How Apple's iPad Might Kill its iPhone Business

The iPad does most of what the iPhone does, and adds some tricks of its own, along with a much bigger display. Does it threaten Apple's iPhone business?

If you already have an iPad, why buy an iPhone? Why not just get a cheap cell for making calls, and use the iPad for everything else?

Most of what I do on the iPhone, I can do better on the iPad. I check email. I use Twitter and Facebook. I browse the Web. I read articles with Instapaper. I write the occasional note. I listen to podcasts. All of those things are things I can do with the iPad, without paying a minimum $99 and tying myself to an AT&T contract for an iPhone.

Of course, even aside from the ability to make phone calls, the iPhone still offers one major feature that the iPad lacks: Portability. You can stick an iPhone in your pocket and carry it with you wherever you go.

But an iPod touch is pocket-sized too. It's an iPhone without the phone parts. And it starts at $199, and doesn't require me to sign a contract committing me to pay AT&T well more than $1,000 in monthly installments.

Could the iPhone get squeezed out, by the iPad at the high end and the iPod at the low end?

We'll see what happens later today, when Apple will announce the iPhone Version 4.0, which will probably ship in June or July. Apple will have to come up with compelling new capabilities, low price, easy contract terms, or all three, to continue to make the iPhone attractive. I expect that's what they'll do, because it's never a good idea to bet against Apple. But maybe they won't pull it off this time. Even a champion stumbles sometimes.

Me, I'l probably get an iPhone this summer when the new ones come out? Why? Because I'm still a generation back; I have the 2008 iPhone 3G rather than last year's 3GS. I want a better camera in my phone. And, in case you haven't noticed, I'm a bit of an Apple enthusiast. So I'll upgrade.

Or maybe I won't upgrade. After all, the economy still isn't looking that great, and I already have an iPad.

My colleague Seth Weintraub will be liveblogging the iPhone 4.0 announcement starting 1 pm Eastern time Thursday.

In other Apple discussion around the Internet:

Daring Fireball's John Gruber reviews the iPad, and does his usual thorough, thoughtful, and very readable job. He talks about the tradeoffs Apple made to give the iPad its low price, fast speed -- unreasonably fast, considering its relatively underpowered hardware -- and long battery life. And he talks about a lot more.

And my friend Cory Doctorow writes about how Apple could have created an iPad that respects freedom, by making only one tiny change. This is, of course a follow-up to his controversial essay Friday: "Why I won't buy an iPad (and think you shouldn't either)".

I have enormous respect and affection for for Cory, but, obviously, I disagree with him about the iPad. My family bought two--one for me, one for my wife.

Cory makes great points. The iPad should be an open architecture in the way that he describes--and, as he says, it would be a very simple change, one that in no way compromises Apple's dedication to simplicity, or changes the device for most users in any perceptible way. And I dislike Digital Rights Management for the reasons he describes.

But I'm willing trade those things for the convenience and elegant user experience that Apple provides. I respect Cory's decision to do otherwise, and his reasons for doing so--but he hasn't convinced me that I'm wrong. I'm just making a different choice.

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