April 5 (Bloomberg) -- Apple Inc. probably sold more than twice as many iPads in its debut weekend as some analysts estimated, an early sign that Chief Executive Officer Steve Jobs may succeed at reviving demand for tablet-style computers.
The iPad’s initial sales may have reached 700,000 units, Piper Jaffray & Co.’s Gene Munster said in an interview yesterday. The Minneapolis-based analyst had predicted sales of 200,000 to 300,000, while Sanford C. Bernstein & Co.’s Toni Sacconaghi had projected 300,000 to 400,000. JPMorgan Chase & Co.’s Mark Moskowitz estimated 825,000 in the quarter to June.
The device went on sale April 3, drawing crowds to stores across the U.S. and rivaling the frenzy seen when the iPhone was introduced in 2007. Lines at five stores surveyed by Piper Jaffray were longer than expected, yet Apple had iPads available late in the opening day, signaling the company was able to produce enough devices to fulfill initial demand, Munster said.
“Sales held relatively steady during the day,” said Munster, who bought a $499, 16-gigabyte model for himself. “I have high expectations.”
The iPad is Apple’s bid to turn tablet computers into popular consumer devices, something rivals such as Microsoft Corp. have failed to do. The product builds on the success of Apple’s iPhone and iPod, staking out the middle ground between smartphones and laptop computers. Apple is betting the design is enticing enough that consumers are willing to pay a premium over low-cost notebooks. It starts at $499.
‘Unique, Sexier’
“It’s ridiculously expensive, way overpriced,” said Josh Klenert, a 36-year-old graphic designer, who still went ahead and bought one. “You may call it a dumb computer or a smart telephone --it’s in between. It’s a unique, sexier device.”
Klenert, whose one-bedroom apartment in Tribeca has “more Macs than people,” pre-ordered the iPad as soon as it was available and came down to Apple’s SoHo store in New York to be one of the first to buy it. He plans to use it for reading newspapers and magazines.
Hundreds of shoppers lined up to wait for stores to open, though crowds didn’t camp out for days this time, as they did when the iPhone debuted. Many of the buyers identified themselves as early adopters and Apple enthusiasts, making it harder to tell if the iPad will win over mainstream customers.
“I love it,” said Jacob Arentoft, a 37-year-old digital business developer from Copenhagen. After exiting Apple’s Fifth Avenue store in Manhattan, he unpacked the brand-new silver gadget and waved it at the crowd. “The size fits, the design fits, everything fits.”
Positive Reviews
Jobs made an opening-day appearance at his hometown store in Palo Alto, California, chatting with shoppers. Apple retail chief Ron Johnson was at the Fifth Avenue store and addressed employees before it opened.
Users can surf the Internet, peruse digital books, watch video and play games on the iPad. What it lacks is a built-in camera or support for Adobe Systems Inc.’s Flash software, which runs much of the video on the Web. The device also doesn’t let users carry out multiple tasks at once.
The iPad’s first wave of reviews praised its ability to deliver digital books and video quickly, saying it measures up well against other devices, including Amazon.com Inc.’s Kindle e-book reader. Bloomberg columnist Rich Jaroslovsky said it may change the way people relate to computers, requiring users to learn a “new language” that Apple has made “both elegant and very easy to master.” USA Today’s Edward Baig called the iPad “fun, simple, stunning to look at and blazingly fast.”
TV Shows
Tablets have been available in one form or another since the 1990s, without ever catching on. They account for less than 1 percent of the personal-computer market, according to research firm Gartner Inc.
The iPad’s success will depend partly on the attractiveness of applications that run on it. CBS Corp., the most-watched U.S. TV network, announced plans last week to offer episodes of shows such as “Survivor” and “CSI” on the iPad. Walt Disney Co. will release iPad applications for ABC shows and ESPN games. And Netflix Inc., the movie-rental company, will let subscribers watch programming streamed to the iPad.
Apple, which has more than doubled in the past year, rose 97 cents to close at a record $235.97 April 1 in Nasdaq Stock Market trading. U.S. markets were closed April 2 for the Good Friday holiday.
Like the iPhone, the iPad will test Apple’s ability to conquer new markets. Since returning to the company in 1997, Jobs revived the Macintosh computer business, reshaped digital music with the iPod and pushed Apple into the mobile-phone field. Adding those products propelled revenue and profit to record levels.
Sales Estimates
When the iPhone debuted, Apple struggled to keep it in stock. Most of its stores quickly sold out, and resellers on EBay and Craigslist hawked the device to desperate shoppers for as much as $12,000. Apple sold about 270,000 iPhones in its 2007 debut weekend.
Apple may sell about 5 million iPads in the first 12 months, compared with 6.1 million iPhones in its first year on the market, according to Sacconaghi. JPMorgan’s Moskowitz forecast annual sales will reach 4.8 million, the San Francisco-based analyst wrote in a report today. Researcher ISuppli Corp. says full-year sales may reach 7.1 million globally.
Apple declined to comment, said Natalie Kerris, a spokeswoman for the Cupertino, California-based company.
At the outset, iPads will connect to the Web through localized hot spots that use Wi-Fi technology. Some shoppers may wait for a version with 3G, which lets the iPad connect to mobile-phone networks. It’s due later this month.
Luis Martinez, a 30-year-old from Brooklyn who repairs computers, bought a Wi-Fi iPad on April 3 and already put in an order for the 3G version.
“People who criticize iPad are basically saying it doesn’t fit their lifestyle. It fits mine,” Martinez said. “Overall, I’m sold.”
--With assistance from Amy Thomson in Southern Pines, North Carolina; Mina Kawai, Arik Hesseldahl and Joe Sabo in New York; Katie Hoffmann in St. Louis; Dan Hart in Washington, Harriet Mankoff in Palo Alto, California; Marc Perrier in San Francisco; and Pavel Alpeyev in Tokyo. Editors: Nick Turner, Ville Heiskanen
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