All the world's an iPad? Maybe

If you listened to analyst calls from Apple's (AAPL), Intel (INTC) and Microsoft (MSFT) this week, there was a bit of dancing -- OK, a lot of dancing -- around one point. How powerful a force is the iPad?

So let's give the question some context:

In its fiscal third quarter, which ended June 30, Apple says it sold 9.25 million iPads. That was equal to 11% of the total global personal computer shipments in the second quarter, according to International Data Corp., better known as IDC. If the iPad were classified as a computer, which it isn't, and set up as a standalone company, it would be the fourth-largest computer manufacturer.

Apple generated more revenue from the iPad than Hewlett-Packard (HPQ) or Dell (DELL) did from their entire lines of portable computers in their February-April quarters. Oh, and Apple shipped more than three times as many iPads than it did its own line of notebook computers.

In short, the iPad -- and the new tablets coming out from Hewlett-Packard, Samsung, Toshiba and others -- not to mention electronic readers like Barnes & Noble's (BKS) Nook and Amazon.com's (AMZN) Kindle -- is big. As Tigger, the "Winnie the Pooh" character, might have said, "It's ridicarus"

Article continues below.Intel CEO Paul Otellini was asked on his conference call Wednesday what the tablets mean to the PC world.

His response: "I believe this category is additive to computing. I don't think it's going to replace any one category. I think it may replace some discretionary sales at any point in time. And I think that's one of the reasons that netbooks are down year on year is this tablet's strength to some extent."

That may be the short-term answer while Intel and PC makers work on what Intel calls "ultrabooks," very thin machines like Apple's MacBook Air.

A parallel answer may be that of Tim Cook, the acting CEO of Apple. He sees see the iPad as a substitute for a portable computer -- and is comfortable with it.

"We do believe that some customers chose to purchase an iPad instead of the new Mac during the quarter," he said Tuesday on Apple's conference call. "But we also believe that even more customers chose to purchase an iPad over Windows PC. And as I've said before, there's a lot more of the Windows PC business to cannibalize than the Mac."

 

The longer-term answer may be that the portable computer ultimately will look a lot more like the iPad: a machine that connects to a docking station. It might have a monitor that's joined to the machine with a USB cable or maybe an infrared port. It'll have a keyboard, probably wireless. Unless you want to tap on the screen.

To get there will require software and chips that can work in so little a space and use next to no power at all. Battery life is always going to be a critical question.

Microsoft's Windows 8 operating system is being built to work on tablets and on chips based on the designs of Britain's ARM Holdings (ARMH). Apple's new Lion operating system is looking to work in ever-smaller devices. (Microsoft owns and publishes MSN Money.)

It's pretty clear the process is well under way.