Image: Apple CEO Steve Jobs
Kimberly White  /  Reuters
Apple Chief Executive Officer Steve Jobs holds the new " iPad" during the launch of Apple's new tablet computing device in San Francisco.
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msnbc.com
updated 1/27/2010 2:58:50 PM ET 2010-01-27T19:58:50

After months of rampant speculation, Apple Wednesday announced a touchscreen tablet computer, the "iPad" for consumers who want to take their movies, TV shows, music, games and reading with them, be it around the house or on the go. Pricing starts at $499, and it should be available in 60 to 90 days.

"We want to kick off 2010 with a truly revolutionary and magical product," CEO Steve Jobs told a packed audience at the Yerba Buena Center for the Arts in San Francisco on Wednesday.

The wireless device can be used with Wi-Fi, as well as run on AT&T's 3G, or third-generation, wireless network. AT&T has been the exclusive carrier of the iPhone in the United States since its release in 2007, and some were hoping that Apple's new tablet would also work with other carriers' networks, including Verizon Wireless.

The iPad will cost $499 for a 16-gigabyte model, $599 for a 32 GB version and $699 for a 64-gigabyte model with Wi-Fi only, and will be available in 60 days. It will cost an additional $130 for units that also can use 3G, which should be out in 90 days, making the most expensive model $829. Jobs said AT&T will charge $29.99 a month for "unlimited use" and $14.99 a month for up to 250 megabytes. There will be no contract with AT&T required for the plans, he said.

"So far it really looks like an oversized iPod Touch," said Avi Greengart, Current Analysis analyst, blogging from the event itself for Reuters news service.

The iPad weighs about 1.5 pounds, is 0.5 inch thin, has a 9.7-inch display and should have a battery life of 10 hours, Jobs said. It uses what he called Apple's own 1GHz A4 chip, and flash memory, ranging from 16 to 64 gigabytes. The tablet has YouTube in high-definition built in to the iPad and Apple's online iTunes Store, which will add an "iBooks" for purchase.

"Well, it's official. Apple is competing with Amazon," said Ross Rubin, director of industry analysis for The NPD Group research firm. Apple will use the "ePub" format, "joining Sony, Google and Barnes & Noble, he said.

The tablet uses multi-touch finger gestures and swipes like the iPhone, but the iPad's "larger screen requires less swiping to navigate," said Rubin. "That's a big plus from the iPhone."

Video: 'iPad a disappointment'

Several uses of the tablet were shown during its unveiling, including e-mail, games, video and reading The New York Times on it. Martin Nisenholtz of The Times, on stage, said that the newspaper’s iPhone app “has been downloaded 3 million times,” and that the company wanted to “create something special for the iPad … We think we’ve captured the essence of reading the newspaper” on it.

Apple's new product comes at a time when e-readers, like Amazon's Kindle and others from Barnes & Noble and Sony are on the market, with more coming this year from companies such as Samsung and the Hearst Corp.

Last year, about 3 million e-readers were sold. Estimates are another 6 million will be sold in 2010 according to the Yankee Group. The Kindle, which has a 6-inch screen and sells for $259, has the bulk of the e-reader sales.

"There are about 6 million people who are gearing up this year to buy an e-reader. And they’re going to spend between $250 and $700 on it," said James McQuivey, Forrester Research principal analyst. "They are already people who care about media, and who are willing to spend money on media."

Video: Did Apple flub with iPad name?

"So, if you can say to them, 'Gee you can spend $350 on a dedicated book reader, or you’re going to get this amazing Apple device at twice the price, but with the ability to do much more than read books,' " then Apple's tablet has a good chance of success, he said.

While many of the tablet's functions — Web surfing, movie watching, music listening — can be handled on netbooks, lighter and relatively inexpensive laptops, Apple isn't viewing its tablet as a laptop without a keyboard, McQuivey said. "Apple sees this as a personal media experience that they can create."

The tablet's "most revolutionary impact is on the way people consume media in the home," he said. "You take it from room to room, you dock it next to your bed, it becomes your alarm clock. You dock in the living room, it’s a photo frame and a video server for your TV; you dock it in the kitchen, and it displays your recipes for you."

Other major companies are coming out with their own tablets, with many of them announced at the Consumer Electronics Show earlier this month.

HTC and Google are reportedly jointly working on a tablet. HP and Dell are each planning their own tablets. Microsoft may be too, although during CEO Steve Ballmer's speech at the Consumer Electronics Show, he shared an HP slate prototype, not Microsoft's talked-about "Courier" tablet (Msnbc.com is a joint venture of NBC Universal and Microsoft.)

Pen-based tablet computers have been tried over the past decade with little consumer success, although they have made inroads in the business world.

Strong sales of Apple's device are not guaranteed, especially with a still-shaky economy and netbooks — with prices of between $300 and $400 — continuing to be popular.

In pricing the iPad, Apple surprised some, who expected the device to cost up to $1,000. ChangeWave Research, which surveyed 3,314 consumers this month, said there is "strong consumer interest" in an Apple tablet, and that 75 percent of those who are interested say they'd be "willing to pay $500 or more," and 37 percent say they would pay more than $700.

Shopping site Retrevo.com's survey of 500 consumers found that 70 percent of them said they will not spend more than $700 for an Apple tablet. Also, 44 percent said they would not buy such a device if it requires a monthly data plan for Internet access.

And while the iPhone and iPod have been huge sellers for Apple, the company has had its share of product launches that went "thud."

Among them, the 1993 release of the Newton MessagePad, a pen-based tablet that cost around $800; the Power Mac G4 Cube in 2000, and Apple TV in 2007, a set-top box for streaming audio and video to a TV from a computer's iTunes program.

The Associated Press and Reuters contributed to this report.

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