With the release of the new iPad just around the corner, I want to be the first to get in with this prediction for it:

I have absolutely no idea how the new iPad will perform.

I made exactly the same prediction at the release of the original iPad last year. Since people tend to bury their predictions on tech unless they were right, I thought it would be interesting to go back and revisit what I wrote at the time. Now that the iPad has been around for a year, we actually have a reasonably good idea about how the value network is forming around it, so prediction might be a little easier now.

But I’m still sticking with having no idea…

Here’s last year’s post (there are some really good comments on the original post too, which are worth checking out):

With all the feverish discussion and prognostication about Apple’s preview of the iPad, I want to be the first person online to make this prediction:

I have absolutely no idea how the iPad will perform.

I’ll go one step further – neither does anyone else. The benefit of making predictions right now is that if you happen to end up being right, you can link back to your post in a few years. If you’re wrong, well, who reads blog posts that are a few years old?

One line of argument that I find really interesting, though, is being taken by people who are arguing that the iPad will revolutionise… something. The argument is by analogy – and what a lot of people are saying in response to critics of the iPad is that people hated the iPod and the iPhone when they were released as well. In particular, the initial response to the iPod introduction was pretty universally tepid.

Garry Tan from Posterous has collected a few of these, and this one pretty well sums them up:

I still can’t believe this! All this hype for something so ridiculous! Who cares about an MP3 player? I want something new! I want them to think differently! Why oh why would they do this?! It’s so wrong! It’s so stupid!

Haha! It wasn’t Apple that was stupid – they were stupid! Right?

Well, maybe. It’s easy now to look at the iPod’s 70%+ market share and wonder how anyone could have missed that it was a game-changing innovation. I’ll tell you how. The fact of the matter is that all the people that were skeptical about the iPod as a product innovation when it was introduced were actually completely correct. There wasn’t much there. Take a look at the iPod sales figures from wikipedia:

The first iPod was introduced at the end of 2001, and you can see that sales figures for the first three years were not good at all. By the middle of 2004, the iPod’s market share had been sitting in the 20-30% range for a while. By the end of 2005, that had shot up to over 70%. What happened?

iTunes happened.

Because the iPod and iTunes are so closely interconnected now, it is easy to forget that iTunes didn’t exist for the first years of the iPod. At the time, the iPod was just another mp3 player. The innovation with the iPod was not in the product – it was the innovation in the product’s value network. It was a similar story with the iPhone. And that is why nearly everyone that is yapping about iPad right now is completely missing the point. Because we don’t know what it’s value network is going to look like yet, and this is what will actually determine whether the iPad will take off quickly like the iPhone did, or slowly like the iPod.

Even when you make great products like Apple, your innovations never stand alone. They work within the context of their economic network. The better you understand this, and the more innovative you are in constructing your value networks, the more successful you’re likely to be.

So the next time someone talks to about all the great new features something has, ignore them. Instead, think about the business model and the value network that will support the great new thing.