Hype day is tomorrow.

Because I am both a user and an investor, Apple products interest me. Tomorrow, Steve Jobs will ladle additional hype on what is already the most over-hyped product since the iPhone.

I believe that the iSlate tablet will be a technological tour de force …. and a near-term commercial failure.

iSlate – artist’s impression

But first, let me pitch in my 3 cents’ worth (50% more valuable than the average out there, but still largely worthless) and guess at the tech specs. Much of this is pretty obvious based on leaks from suppliers. Either way, you can check me against tomorrow’s hyperama:

Hardware: 

• 10.1″ glossy, diagonal touchscreen
• ARM 1gHz low power consumption CPU
• 6 hr (10 hr in JobsSpeak) flat, non-user changeable battery
• 2.5mm standard headphone jack
• Crappy built-in speakers (“Greatest sound since Carnegie Hall” – SJ)
• Virtual keyboard with vibration touch feedback
• 64gB SSD (“Huge” – SJ)
• SDXC slot card reader
• iPhone socket, no USB sockets, to preserve connectivity premium
• Aluminum rear case
• Appearance like a large iPhone (“A design revolution” – SJ)
• Fragile glass screen which will break as soon as you look at it (“Titanium tough” – SJ)
• Broadcomm multi-carrier processor (VZ/TMO/T) for 3G
• 802/11n (let’s hope) wifi
• No Bluetooth
• Universal remote capability
• Under 2 lbs with charger (“Weightless” – SJ)

  Software:

• iPhone OS, not OS X
• iWork and iLife adapted to touch technology
• iTunes integrated to include books, magazines, enhanced games and newspapers
• Lightroom Touch (just kidding – it will take sleepy Adobe 2 years)

After the hype dies down, however, I believe the device will be a near-term commercial failure. There are a couple of reasons. First, I believe Apple will not include Bluetooth, making it impossible to use an external keyboard. To do otherwise would be to cannibalize their laptop offerings. So long term typing will be impossible on a flat, virtual keyboard, just like on the iPhone.

But the biggest cause of failure will be the price. Apple enjoys fabulously high profit margins on its costly hardware and cannot afford to sacrifice those or the stock, already priced for perfection, falls out of bed. So add up the component prices and you get $999 at a 35-40% margin. Absent the rabid fans, who in his right mind, in an economy headed for the toilet (or going deeper into the toilet, if you prefer) is going to blow a big one on a device like this when he already has an iPhone/Touch and a MacBook? Sure, give me Bluetooth and this is the perfect replacement for my netbook. But I simply don’t Bluetooth happening for reasons explained above.

Fine, so there will be two versions, like with the iPhone/Touch. The $999 wifi only one and a $599 one with 3G and a carrier subsidy. Now that carrier will charge the user $50-60 monthly for the 3G connection, so now your $600 toy has suddenly cost you over $2000. And you want yet another monthly bill in our post-Armageddon economy?

So my guess is that the technology in the device will be wonderful and, as the introduction will include promises that books etc. will be available through iTunes (content is King), near term hype will push Apple’s stock along and the fans will line up come the July availability date. But I fail to see how Apple will sell many of these in this economy at $999.

In a year or two the price will drop significantly, content will have grown, the fragile screen and bad code and overheating issues and carrier bottlenecks will have been addressed and Bluetooth will be added. Then it will start making serious money and the laptop computer as we know it will become a tablet device.

Disclosure: Long AAPL call options.