Why to pass on the New iPadBy Robert Eberhard, The Motley Fool


I'm no Apple (AAPL) hater. I'm a huge fan of my iPod and I think iTunes is one of the greatest delivery systems for content in recent history. Still, I still don't see the appeal of a $600 piece of technology that will be replaced in two years by the same thing with even more bells and whistles.

Clearly, I'm in the minority here. With the release of the "new iPad" last weekend, folks clamored to get the latest in a long line of must-have products, with Apple selling more than 3 million devices last weekend alone.

I, however, was not among the masses and probably won't be.

The Motley Fool's Rick Aristotle Munarriz outlined three reasons why we, as collective consumers, will be buying the much-maligned new iPad. Following his lead, here are three reasons of my own that I won't be buying the new iPad.

1. I have a tablet that suits my needs

While I appreciate that the iPad in its various versions has probably outsold every other tablet ever made, I purchased a Kindle Fire as my tablet of choice. Amazon.com's (AMZN) tablet, though smaller and not nearly as technologically advanced as its larger cousin, was much more affordable, checking in around $200. Throw in a year of Amazon Prime, and the total price for a Kindle Fire is less than half the cost of an iPad.

Sure, you can replicate the benefits of a Kindle/Prime bundle on the iPad with a subscription to Netflix (NFLX) and Hulu, but the annual and upfront costs are much lower with the Kindle. Combine that with what is perhaps the best e-book experience (sorry, iBooks), and you truly have an infrastructure built around the Kindle family of devices. After the relative success of the initial Fire, I could easily see Amazon expanding its Kindle family further, perhaps even including a 10-inch model to compete directly with the iPad's screen size.

2. $600 can be turned into more money elsewhere

The current price of a new 32GB iPad is $599. And, like a new car, once you buy it, it begins to depreciate immediately. You would be hard-pressed to find a buyer for a used iPad close to that price point. However, if you instead purchased a share of Apple stock, even at its current price of around $600 a share, you have the potential to reap some return from the company's performance. (I regret having to unload the few shares I owned when it was trading at around $450 a share.)

The past five years have shown remarkable growth in both share price and revenues, but only time will tell whether this will continue much longer into the future. Combine its runaway performance with its recent dividend announcement, and you have what may be a lucrative investment going forward.

3. I'm a Windows guy at heart

As much as I love my iPad and iTunes, I am ultimately a Windows fan. So I want to wait and see what Microsoft (MSFT) does with Windows 8 in tablet form. Though many of the current things I do on my Windows-based laptop can be replicated on an iPad, I've grown comfortable with the Microsoft Office suite of products and look forward to the day when everything is replicated across my various devices. Although I don't think it would be hard to learn how to really use an iPad, I prefer sticking with what I know for now.

To Each His Own

Even though the iPad isn't for me, I can understand why people might purchase one. I'm sure we'll see some blowout numbers when Apple reports sales totals with upcoming earnings releases. This is why if I was in the position to spend $600 right now, I would much rather buy even one share of Apple, since the future returns outweigh what would be the sunk cost of purchasing an iPad.

If you were among the first to buy a new iPad, please feel free to tell me your reasons in the comments section below.
Though the iPad dominates the market, Apple is not the only way to benefit from the booming tablet market. Our analysts have identified the "3 Hidden Winners of the iPhone, iPad, and Android Revolution," and you can find out who they are.

Motley Fool contributor Robert Eberhard owns a Kindle Fire and an iPod Touch, but he holds no position in any company mentioned. The Motley Fool owns shares of Amazon.com, Apple, and Microsoft. Motley Fool newsletter services have recommended buying shares of Netflix, Microsoft, Amazon.com, and Apple and creating a bull call spread position in Apple and Microsoft.

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15 Comments

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Rick Ludwig

Another financial person trying to write about Apple to boost their hits.

The biggest reason this article is a waste is it's just one guy trying to 'justify' his non-purchase. It's like writing an article on why I didn't make a split-second decision to go to Burger King for lunch today. While C|Net articles are heavily biased at least they make technological arguments trying to help consumers make valid purchasing decisions - none of the reasons listed here do that. This article isn't going to persuade or dissuade anybody on their purchase plans.

Of the three arguments listed, the second one is the dumbest. First of all, ALL consumable products decrease in value. Second, of all tech products, Apple products tend to hold their value the best. Third - who, in their right mind, would say "I'm in the market for a new technology product, so I'm going to buy stock instead"?? How about "I'm hungry, but instead of buying food, I'm going to buy a magazine about food because that will last me longer so it's a better investment." Really, REALLY, lame.

The only "point" that even comes close to being valid is the "I'm going to wait for Windows 8" - though, to be honest, if you're only valid argument on passing up on buying an iPad is waiting for Windows 8, then you probably weren't a potential customer anyway - you should have just written an article about why you're super excited about Windows 8.

March 27 2012 at 2:16 AM Report abuse rate up rate down Reply
vcapalm

Here some honest feedback from a previous Mac hater. I won my I-Pad2 on a $5 raffle. Only kept it because my kids would have killed me if a sold it. Since then, I've purchased 1 laptop (windows based) and 1 tablet (Samsung 10.1) to replaced daughters HP that died. Laptop crashed after 35 days from virus. Tablet was slow and confusing to operate after using the IP-2. Went out and traded tablet for I-Pad3 and it's all we use now....

March 26 2012 at 4:04 PM Report abuse rate up rate down Reply
gohlsson

Apple doesn't have customers - it has disciples.

Woe is you if you dare to contradict one of them.

March 26 2012 at 2:58 PM Report abuse +2 rate up rate down Reply
cragel

When you bought your Kindle, did you have the opportunity to play with the New iPad side by side? If not, you missed out on an experience that would possibly have changed your mind. Big TIme.
It's like going out for dinner and getting a burger special on sale instead of prime rib.
Life is full of choices - you made yours without knowing the other side of the equation.
You get what you pay for.
Good Luck!

March 26 2012 at 2:34 PM Report abuse rate up rate down Reply
Hal

Much-maligned? Apple is now a big target, and people are stretching to find a mistake. The Consumer Reports story was even softened by CR itself, yet the "headliners" used phases like "you can fry an egg on it...well almost." Then there was "fullgate," where Apple was framed as duping consumesr with the 100% charged indicator. Do you fill a glass to the brim before you call it "full?" Best was the Apple=Steve Jobs fallacy, which took the stock down to $80 when his illness became public. That' s where I bought it, then sold a few shares recently to finance my new iPad.

March 26 2012 at 1:23 PM Report abuse rate up rate down Reply
Linda

I am buying the new ipad today.

March 26 2012 at 12:44 PM Report abuse rate up rate down Reply
lookg4men2

i bought my new appple ipad 3 on the first day at 7am, good bye windows and my other virus infected lap tops and desk tops,hello apple, i love you!

March 26 2012 at 11:24 AM Report abuse rate up rate down Reply
George Muller

They don't pay this guy to write do they? If they do they are wasting good money.

March 26 2012 at 9:30 AM Report abuse rate up rate down Reply
JimA

And I bet Robert didn't buy Apple stock when it was at $12 or $200 for the same brilliant reasons!

March 26 2012 at 6:46 AM Report abuse rate up rate down Reply
RattyUK

"I'm no Apple (AAPL) hater."

Then, using the passive-agressive approach, you explain in several paragraphs why you do hate Apple.

" I purchased a Kindle Fire as my tablet of choice"
So you immediately decided that you didn't want to communicate using it, lack of microphones, let alone the lack of a single camera immediately tears away a whole swath of uses.

"And, like a new car, once you buy it, it begins to depreciate immediately."
Well ebay / craigslist and the rest appear to completely disagree with you on that point.

"I am ultimately a Windows fan."
This appears to completely contradict your opening sentence.

You got paid for this?

March 24 2012 at 8:00 PM Report abuse rate up rate down Reply
1 reply to RattyUK's comment
Estella

"I am ultimately a Windows fan." "This appears to completely contradict your opening sentence". No it does not. Just because you are a "Windows fan" does not mean you are an "Apple (AAPL) hater. That is just plain assumption without proof. You could have said "In my opinion" but you did not.

March 25 2012 at 9:40 AM Report abuse +1 rate up rate down Reply