I haven’t seen an iPad in person but I have watched a few video demos, like this one from Wired magazine at SXSW.  I definitely want one, although not enough to be among the half a million people or so who have pre-ordered to the point that it is sold out. (Another nice scarcity marketing coup for Apple!)

Thanks to strong pre-order rates, Apple’s manufacturing partners now expect to ship 2.5 million iPads between March and May.  Device sales are only the beginning for Apple of course. As with iTunes, the real money is in the ‘after sales’ – in this case revenue from content providers and advertising. Apple just announced its mobile ‘iAd’ platform for the iPad, which will bring Google and Apple face to face in mobile advertising. Things are starting to get intersting….

I am doubtful Millennials will be among the early adopters.

My students at Notre Dame show no interest. They have all the devices they need to listen to music or access the Internet.  The $499 to $829 price is also a significant barrier. On the other hand, they may not be all that representative. Focus group research by Frank Magid suggests the appeal knows no demographic bounds. Consumers of all ages expressed enthusiasm.  Even stronger evidence of Millennial appeal comes from a study by NPD, which suggests the iPad enjoys its strongest appeal among young adults and Apple owners.

NPD’s Apple iPad: Consumers’ Perceptions and Attitudes report found that awareness is highest among current Apple owners, (82 percent), consumers with $100,000 or greater income (80 percent), and 18-34 year olds (78 percent).  Those demographic groups are the ones with the most interest in buying an iPad. Only 18 percent of all consumers surveyed expressed a real interest in owning an iPad while 27 percent of 18-34 year olds and 24 percent of Apple owners said they were extremely or very interested.

A lot depends on how much new functionality the iPad brings. If it just allows you do to more of what you already do, why invest in a new device and ongoing data plan?

Smart phone penetration is growing smartly. Penetration of smart phones like the Blackberry and iPhone was just 21% in Q4 ’09 according to Nielsen, but is expected to reach 33% by the end of Q4 ’10 and be half of all cell phones by Q4 ’11. With that kind of mobility in your pocket, many will certainly find another device superfluous.

There are suggestions, however, that the iPad will be ‘transformational’.  I am especially intrigued by the announcement from MTV this week of a co-viewing app developed specifically for the iPad and mobile phones.  They observed that 59% of people multi-task when watching TV, and are betting that tablet devices and mobile phones will be easier to play with while watching TV than laptop or desktop computers.  This would mean true ‘interactive’ TV – you interact with friends while watching.  IPad apps for “Beavis and Butthead”, “MTV News” and “VH1toGo” are due in April.  I’m sure this is just the first of many ‘firsts’ we will see from the iPad (social shopping anyone?!)

Integration of interactive ads, social networks and cool, fast visuals could make the iPad a ‘must have’ for Gen Y, especially after the price comes down.

According to the NPD research, price is currently the main barrier.  Among the 18-34 year old demographic, 57 percent of those surveyed by NPD cited price as the number one reason they aren’t ready to buy, 25 percent more than the overall percentage of non-interested buyers.  That discrepancy suggests there may be pent up demand that can be tapped by lowering the price. Given the pattern of start high, end low followed by the iPhone and iTouch, Millennials may in fact be the main sales driver for the iPad.