Apple's iPad: Will it sell?

The new device will fly off shelves, say some analysts; others think sales will build slowly

Apple's iPad will fly out of stores when it goes on sale in four weeks, and will build momentum through the back-to-school and into the holiday selling seasons, analysts said today.

"I expect a surge going out the door," said Ezra Gottheil of Technology Business Research. "There's a group of Apple advocates that will queue up no matter what. Apple has the most effective branding in the industry, and these people think of themselves as acolytes, they do think of themselves as the 'Mac' in Apple's 'I'm a Mac' ads."

On Friday, Apple announced that the iPad will go on sale April 3 , and that it would begin taking pre-orders for the device, which is priced starting at $499, on March 12.

That news had been preceded by reports citing Peter Misek, an analyst with Canaccord Adams, who said iPad production problems would limit the number of units available at launch to just 300,000, considerably less than the 1 million many had anticipated.

Wall Street analyst Brian Marshall of BroadPoint AmTech leaned toward inventory shortages as well, and said that such news might pressure consumers to line up for Apple's new device. "They're definitely going to sell out in a matter of hours," he said of the iPad's debut.

Gottheil echoed Marshall. "I do expect there will be some constraints on supply," he said. "Apple had inventory problems before with both the iPhone 3G and the 3GS. It's not the same -- everyone needs a phone -- but there's not an unlimited supply of touch screens."

It took Apple about six weeks to fully stock its stores with the iPhone 3G in 2008. The company had similar problems keeping up with demand for the iPhone 3GS a year later.

Once the initial rush is over -- which will likely continue through the launch of the 3G-equipped iPad a month or so after the WiFi-only model on April 3 -- sales will drop off until the back-to-school run in mid-to-late summer, said Gottheil. "I see a lot of upside for the iPad during the year, with strong sales in the back-to-school quarter. And it will be a very attractive holiday product."

Survey data seems to back up Gottheil's sales projection. According to ChangeWave Research, which polled more than 3,100 U.S. consumers in the first half of February -- days after Apple CEO Steve Jobs unveiled the iPad -- sales of the iPad will gain momentum for at least six months after launch.

Of the people polled who said that they are likely to buy an iPad, only 6% said they would put down their money in the first week after its release. That number climbed to 20% for two to three months after launch, and 23% for the four-to-six month period.

Paul Carton, ChangeWave's research director, cited the low number who said they would immediately buy an iPad to challenge the thinking of analysts like Gottheil and Marshall. "I don't think you'll see in the first weeks people pounding down the doors," he said. "It will take off slower, and build."

Starting on Friday, Apple's U.S. online store will accept pre-orders for both the WiFi-only and the WiFi+3G models. Apple's retail stores, however, will reserve only the WiFi iPad for pick-up on Saturday, April 3. The iPad will be available in late April in Australia, Canada, France, Germany, Italy, Japan, Spain, Switzerland and the U.K., Apple said last week.

Prices for those markets won't be announced until next month.

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Gregg Keizer

Gregg Keizer

Computerworld (US)
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