Programming Windows: iPad (Premium)

On Wednesday, January 27, 2010, Apple CEO Steve Jobs unveiled the iPad, realizing his years-long vision of leapfrogging Microsoft’s Tablet PC. In doing so, he created a new category of devices that could sit somewhere between a smartphone and a laptop. And, as importantly, he positioned Apple as a mobile devices company since, by that point, its three main products—iPhones, iPads, and Mac laptops—were all mobile devices. “It turns out that, by revenue, Apple is the largest mobile devices company in the world,” he noted of the shift.

The iPad was an open secret by the time Jobs announced the product, but that had the odd effect of amping up the excitement, not diminishing it. But Steve Jobs got things off an odd note that should have triggered more questions than it did at the time.

“All of us use laptops and smartphones now,” he said at the start of the keynote. “And the question has arisen, lately, is there room for a third category of device in the middle? Something that’s between a laptop and a smartphone.”

The question had … arisen?

Actually, this question had never arisen anywhere outside of Apple’s secretive product development labs. Various startups had attempted to create computer tablets in the early 1990s, only to be derailed by Bill Gates and his vaporware WinPad announcements. And Gates himself had later championed the Tablet PC as a new premium portable PC experience that was originally based around smartpens and handwriting recognition. That latter product had first shipped in 2001 and had seen only moderate success. But as Jobs well knew, it was an irritating Microsoft executive, touting the Tablet PC at Jobs’ 50th birthday party, who had triggered his desire to create an Apple tablet that could defeat Microsoft. And that this work had been put to the side after he decided that Apple should focus on smartphones first.

The real question Jobs was asking was whether Apple could take what it had learned from the iPhone and iPod touch and make a larger, book-sized product with the same basic form factor and technologies. And by 2010, the answer was a resounding yes. And rather than justify it based on whether it could simply exist in the marketplace, Jobs at least turned to a list of things that this new device had to do as well as, if not better than, a laptop or smartphone.

“The bar is pretty high,” he said. “In order to really create a new product category of devices, those devices are going to have to be far better at doing some key tasks … at doing some really important things. Better than the laptop. And better than the smartphone.” Those tasks included browsing the web, doing email, enjoying and sharing photographs, watching videos, enjoying your music collection, playing games, and reading eBooks.

Jobs noted that “some people” thought that the Netbook was this device. The Netbook was a low-cost PC that originally arrived running Linux in order to shave costs, but Microsoft has issued a low-cost Starter Edition of Windows that had quickly redefined that market. Apple had, in fact, explored creating a Netbook-class MacBook laptop in 2007, but Apple lead designer Jony Ive asked why the product even needed a keyboard, which he felt made it more expensive and bulky. He suggested using just the screen and a multitouch on-screen keyboard, and Jobs had agreed.

“The problem is,” Jobs said at the iPad launch,” that Netbooks aren’t better at anything. They’re slow, they have low-quality displays, and they run clunky old PC software … They’re just cheap laptops.”

His criticisms were valid and correct: the Netbook’s only appeal was its low cost, but all that PC makers had accomplished by supporting this product type was to send their already-small margins plummeting, triggering an average price per unit drop that lasted for several more years. And most Netbooks owners were no doubt unhappy with those purchases, leading them to seek out other brands, and perhaps other platforms like those provided by Apple, when it was time to upgrade.

As had been rumored, Apple’s new third category of devices would be called iPad. It resembled an oversized iPod touch, with a larger 9.7-inch display with a 4:3 aspect ratio, surprisingly large bezels, even for the day, and a prominent Home button at the bottom when the device was held in a portrait orientation. It was promoted as thin and light, but it was in fact half an inch thick and fairly heavy. It could run iPhone and iPod touch apps and games, since it ran the same system software (which would soon be renamed from iPhoneOS to iOS) albeit in a tiny size or zoomed bigger, plus a growing collection of apps and games that were specially tailored for its larger display. And it was ideal for consumption tasks like reading and watching videos.

Because of the nature of this new device, Jobs didn’t demonstrate it while standing up or sitting at a desk. Instead, it had had an expensive lounge chair and side table set up on the stage so that he could sit there and casually interact with this more personal device. “Using this thing is remarkable,” he said as he sat down. “It’s so much more intimate than a laptop, and it’s so much more capable than a smartphone.”

Like the iPhone before it, the iPad relied solely on multitouch, so you would interact with it using the ten fingers you already had and wouldn’t need to use or remember to bring along a smartpen or stylus. This immediately differentiated it from the tablet devices that had come before it, and from Microsoft’s Tablet PC platform, which had by then picked up basic touch capabilities but relied on smartpens when used as a tablet (or on the keyboard and touchpad when used as a laptop). It was also a much simpler device than any Tablet PC, with no moving parts, and no additional bulk or complexity.

It was also much less expensive than expected, though, in typical Apple form, the base unit came with a minimum of storage, necessitating a costly upgrade for most users. Many had expected Apple to price its tablet at $999 and up, but the iPad started at just $499 for a version with 16 GB of storage. A more acceptable 32 GB version started at $599, and a 64 GB version started at $699. There were also more expensive versions with 3G wireless networking from AT&T or Verizon Wireless that added $130 to the price at each tier and required relatively inexpensive monthly data plans.

Microsoft’s public reaction was predictable.

“I still think that some mixture of voice, pen, and a real keyboard will be the mainstream,” Microsoft co-founder Bill Gates sputtered in 2010, still apparently surprised that his vision of the future had not materialized. “So it’s not like I sit here and feel the same way I did with the iPhone, where I say, ‘oh my God, Microsoft didn’t aim high enough’. It’s a nice reader. But there’s nothing on the iPad [where] I look at it and say, ‘Oh I wish Microsoft had done it’.”

Gates was wrong. But the iPad’s place in history is a bit more complex. And bit more nuanced.

The iPad did not go on to establish the so-called “post-PC world,” as Jobs had announced, but was rather additive as a new product category. It was never as successful as Apple’s other tentpole businesses before it—the Mac, iPod, and iPhone—the latter of which still dominates Apple’s quarterly revenues, the smartphone market, and the personal computing industry. And it suffered from the same pre-pandemic sales shortfalls as did the PC, with Apple experiencing quarter-over-quarter and year-over-year sales declines for several years consecutively.

But the iPad was—and still is—quite successful. Apple quickly shifted its focus from being purely consumption-based to include creation capabilities and, in more recent years, it outfitted the device with keyboard and mouse/trackpad support, USB-C connectivity, and upgraded some models with its powerful M-series Apple Silicon chipsets. The result is a product line that, for some at least, can finally replace a traditional laptop.

From our perspective, however, the iPad’s biggest impact was on Microsoft, Windows, and the PC maker ecosystem. The software giant acted with shock and alarm internally when Jobs pulled off yet another deft product introduction, and it recoiled in horror a year later when he announced in early 2011 that Apple had sold 15 million units, “more than every Tablet PC put together.” 2010 was a year of many important milestones—I’ll be writing about the others soon—but none were as important as the iPad. And none impacted Microsoft’s senior leadership as deeply, instilling a sense of fear, panic, and confusion.

Indeed, by 2010, Microsoft’s Apple envy ran deep. Apple had saved the music industry with the iPod and the iTunes Music Store, almost effortlessly beating back Microsoft’s partner-centric strategies, and in turn, highlighting that the model Microsoft had used with Windows wouldn’t necessarily work in other markets. It had embarrassed it and Windows Vista with a steady series of tech conference presentations and TV ads. And then the iPhone happened in 2007. And along with the subsequent downfall of all the previous major market players, Microsoft finally saw a vision of a personal computing future in which it didn’t participate and was no longer necessary. It was a potential extinction moment.

Given all that, it is perhaps not surprising that Microsoft overreacted to the iPad.

It immediately convinced its biggest PC maker partner, HP, to jumpstart a new sub-market of so-called Slate form factor Tablet PCs that looked just like the iPad but could work with an attached keyboard cover with an integrated touchpad. It accelerated work that had started after the iPhone to bring more multitouch and mobile experiences to Windows, starting with the next version, called Windows 8. And it secretively took the controversial and self-destructive step of creating its own line of PCs, repurposing its existing Surface brand, so that it could compete head-to-head with Apple’s integrated hardware and software experiences and try to capture some of that magic for itself.

None of it would be successful. Windows 8 and Surface would have the opposite effect that Microsoft had intended and would instead further diminish and perhaps forever damage Microsoft’s relevance in personal computing. This cataclysmic failure is widely regarded by many inside and outside of Microsoft as the single worst thing that’s ever happened to Windows. That it came from within and was easily avoided is incredible.

More soon.