most recent game-changing devices to find their niches. The iPod, launched in 2001, didn't graduate from a nice music player to a cultural phenomenon until the arrival of the iTunes Music Store in 2003. The iPhone was an immediate hit when it went on sale in 2007, but its full potential wasn't unlocked until the following year, when Apple allowed developers to write apps that would run natively under its operating system.

Maybe the iPad really will just turn out to be a cool way to read The Girl with the Dragon Tattoo, watch The Hurt Locker, and play games like Need for Speed. There's a fair chance it will turn out to be much, much more.

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