Apple could be creating some consumer confusion here, as I don’t think that they’re really looking to replace netbooks. The iPad will never be that type of device. I think Jobs’s comment that “Netbooks are just cheaper PCs” was more or less just a jab at PCs.

I think in some ways you need to look at the buying decisions that drive these products.

Why am I looking to buy a netbook?
- I can’t afford a more powerful computer
- I travel a lot for work and need to be productive when doing so (lighter, easier on the plane)
- I’m a student (cheap, light)
- Cheap second computer to get work done (while watching TV, at the cafe)

None of the above are the real competition for the iPad. Here’s where there’s overlap and where I’d argue that the iPad could better deliver:
- Reading email, casually browsing the web (Facebook, the news, imdb, sports scores)
- Watching movies (in bed, in transit)
- Use in the Kitchen (recipes, watch movies)

Plus, iPad could uniquely deliver on:
- social computing - as in the sharing of the actual device (watching movies, sharing photos, playing games)
- A computer I would buy my mom (she never turned the netbook I bought her on)
- reading a book, newspaper, magazine (I know the display will make me go blind)
- childhood education (or distraction device)
- feeling at home and looking cool in my living room

Imagine seeing a commercial for a netbook next to one of the iPad - do you really think they’d be going head to head? If Apple’s video is any indication they will be positioning this device in a different way in consumers’ minds. We’ll see though.

Now getting to your point on price… It all boils down to how well Apple can convince us we need this device. People of all income brackets will open their wallets. Supposedly sales of iPhone went UP during the recession. People wanted to treat themselves to an “affordable luxury”.

But let’s step back a minute. When the iPod first came out it costs $400! And guess what? It doesn’t really work unless you own a computer. That was a gamble considering who some of their hopeful (and eventual) customers were.

And look at what an iPhone sets you back. No, it’s not $99 … It’s close to a minimum of $1000 the first year and close to that thereafter.

And I disagree with Mr. Johnson’s quote above - “we all accept that smartphones were in our future.” That’s so 20/20 looking back.

$1000/year so that I can upload my mobile photos to facebook and find the closest Starbucks? Would you have put money down on that “inevitable future?”

Apple miraculously made a consumer smartphone happen - I personally think that it would have taken many long years for that to happen without them.

What the iPhone did do is cement tablet computing in our future. And that’s their play here - “see how easy your iPhone is to use … well you’ll be right at home on your iPad”