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Despite Denial, iPad Production Numbers Look LowBy Richard Koman
Posted: March 4, 2010 11:13am PST
Despite an analyst's report that Apple is experiencing production delays on the iPad, which is supposed to hit stores at the end of March, Apple's Taiwanese supplier insists production is on track to deliver 600,000 to 700,000 iPads and another million in April.
Canaccord Adams analyst Peter Misek said earlier this week that iPad production could be limited to 300,000 in March and 800,000 in April. He also suggested Apple could limit the initial launch to the United States and even delay the product launch a month because of the production delays.
Technology site DigiTimes, however, reported that Foxconn Electronics, the Taiwanese manufacturer of the iPad, and its component manufacturers are on schedule to meet the targets for March and April, and said the launch will not be delayed.
On the other hand, analyst Vijay Rakesh of ThinkEquity said in a research note that checks indicate production is running slower than expected. "The manufacturing of the iPads was supposed to pick up in February, but volumes in March are still low," Rakesh wrote. "But checks are indicating iPad volumes will pick back up to the 800,000-1 million units/month [range] into April-May from the current 200-250K. We believe this is just a minor hiccup in a longer-term entirely new revenue stream and product road map for AAPL."
March 26 'Likely' Launch Date
Those numbers align with Misek's estimate of 300,000 in the late March time frame and 800,000 in April. Rakesh said the delays are not related to glass or manufacturing processes. Tim Bajarin, principal analyst for Creative Strategies, said the analysts' numbers are "reasonable."
Shortage or not, there is "already strong pent-up demand for this product from early adopters," Bajarin said. "This will drive the first wave of sales. Our estimate is that Apple will sell at least two million iPads in 2010, with the bulk of them sold during the fourth quarter."
Meanwhile, The San Francisco Examiner reported the actual release date for the iPad has not been set yet, but March 26 is "very likely." The Examiner also said Apple Store employees are expected to get their hands on the device March 10, according to "inside sources" and a southern California Apple Store manager.
In other rumors, the initial run of iPads will be the Wi-Fi models, with 3G models not available until April or May, and commercials will start running March 15, pushing the e-reader capabilities. Apple fanboys camping out in front of flagship Apple Stores may receive a "special gift," the Examiner said.
WSJ's iPad Under Lock and Key
One person who has apparently seen the iPad is Rupert Murdoch, chairman of News Corp., which owns The Wall Street Journal. According to media reports, Murdoch is letting it be known that there is an iPad in the Journal's building.
Murdoch says the Journal is working on porting its content to the device in time for the launch. "In fact, we've been allowed to work on one, and it's under padlock and key," Murdoch told the Real Estate Board of New York. The key is turned by Apple every night, he said, "But we will be on that with The Wall Street Journal."
Penguin Books is another publisher excited about the iPad. While it will not be ready for the late-March launch, Penguin is aggressively converting children's books into interactive iPad applications. "The iPad represents the first real opportunity to create a paid distribution model that will be attractive to consumers," Penguin CEO John Makinson told the Financial Times' Digital Media & Broadcasting Conference.
Aside from a few "marquis apps" at launch, like the Journal and The New York Times, Bajarin expects it won't be until June that a wave of apps optimized for the iPad appear. "Remember, the development community only got the (software development kit) in late January," he pointed out.
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