The Disruptive Power of the iPad Varies With its Purpose

Before assuming the rest of the tech world should just go ahead and close shop – due to obsoleteness - now that Apple’s (AAPL) iPad is here, Apple fans may want to take a closer look at just how well the device will actually impact the arenas in which it competes.

Here’s a breakdown of the iPad’s key functions, and an idea of how much disruption (if any) is on the way.

Music: For most intents and purposes, the iPad can do everything an iPod can do (except be small), but odds are low that any user would buy an iPad primarily to be an iTunes platform. This isn’t going to open up a whole new music market… not even close.

Video: Ironically, the iPad does NOT play Flash videos despite the fact that Adobe’s (ADBE) Flash technology is one of the web’s most popular video formats. A threat to Adobe? Not really – not unless it causes too much missed business, which would require tens of millions of iPads to be sold and specifically intended to be used as a video player instead of a laptop or desktop.

Even then, iPad video isn’t exciting users - or media companies. Discovery Communications (DISCA) and Viacom Inc, (VIA-B) both seemed disinterested in the device as an outlet.

Telecom (Data Versus Voice): Clearly the iPad shouldn’t be a phone even if it could be…. the device as about a square foot – bigger than a human head. Yet, it makes great use of data-only telco services, which is quickly becoming a bigger business than voice services.

If the iPad is even a moderate hit, AT&T (T) – the exclusive service provider right now - will enjoy new monthly data subscription revenue, which also gives the company access to a pool of potential new wireless customers (via package deals). In that regard, the iPad could prove most disruptive for AT&T competitors like Verizon (VZ).

Applications: Steve Jobs touted the device as a mobile computing device, which it is. In turn, selling software that runs on its operating system seems like a big opportunity…. on the surface. For more than an occasional and casual user though, a touch screen on a flat panel is no substitute for a real keyboard and being able to sit comfortably to type.

And, for the few users who do decide they want to try word processing on the iPad, Apple’s office suite costs all of $10, and Google’s (GOOG) online office suite costs nothing.

Between the lack of need for new software, freeware, and the fact that iPhone apps already run on the device, the iPad’s entry into the fray is likely to be a non-event for the software world.

News: Steve Jobs underscored how the iPad would put revenue-bearing journalism (as opposed to the free content available all over the web) back into sustainable business. That’s why the New York Times (NYT) and Time Warner’s (TWC) Time magazine began work on a digital version of their publication.

If the tablet does indeed replace newspapers and magazines, then the disruption will be a positive one for old-school journalism. The risk is tremendous though. If users don’t need to or want to pay for the online content at home, why would they for a mobile device? For-pay journalism seems attractive to big media outlets, but too many smaller ones may continue offering it for free.

Books: Perhaps Apple is taking the biggest bites out of the hides of the likes of Amazon.com’s (AMZN) Kindle and Sony’s (SNE) E-Reader. Both e-reading devices did something that the iPhone had not yet, which is display e-books on a reasonably-sized screen. The iPad (and not for a whole lot more money) cues up e-books just as well, but comes with a few more bells and whistles that the Kindle and other prior-generation e-readers don’t.

This may actually be enough of a nudge to get anyone who was hesitant to own an e-reader over that hump, and get an Apple tablet in their hands. In this light, e-book publishers stand to realistically gain the most. Though this may hurt Amazon’s Kindle sales, Amazon is also a huge e-book publisher.