Why Dell Is Wrong About The iPad

A Dell executive recently lambasted Apple's iPad as too expensive for business technology users. His math doesn't add up.
Speaking in an interview with CIO Australia, Dell executive Andy Lark said, "Apple is great if you've got a lot of money and live on an island. It's not so great if you have to exist in a diverse, open, connected enterprise; simple things become quite complex."

Lark believes that the high cost of the iPad (because, you know, peripherals are necessary) will cause business technology managers to stay far, far away from it as an enterprise computing tool. "An iPad with a keyboard, a mouse, and a case [means] you'll be at $1,500 or $1,600; that's double of what you're paying. That's not feasible," said Lark.

[Editor's Note 4/1/2011: Andy Lark contacted InformationWeek to point out that the costs he was quoting were based on Apple's New Zealand pricing for an iPad 2 configured for business use (meaning with the peripherals and add-ons for a highly mobile worker), not the U.S.-based pricing assumed above. InformationWeek fact-checked those prices with the online Apple store for New Zealanders and confirmed that after the exchange rate is taken into consideration (76 cents to every New Zealand dollar), New Zealanders pay an additional 24 percent premium over the cost of an identically configured iPad 2 in the U.S.]

The first obvious problem here is Lark's math. The cheapest iPad costs $499. Let's say you add a $30 mouse, $70 keyboard/stand, and a mid-range case for about $50. That totals $649, which isn't anywhere near "$1,500 or $1,600." Even if you add those peripherals to the most expensive iPad, you're still only at $979.

By way of comparison, the Motorola Xoom costs $600 on contract. Peripherals, such as cases, stands, and keyboards are extra. If Lark doesn't think that the PlayBook, TouchPad, Galaxy Tab -- uh, the Dell Streak 7 -- and other tablets aren't going to also have peripherals that add to the cost, he's kidding himself.

But this bad math isn't the real reason Lark is wrong.

A company called SmithBucklin, which is a professional services company, just announced that it is giving its employees the iPad 2 both as a reward and as a way to enhance productivity. They'll each be given a 32-GB iPad 2 with Wi-Fi (but can upgrade to a different model for an additional fee). They're also being given $50 for accessories.

Oh, by the way, SmithBucklin has 600 employees. Apple just scored an enterprise sale with a rough value of $360,000.

SmithBucklin isn't alone. Wall Street firms have already been eyeing the iPad as a productivity booster, as are other financially minded companies.

Case in point, I attended an open house run by Intuit recently. Nearly all the personal and enterprise applications and services on display by Intuit and its partners were available on the Apple iPad.

You know what I didn't see at any of the demo booths? Dell products.

I've seen iPads by the dozen at every major trade show I've attended in the last 12 months. They weren't being used by teenagers for gaming. They were being used by professionals who need a portable computing product.

Like it or not, Dell, the iPad is already in the enterprise.

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