Apple Inc. Chief Executive Steve Jobs sat in a leather chair onstage with all the tech world watching Wednesday as he showed off his much-anticipated and talked-about design marvel. He was placing a risky bet that the company could again change the world of entertainment, but this time adding books.
Jobs, clad in his trademark black turtleneck and jeans, called the device “magical” and “revolutionary.” He demonstrated the 1.5-pound tablet-style computer, called the iPad, that will let users download and read books, surf the Web, check e-mail, play games, and watch movies and TV shows.
“It’s phenomenal to hold the Internet in your hands,” said Jobs as he displayed the iPad’s features in a packed San Francisco auditorium, flipping from Bob Dylan and Grateful Dead music tracks to “Star Trek” movie clips.
But some analysts said the iPad did not have enough new magic.
“This was an opportunity to revolutionize the way we consume media,” Forrester analyst Charles Golvin said. “What we got was a big iPod Touch.”
Jobs himself acknowledged that Apple was facing a high bar in convincing consumers that they need a new device wedged between their laptops and smart phones. Apple will begin selling the iPad in late March, at a starting price of $499.
“In order to really create a new category of devices, those devices are going to have to be far better at doing some key tasks,” Jobs said. “We think we’ve got the goods. We think we have done it.”
The iPad will run most applications designed for the iPhone and will have wireless access to the iTunes store, where consumers can buy music and movies. Scott Forstall, an Apple senior vice president, predicted a “gold rush” as software developers enhance their applications to take advantage of the larger touch screen.
Several companies, including Electronic Arts Inc. and the New York Times, were given early access to the iPad to design apps specifically for the device. Apple did not announce any relationships with Hollywood studios, television networks or magazine publishers.
By far the most significant innovation was Apple’s own iBooks application, a digital bookstore that puts iPad into direct competition with Amazon.com Inc.'s Kindle and other e-readers.
Apple has entered into partnerships with five major publishers -- Hachette, Penguin, HarperCollins, Simon & Schuster and Macmillan -- and is looking to form more partnerships with others, including textbook publishers.
Publishers say they are excited about the prospect of delivering interactive elements, including icons that users touch to play video or e-mail friends.
“There has been a disconnect between digital natives and text. This gets books in front of a whole new generation,” said Maja Thomas, senior vice president of Hachette Book Group Audio and Digital Publishing. “We are super excited.”
Ge Wang, co-founder of Smule, which makes music apps like Ocarina for the iPhone, said he couldn’t wait to create similar apps for the iPad.
“This is going to change the way people compute and the way we go about our lives,” he said. “I am raring to go. As soon as the iPad hits stores, I am going to get a bunch of them.”
Some analysts agreed that Apple succeeded in pulling together the entertainment universe into one flat, portable, easy-to-use and affordable device.
“The iPad is going to be huge,” said Michael Gartenberg, vice president of strategy and analysis at market research firm Interpret. “This gives the company a strong position in the tablet market. This was a good day for Apple.”
The launch of the iPad was perhaps the most anticipated in Apple’s history, eclipsing even the iPhone three years ago. On the Web and on Wall Street, speculation reached a fever pitch, transforming the iPad into a device of mythical proportions, some details of which turned out to be false. A few disappointments: no built-in camera, no video chat, no multitasking between different applications, no ability to play Flash content from websites.
The hype worked against the iPad, technology blogger Robert Scoble said. “It did not blow my mind the way the iPhone did,” he said. “I expected a 10, and an 8.7 showed up.”
Wall Street turned out to be slightly favorable toward Apple on the day of the iPad unveiling. Although share prices dipped while the announcement was being made, Apple stock ended the trading day up $1.94, or about 1%, at $207.88
Analysts said it might take time before consumers bite, as it did with the iPhone and the iPod Touch. Golvin predicted that Apple would sell 2 million to 3 million iPads this year, far from the runaway hit some people anticipated.
Where the iPad won over critics was on price. The basic iPad will cost $499, half what some analysts expected. More expensive models with more memory and 3G wireless capacity will cost as much as $829. Always-on Internet access will cost extra. AT&T Inc., which also provides cellular service for the iPhone, will charge up to $30 for an unlimited monthly data plan but will not require a contract.