The Wall Street Journal
First-Day Sales of Apple's iPad Fall Short of Sky-High Hopes
Apple Inc. said it sold more than 300,000 iPads in the U.S. on the first day the device went on sale Saturday, tempering Wall Street's highflying expectations for the much-hyped multimedia tablet computer.
While Apple didn't provide any iPad forecasts, expectations had been building steadily for blowout sales since Chief Executive Steve Jobs unveiled the product in late January. Last month, people familiar with the matter said Apple was seeing strong preorders of the iPad that even exceeded initial sales of the company's previous big hit, the iPhone.
Analysts on average had expected first-day iPad sales of 400,000 to 500,000 units. Some analysts, such as Piper Jaffray analyst Gene Munster, had even higher sales projections of 600,000 to 700,000 units. Estimates for global iPad sales this year ranged from 2.5 million by financial-services firm Kaufman Bros. to as high as 7.1 million by research firm iSuppli Corp.
But though buyers flocked to Apple stores on Saturday in the first hours after the device went on sale, the long lines petered out at many stores by midafternoon. On Monday, some Apple stores reported robust activity. An Apple store in San Francisco said it sold out of its first shipment of iPads on Monday morning, and a small line formed to buy the second shipment that had just arrived.
Some consumers such as Hans Van Der Weive, a property developer from the Netherlands, bought the iPad, which starts at $499, on impulse. "I just arrived here on holiday, I saw the shop and decided to buy one," said Mr. Van Der Weive, adding that he planned to use the device mainly for reading digital books.
People familiar with Apple's thinking said the Cupertino, Calif., company was pleased with the initial sales results. "It feels great to have the iPad launched into the world—it's going to be a game-changer," Mr. Jobs in a prepared statement Monday.
How well the iPad will sell in the long term will likely stay unclear for at least another few quarters. Some of Apple's biggest products have previously had relatively slow starts. The iPhone, which has sold a total of more than 42.5 million units, sold 270,000 units in the first 30 hours of sales when it was launched three years ago. That was almost half of analysts' expectations at the time.
Shares of Apple fell slightly immediately after the company released its first-day iPad sales, but then rose to close up 1.1%, or $2.52, at $238.49 on the Nasdaq Stock Market. "We thought they were very good weekend sales," said Tim Ghriskey, chief investment officer for Solaris Asset Management in New York, which owns Apple shares. "We think it's going to be a very successful product."
Apple also said on Monday that it would hold a special event on Thursday for "a sneak peak" of the next-generation iPhone operating system, which runs on the iPhone, iPod touch and iPad. Apple watchers expect the new operating system to offer new features and more closely integrate iPad functions. A person familiar with the situation said Apple has also been working on creating an advertising service for App Store developers that takes advantage of its acquisition of mobile advertising firm Quattro Wireless last year.
Mr. Jobs has touted the iPad, which looks like a bigger iPhone, as a "magical and revolutionary" device that falls in between a phone and a laptop computer. Apple added features to the iPad like an iBooks digital-book reader and productivity software for tasks like word processing. But analysts and investors say the device's success will depend on the sort of applications that third-party developers create for it.
"The thing to really watch for are killer apps specifically for the iPad that showcase the screen and processing power," said Shaw Wu, an analyst for Kaufman Bros., adding that both the iPod and iPhone became popular because of compelling content. "Some of it is beyond Apple's control."
Apple said people downloaded more than one million applications and 250,000 e-books from iBooks during the first day. Before the iPad's release, there were about 2,500 iPad apps in the App Store, according to ad-exchange network Mobclix Inc. Only a handful of developers were given an actual iPad early, so analysts expect more innovative applications to emerge now that the iPad is in the hands of developers and consumers.
Users have reported a few glitches related to the iPad's Wi-Fi connection and charging, but there otherwise appeared to be no major problems.
While Apple didn't provide any iPad forecasts, expectations had been building steadily for blowout sales since Chief Executive Steve Jobs unveiled the product in late January. Last month, people familiar with the matter said Apple was seeing strong preorders of the iPad that even exceeded initial sales of the company's previous big hit, the iPhone.
Analysts on average had expected first-day iPad sales of 400,000 to 500,000 units. Some analysts, such as Piper Jaffray analyst Gene Munster, had even higher sales projections of 600,000 to 700,000 units. Estimates for global iPad sales this year ranged from 2.5 million by financial-services firm Kaufman Bros. to as high as 7.1 million by research firm iSuppli Corp.
But though buyers flocked to Apple stores on Saturday in the first hours after the device went on sale, the long lines petered out at many stores by midafternoon. On Monday, some Apple stores reported robust activity. An Apple store in San Francisco said it sold out of its first shipment of iPads on Monday morning, and a small line formed to buy the second shipment that had just arrived.
Some consumers such as Hans Van Der Weive, a property developer from the Netherlands, bought the iPad, which starts at $499, on impulse. "I just arrived here on holiday, I saw the shop and decided to buy one," said Mr. Van Der Weive, adding that he planned to use the device mainly for reading digital books.
People familiar with Apple's thinking said the Cupertino, Calif., company was pleased with the initial sales results. "It feels great to have the iPad launched into the world—it's going to be a game-changer," Mr. Jobs in a prepared statement Monday.
How well the iPad will sell in the long term will likely stay unclear for at least another few quarters. Some of Apple's biggest products have previously had relatively slow starts. The iPhone, which has sold a total of more than 42.5 million units, sold 270,000 units in the first 30 hours of sales when it was launched three years ago. That was almost half of analysts' expectations at the time.
Shares of Apple fell slightly immediately after the company released its first-day iPad sales, but then rose to close up 1.1%, or $2.52, at $238.49 on the Nasdaq Stock Market. "We thought they were very good weekend sales," said Tim Ghriskey, chief investment officer for Solaris Asset Management in New York, which owns Apple shares. "We think it's going to be a very successful product."
Apple also said on Monday that it would hold a special event on Thursday for "a sneak peak" of the next-generation iPhone operating system, which runs on the iPhone, iPod touch and iPad. Apple watchers expect the new operating system to offer new features and more closely integrate iPad functions. A person familiar with the situation said Apple has also been working on creating an advertising service for App Store developers that takes advantage of its acquisition of mobile advertising firm Quattro Wireless last year.
Mr. Jobs has touted the iPad, which looks like a bigger iPhone, as a "magical and revolutionary" device that falls in between a phone and a laptop computer. Apple added features to the iPad like an iBooks digital-book reader and productivity software for tasks like word processing. But analysts and investors say the device's success will depend on the sort of applications that third-party developers create for it.
"The thing to really watch for are killer apps specifically for the iPad that showcase the screen and processing power," said Shaw Wu, an analyst for Kaufman Bros., adding that both the iPod and iPhone became popular because of compelling content. "Some of it is beyond Apple's control."
Apple said people downloaded more than one million applications and 250,000 e-books from iBooks during the first day. Before the iPad's release, there were about 2,500 iPad apps in the App Store, according to ad-exchange network Mobclix Inc. Only a handful of developers were given an actual iPad early, so analysts expect more innovative applications to emerge now that the iPad is in the hands of developers and consumers.
Users have reported a few glitches related to the iPad's Wi-Fi connection and charging, but there otherwise appeared to be no major problems.
