> The tablet wars are up and running,” Strategy Analytics analyst Neil Mawston reportedly said. 95% to 2.3%. This qualifies as a war?

By this time next year, maybe, maybe we’ll have a war. But even that is anything but a sure bet. Without the carrier subsidy pricing model holding it back, there’s little chance that the iPad will have anywhere near the challenge the iPhone has had trying to expand market share in the US. And with no one capable of beating Apple on price, I honestly don’t see how anyone is going to make a go of a tablet product anytime soon.

But people insist on thinking everything is a direct comparison to something else in the past. “Apple will cede all of its share to Google, just like it did to Microsoft in the PC market.” “Android Tablets will automatically succeed, because Android phones did.” Never mind that there are fundamental differences between these markets and the surrounding circumstances.

If you want a more apt comparison to the iPad situation, look at the iPod Touch. Close to four years now, and the iPod Touch has absolutely no competition. No one can beat it on price, and it absolutely dominates its market.

> Spooky Playtime was amazing collaborative effort. It showed us what we can do if we really put our mind to it.  So now you know the story of Spooky Playtime. So what does it take to write a kick-butt iOS game in a month (and not have your wife and kids walk you on you)? > > It takes a lot but here are some of the major factors: > > 1. **Family first** – yes we were under a tight deadline but we still had those family obligations.  Putting your family first will keep the family happy and understanding when you have go into hiding to get the game complete. I think also getting the whole family involved made everyone feel a part of it. > 2. **Understanding significant others** – This game would not have gotten done if our wives hadn’t of let us get away for a few days.  This is priceless and extremely important. > 3. **Varying but overlapping skill sets** – The 3 of us all excel in different areas and all of our skills overlap. So if someone is tied up with something then the other can fill in and move things along. Very important when on a tight deadline. > 4. **Ability to function with little sleep** – There were a lot of nights where we would only get 3 – 4 hours sleep a night. This can’t go on for too many days in a row but this is vital when trying to write an app in a month. > 5. **Passion, Heart and Fun** – If you don’t have these 3 factors you’ll never get an app complete.  Contrary to what you may hear in media writing an iOS app is not something you can do overnight. It’s not as simple as building a web page. It takes concentrated effort that takes a lot time.  Without passion you’ll drop the app the for something else. Without heart it won’t have that special charm that makes it stand out from the thousands of other apps. Without fun it’s just not worth doing. My friend and collaborator at [Bombing Brain](http://www.bombingbrain.com "Bombing Brain") Tim Cochrane wrote up a nice two-part article on the making of Spooky Playtime. The summary I quoted above sums it up nicely.

But if you’re at all interested in seeing what it takes to put together a decent iPhone/iPad app, I encourage you to read the entire piece, as well as my follow up on some of the graphics, which I should be posting in the next day or two. Maybe if more people realized how much sweat went into these things, they’d hesitate before calling 99-cent apps “worthless.”

You can start at part one here.

> Shaw Wu with Kaufman Bros. said in a note to investors Thursday that some have incorrectly interpreted the information from Apple’s 10-K filing as new guidance. He noted that the information is consistent with what the company said in its most recent earnings call, and in almost every annual 10-K filing about the upcoming fiscal year. > > “Keep in mind, SEC filings are written by lawyers and tend to be conservative and cautious, as this is the most prudent thing to do from a legal standpoint,” Wu wrote. He has recommended that investors take advantage of a potential share weakness. > > Wu also noted that investors who may have become fixated on Apple’s cautious gross margin projections would have passed on a “significant investment opportunity” the last 5 to 7 years. Amazing, how I predicted yesterday that Wall Street would overreact to Apple’s gross margin warning, and they actually overreacted. I must be clairvoyant.

I love how this guy suggests that investors “take advantage of a potential share weakness.”

In other words, we’re all overreacting on purpose, so our rich friends can buy the stock cheaper than it’s worth and make a fortune later.

Full disclosure: I own an insignificant amount of stock myself, but I haven’t bought any new Apple stock since I was a part-time employee back in the early ’00s. I’d say THAT was a good time to “take advantage of a potential share weakness”, considering I bought that stock at $8, and it split a few times since then on its way to the current $300+. If only I had had thousands, instead of tens, of dollars to invest back then. Still, while it’s not going to help me retire early, I’m holding on to it for a while. Might buy a few books for my kid’s first year in college.

> The iPad’s aggressive pricing has made it hard for rival tablet makers to compete, giving Apple a significant early lead in the market. > > “Our potential competitors [in tablets] are having a tough time coming close to iPad’s pricing,” Apple CEO Steve Jobs said. “iPad incorporates everything we’ve learned about building high value products. We create our own A4 chip, software, battery chemistry, enclosure, everything. This results in an incredible product at a great price. The proof will be in the pricing of our competitors’ products, which will offer less for more.” > > For their part, analysts were optimistic about Apple’s gross margins leading up to the September quarter, citing growing sales of the iPhone as an upside to the iPad’s lower margins. In August, Gleacher & Co. analyst Brian Marshall [stated his belief](http://www.appleinsider.com/articles/10/08/23/apples_gross_margins_expected_to_improve_as_iphone_4_antennagate_ends.html) that Apple’s gross margin profile is in the process of bottoming. *AppleInsider* contributor Andy Zaky had [predicted](http://www.appleinsider.com/articles/10/10/18/apple_q4_2010_earnings_preview.html) a Q4 2010 gross margin of 38 percent. The strategy is clear: Apple is trying to be as cost-competitive as possible, and thus isn’t making as much profit on each sale as it traditionally does. This is the key strategy to keeping the lead in the Tablet market. The low cost of the iPad is making it next to impossible for anyone else to get a foothold. Competitors are being forced to offer smaller, less capable devices for more money, or subsidized with a contract.

Meanwhile, Apple still makes money on every iPad sold, just not as much as they do on a Mac, say.

Still, this is a new thing for Apple, taking less money and selling in higher volume, so Apple is warning Wall Street about this change in general strategy up front. But that won’t stop Wall Street from losing its mind next time the quarterly earnings announcement comes along.

The sky is falling! Apple made more money than ever, but the profit margin is down. Run for your lives!

Contrast this to Microsoft, which makes several products that LOSE money, or Google, who must have lost tons of money on their many failed projects lately, and no one bats an eye.

I’m never going to understand Wall Street.