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On smartphones, Apple was late to the market, but if there is another vendor doing a better job of currently defining what a smartphone is, I don’t know who they are. With smartbooks, a new class of product based on smartphone technology that looks like a netbook computer, the market hasn’t even really launched, and already Apple appears to be moving to define it.

Word is they are rushing to try to have a product into the market in the fourth quarter. Were this anyone else, I’d say they had a snowball’s chance in hell of making it, but this is Apple, which likely has a patent on hell snowballs, so let’s chat about the Apple iPad this week.

iPod Sales Slowing

In what was a stellar quarter last quarter from Apple, the one really troubling mark was that iPod sales were slowing. Now, part of this was Apple drawing down inventories in advance of what will likely be a broad product refresh in August or early September, but I think it reflects on the fact that people are focusing more and more on smartphones, and not as excited about MP3 players as they once were. This suggests that Apple needs to move to the next big thing after the iPod, and while they are partially hedging this decline with the iPhone, it will probably be a long time (if ever) before iPhones will ever replace iPods.

Apple needs something exciting this year, and what better than something new and very different.

Apple iPadNewton + Tablet Done Right?

Steve Jobs both panned the idea of a Newton and a tablet PC, and strangely enough, the iPhone, iPod Touch and now this planned iPad are all combinations of both concepts. The iPad is likely the closest to what the Newton was evolving into given its size and capabilities, and the rumored design is identical to a tablet PC, albeit a small one.

If this were anybody else, I’d figure the chances that this will be successful to be slim or none, but Apple’s iPod Touch and iPhone have a user interface that will at least scale to 10 inches (the rumored screen size of this new device), and should work just fine.

Content is Key: Overcoming The Apple TV Problem

The problem for Apple, much like it was for the iPod, which it got done, and Apple TV, which it didn’t, is getting access to the media folks want to watch and play with on the device. It will be about the size of a Kindle DX, but it will need a decent book library if it is going to be used in that fashion. Luckily, there is a Kindle reader already for the iPhone and iPod Touch, but even Amazon doesn’t have perfect access (for instance, the Harry Potter books aren’t available on a Kindle). And Apple has never wanted anyone else to own the critical services on any of their devices in the first place.

Apple TV

Apple TV

This would be a great portable movie and TV viewer as well, but the lack of great content is what has plagued the AppleTV and kept it from joining the iPod, iPhone, and iMac on stage as a truly innovative product. Without decent video content, this just won’t scale to the kind of audience that the iPod or even the iPhone will enjoy. This is probably the most troubling aspect for Apple, because it didn’t really pull this off for Apple TV, and this may suggest the company can’t actually get it done this time either.

Price: Purchase and Wireless

Price will be important too, and it is hard to believe that many of these things will sell at the rumored $800 price. Smartbooks are actually expected to price out below $300 for the most part, and even if Apple were to go for a massive margin, you would think it could bring one out for under $600, if not $500, and hit a price that more would find compelling while still at the high end of the segment. With folks screaming about a sub-$500 Kindle, an $800 device would be difficult to move.

One final problem to work though is wireless access. The Kindle’s bundled HSDPA access from Sprint is wonderful, but it adds several hundred dollars to the price of the device, and putting the iPad on a data plan from a carrier like AT&T would potentially allow an iPhone-like sub-$300 price point. But it would also add a $50 or higher data plan.

These expensive data plans remain problematic, but Wi-Fi isn’t prevalent enough, WiMax isn’t widespread enough, and LTE hasn’t been rolled out yet, which will make the connectivity solution a real problem to solve.

Wrapping Up

If the iPod was a difficulty level of six, and the iPhone was eight, then the iPad will be something like 10 on a scale of one to 10. This will be one of the most difficult products Apple has ever tried to bring to market. Any other company would probably fail, but Apple isn’t any other company. Even if it fails, Apple will have created a potentially unique and advanced offering which could easily blaze the trail for more successful products to follow. I wouldn’t bet on Apple to fail, though. It does that very seldom, and given this may be Steve Jobs’ swan song product, there likely will be more emphasis on getting it right than on any product that came before it.

Given that we tend to remember either the first thing someone does or the last (it’s called primacy or recency) and we think of Steve Jobs now more as the father of the iPhone than the father of the Mac, there is a good chance he will be remembered for this iPad. For his sake, (and for the sake of his employees, given he doesn’t have a sense of humor on this stuff) this had better be a home run.

We’ll see. One thing is for sure: It will be incredibly exciting and I’ll bet Steve, if he can, will actually present this one. You see, this thing could actually become an eBook, smartphone, and netbook killer, and if it did, what a swan song for Steve it would be.