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> The iPad is a different beast entirely and (as I've been saying for 1.5+ years now) IMHO much more important and will be a much bigger market than the phone market. It will (and already is) cannibalizing a lot of PC usage and sales.

Three questions/comments:

1) Why do you feel it is bigger than the phone market? I'm skeptical of this, at least until the day tablets and laptops merge (imagine a tablet that docks into a keyboard/touchpad). Almost everyone needs a phone these days. And if you could only have one, I imagine most would take the laptop/desktop over the tablet.

2) How much evidence is there for large-scale cannibalization? I always figured the iPad is growing so much faster than PCs, because the PC market is saturated and frequent upgrades are no longer necessary. Everyone has a computer already and a 4+ year old one works fine. Tablets are new and desirable - but is there that much evidence yet that a tablet is actually more desirable than a computer?

3) Strongly disagree that apps are more important on a tablet than a phone. Phones are lower power typically and screen space is at a premium, so I'd argue that native apps are more important on a phone. Tablets should be able to handle webapps fine.

1) I would rather have a dumbphone and a tablet than just a smartphone. You can do way more on a tablet than on a phone, simply because of screen size. On top of that the tablet is an attractive choice over a laptop/desktop because of the price and the portability.

(obviously personal opinion)

On capability (relative scaling)

Phone: 1 PC: 10 tablet: 5

Portability: Phone: 10 PC: 1 Tablet: 3 (doesn't fit in my pocket.. main advantage is can use it standing up)

Price-wise, equally-spec'd laptops are pretty on par with tablets cost-wise.

> 1) Why do you feel it is bigger than the phone market?

I only use my phone for calls, messages (SMS/email), maps and occasionally for Web usage. That's 95% of my phone usage at least. I don't believe my experience is atypical. The phone is ultimately a communication device (and, these days, a camera).

IMHO it's reasonably likely we're heading for a point where the phone will be replaced by a (largely if not completely) nonvisual communication device. Maybe the whole glasses thing will happen (although I'm skeptical that any electronic display can match the latency required to interpose imagery over what you're looking at, which is a problem for augmented reality in general).

Look at it another way: how much do you use your phone versus a tablet (assuming you have one)? For me, it's a factor of 10-20x in favour of the tablet. I know other people vary on this. Some spend all day sending and reading messages. A few even spend all their time on Facebook (or even Twitter) on their phones.

Basically, I just believe tablets will be bigger because rather than being hybrid communication devices like phones they'll encroach on general computing.

I use a tablet for Web browsing, email, books, games, Netflix and photos. I have a Macbook Air. I use it a lot too but if I'm just reading/browsing/consuming, I'll use the iPad in preference to any other device. And that covers a lot of my technology use.

> 2) How much evidence is there for large-scale cannibalization?

There is some evidence [1] but the trend (if it is that) is, at best, emergent.

> 3) Strongly disagree that apps are more important on a tablet than a phone.

Native apps are vastly superior on the iPad to Web apps too. Low power is an issue for tablets too. People use them on sofas, on buses/trains/planes, etc. Battery life matters. The battery life of an iPad dwarfs that of pretty much any other laptop.

Compare native apps to the ghastly hybrid native/Web apps that some put out there (that are essentially a UIWebView with HTML/JS/CSS). They have all been in my experience terrible.

[1]: http://betanews.com/2011/01/12/it-s-official-ipad-sapped-win...

> Look at it another way: how much do you use your phone versus a tablet (assuming you have one)?

> If I'm just reading/browsing/consuming, I'll use the iPad in preference to any other device.

To each their own. I don't own a tablet, but used my roommates iPad for a few weeks to see what all the fuss was about. I constantly longed for my laptop, which was far more comfortable to use, faster (in terms of web navigation), larger screen space, etc.

Sure I use a phone less than a laptop, but I absolutely need both.

I think I tend to agree. I have an iPhone, MacBook Air, and iPad. My use of each is vastly different - the Venn diagrams hardly overlap.

My phone is primarily used for light-duty consumption of text content (email reading, twitter, etc.) and gaming when I'm bored (waiting rooms, transit, etc.). And, of course, voice communication. Web browsing, reading eBooks, etc. is quite difficult on the small screen, retina-display notwithstanding. I always have my phone with me.

The iPad tends much more to web browsing, sending email (it's difficult to send an email of any length on a phone, much easier on the iPad), playing games, etc. I have it sitting next to my couch and when watching a "live" TV show (you know, the things with commercials) I'll absent-mindedly pick up the iPad and thumb through Tweets or HN or Reddit etc. The battery life on the iPad is considerably better than my phone - so when I go on long trips I'll use the iPad as my time-killer. My iPad is within reach 100% of the time at home, and 100% of my time on vacation and long trips.

My MBA is used for hard-core web browsing (researching lots of data, figuring out problems = e.g. lots of task switching), programming, writing papers (the physical keyboard can't be beaten; I don't own a bluetooth keyboard so don't know if I'd write on the iPad), etc. I work on my laptop, but in general it stays put (strange, eh?). However, I may take it on short or long term trips if I know that I will be doing any work or needing the power and flexibility of a "real" computer over the iOS devices. This is becoming more infrequent, however.

In short:

iPhone: Portable gaming device and light-duty text consumption. With me 100% of the time.

iPad: Web browsing, gaming, and video player. With me 100% of the time at home and long trips/vacations

MBA: Hard-core computer-y stuff that you can't do on tablets or phones (or just too painful to do). Rarely travels with me on vacation and long trips.

Apple has done a perfect job positioning all three devices right in the sweet spot of what I want to do. They own each of these scenarios. This is why I firmly believe that Apple will never produce a smaller iPad or a larger iPhone - it doesn't create a "new" space that isn't already overlapped with the iPhone or iPad, and in the weird not-quite-phone, not-quite-tablet space it inherits the weaknesses of both.

In order to see a smaller iPad or bigger iPhone, Apple would have to carve out a distinct space in the market that isn't better served by the existing products. That seems quite difficult.

Android manufacturers seem content to produce a panoply of devices without regard to actual utility and devoid of real strategic thought. As long as they continue to flail about, I see no reason why Apple won't continue to dominate the market.

There are over 5 billion cellphone subscriptions in the world. There are more cellphone subcriptions than TVs, automobiles, or toilets.

According to Pew 46% of American adults already have smartphones. This number is increasing rapidly.

Apple sold 11.12 million iPads in Q4. That's already more than an single PC manufacturer. I'm sure they'll do even better in the year ahead.

But that's not going to add up to a "much bigger" market than the phone market.

So (part of) your argument is that tablets in general have less built-in utility, and iOS tablets have access to a huge range of apps and content to make them useful than other tablets don't have access to. While that's true right now, I don't see why this will be the case in the next couple of years.

First off, apps: I would expect an increasing number of apps to be released multi-platform, for iOS and and Android and possibly for Windows P.O.S., because hey, why not release it multi-platform? The web is an important special case of multi-platform development and Google is keen on establishing web apps as just apps, too.

And content: While Apple owns a huge amount of the market, they don't own the actual content and I don't see why the content owners would restrict themselves to just one distributor. They'd reach a wider audience and they might even get a better deal if there's competition on the market.

The situation with the iPad might be similar to the iPod, but I don't think it's because of the content ecosystem. As you say, there are many other ways of obtaining MP3s, including many legal ones. I'm sure Google Music or Play or whatever they're calling it now will be just as convenient. It's a bit similar in that the iPods were always iconic. I don't want to play up the status symbol angle because I think it's exaggerated; the point is that to many people an iPod was almost synonymous with MP3 player, and at least it was the default option. The same seems to be true with the iPad.

> First off, apps: I would expect an increasing number of apps to be released multi-platform, for iOS and and Android and possibly for Windows P.O.S., because hey, why not release it multi-platform? The web is an important special case of multi-platform development and Google is keen on establishing web apps as just apps, too.

Last year's iPad and iPhone run web-apps faster than any other tablet or phone by a large margin, so Google's being "keen on establishing web apps as just apps" isn't going to help them - they (esp now considering the Moto purchase) will need ensure that the browsing experience on their tablets are better than the iPad.

However, the fact is that browsing/webapps experience is merely one of the factors where Apple has a huge lead. Even in media content, Apple is the leader, but if you look at songs vs. apps, the writing is in the cards - apps are by-and-away the big money maker for device content and the gap is growing.

on a related subject:

Apple sells out of launch-day iPads

http://www.appleinsider.com/articles/12/03/09/apple_sells_ou...

I think the difference with smartphones was that before Apple entered the market there were already many well established phone companies. What were they going to do, just shut up shop because Apple had shown up with a superior product? They just had to start selling better handsets, and since buying or developing a mobile OS is tough, they of course pounced on the free Android offer. The only way that market could have worked out any different would have been if all those companies somehow decided they'd rather just die off. Continuing to sell old-fashioned handsets indefinitely was simply not an option.

With tablets on the other hand, where were the established players prior to Apple joining the fun? I can't think of any companies whose bread-and-butter was tablet computing and who would need to compete with the iPad or go out of business.

For phone companies, failure to adopt Android would be disastrous (unless they had access to another half-decent OS already eg. Palm or RIM). For consumer electronics companies, trying to enter the tablet business and compete with Apple could bring disaster. Android does not play the same role here.

I agree with you about the importance of ecosystem on the iPad vs the iPhone. However, if you're going to compare an iPad to an iPod - it's not just ecosystem that made the iPod dominant but Apple's willingness to introduce a whole line of MP3 players, from the $80 shuffle on up. They haven't shown the same willingness to introduce that kind of variety to either iPhones or iPads.