Wall Street Gets It: It’s Way Too Early to Vote on the iPad

Wall Street had the right idea yesterday. At least when it came to the Apple iPad: Investors watched the unveiling, shrugged their shoulders and left Apple shares more or less unchanged.

That’s a pretty reasonable approach, since it’s impossible to gauge the gadget’s chances based on Steve Jobs’s demo yesterday. As Walt Mossberg notes, it really is all about the software. And a lot of the iPad’s software doesn’t exist yet.

Now that Apple (AAPL) has shown off the device to the world, developers can start working on great software in earnest. But my hunch is that if we are going to see really impressive stuff, it won’t be ready when the first iPads start shipping this spring.

That’s partly because you almost never see really innovative software for new devices out of the gate. Developers need time to dream up things you can do with the new hardware, and they need time to see what users want to do with the thing.

But it’s also because the much of the iPad’s performance hinges on what media companies–the people the device was built for, in many ways–end up delivering.

Magazine executives, for instance, have big plans for the iPad. But those plans include charging customers more for a subscription than the $10 to $12 a year most people pay for magazines. If so, they’re going to have to come up with some pretty extraordinary stuff–not just swapping print for pixels, as Condé Nast’s GQ app does.

Similarly, book publishers want to charge you more to read a digital tome on the iPad than you do on Amazon’s (AMZN) Kindle. That’s going to require something special, too.

Meanwhile, Apple’s plans to shake up the TV business via a subscription offering and perhaps do the same to music with a streaming offering aren’t supposed to be tethered to the iPad specifically. But if they do materialize, they’ll certainly make the gadget that much more attractive.

Steve Jobs, whom you can never accuse of underselling, says the iPad is a “magical and revolutionary device.” But that’s only going to be true if people who don’t work for Apple dream up some magical and revolutionary software. Give them a little time to deliver before you render a verdict–as Wall Street has.