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So the iPad is the Cheaper Alternative

The more I read about the expected avalanche of iPad killers, the more I’m surprised about the miracle Apple has wrought. For a company that is credited — or accused — of charging premium prices for luxury gadgets, the iPad is emerging as a surprisingly cheap contender.

Consider the expectations before the iPad was launched. The consensus had prices approaching $1,000, as tech pundits wondered how Apple could possibly emerge triumphant against the burgeoning netbook market.

When the starting price settled in at $499, the critics weren’t silenced. That was still somewhat costlier than an Amazon Kindle, and, besides, you can get a netbook for less than $300. How could Apple possibly compete with that?

As the more knowledgeable analysts have correctly stated, you can’t really compare the iPad and the Kindle. The former is very much a handheld computer, whereas the latter is essentially an e-book reader. The iPad can serve that purpose, but that’s only a small part of its usefulness.

When it comes to the so-called iPad killers, it appears that the new entrants from such companies as Dell and Samsung will use sleight of hand to convey the illusion of a lower selling price. As with cell phones, you’ll be tied to a two-year service contract after paying what seems to be a modest upfront cost, usually in the range of $300. But as soon as you calculate the total cost of admission, the iPad emerges as surprisingly cheap. Remember, even if you pay extra for the 3G version of the iPad, you don’t have to order a data plan unless you need it, and then it’s strictly on a month-to-month basis.

Without a contract, the competitors might end up charging lots more than Apple for less. Less? Well, the first products to hit the market are slated to use the Android OS, which has not been optimized for larger screens. The Chrome OS, originally designed as a Web-based OS for netbooks, is not expected until 2011.

This isn’t to say that the PC industry won’t get the message. If one product fails, they’ll release dozens more, hoping that one or more will gain traction, or they’ll just saturate the marketplace to confuse and befuddle the would-be buyer. You’ll see the come-on prices widely promoted, and sales droids getting large spiffs from these companies will proudly claim they are all much cheaper than the iPad. After all, isn’t Apple the BMW of the tech industry? Why pay more, when you can get something almost as good for much less money.

In the end, you’ll also see imitation tablet computers selling for less than the iPad, even without a contract with a wireless carrier. That’s all well and good, but the real issue is whether that will make a real difference. If Apple is selling tens of millions of iPads, it would become more and more difficult for also-rans to get a huge piece of the pie. It’s not the same as the smartphone industry, where there were decent and widely-accepted products before the iPhone arrived, such as the BlackBerry.

Yes, the iPhone made a huge difference, particularly in making touchscreens credible alternatives to the tiny physical keyboards most smartphones offered. The arrival of the App Store delivered a lot more value to Apple’s mobile platforms, with a far richer range of software than is presently being offered even via the Android OS.

But the core functionality of a smartphone was already there. Apple just refined it.

With tablet-based computers, they had gone nowhere for years. Microsoft kept touting the imminent arrival of the tablet revolution, and it never happened. Aside from getting a little traction in vertical markets, such as medical offices, tablets were non-starters.

Apple changed the rules. It’ll take a while for the competition to get the message and come up with gear that’s almost as good. You might compare it to the digital media player market, where there were lots of entries before the iPod arrived, but nobody cared. The aftermath of the iPod’s success brought with it loads of promised killer products, but none gained traction. Even when Microsoft double-crossed their PlaysForSure partners and released the Zune, a product with a closed ecosystem that was designed to emulate the iPod and iTunes, it went nowhere.

This isn’t to say that the iPad is the next iPod in terms of long-term success. But Apple has seriously raised the bar, and it doesn’t seem yet that the competition understands how to offer compelling alternatives. A hint: It’s not going to happen by using the bullet point feature method, where they evaluate what the iPad doesn’t do, and add some of those features to their gear. So, yes, some of the announced products may have front and rear cameras, but that doesn’t mean they can take good quality pictures, or that the software behind them is well executed. That is the message Apple’s competitors haven’t grasped.

But it’s always possible a real iPad-killer will appear, and, as a result, help inspire Apple to work harder and build better iPads. That is the best possible result, but it may take a while for anything of that sort to happen. It may, in the end, be too late for the rest of the PC industry.