Continued lines for Apple's iPad 2 create 'shock and awe,' sales forecasts surge

Posted:
in iPad edited January 2014
More than two weeks after the iPad 2 went on sale in the U.S., lines continue to form at Apple stores around the country as new shipments arrive, prompting one Wall Street analyst to significantly increase his forecast for 2011 shipments.



Analyst Charlie Wolf with Needham & Company issued a new note to investors on Tuesday entitled "AAPL: Shock and Awe!" In it, Wolf reveals he has increased his projected iPad sales for 2011 by 10 million, to a total of 30 million.



Wolf has also increased his prediction for 2012 iPad sales by 10 million, totaling 40 million next year. These changes amount to an earnings per share estimate increase of $1 in 2011 to $23.25, while he sees Apple earning $27.35 EPS in 2012.



"Attempting to forecast the growth trajectory of a new category of computers is difficult, if not perilous," Wolf wrote. "However, the launch of the iPad 2 so far exceeded our expectations that it was evident our 2011 and 2012 shipment forecasts were dramatically low."



He said that hopeful competitors to the iPad have missed the point: the device's success is tied to its software, not the hardware. But competing devices, like those running Android Honeycomb, don't offer enough applications to entice most users.



"In our view, Android's problems go beyond the dearth of applications," he said. "The Honeycomb interface itself appears overly complex for the purpose it was intended -- an intuitive, easy-to-use platform for running applications written for Android."



Wolf noted that there is a "robust gray market" for the iPad 2, as lines for the device continue to form across the U.S. He sees this as a sign that the biggest opportunity for Apple with the iPad may be in China.



Lending support to Wolf's conclusions regarding the gray market, AppleInsider reader Noah sent details and video on Tuesday from the iPad 2 line at Apple's New York City retail store in SoHo. The line of customers reportedly wrapped around Prince Street, north on Greene Street and almost to Houston, while most who were waiting were said to be speaking mostly Mandarin and some Cantonese.



"Ten or so minutes after they allowed the line in, we were told that all of the AT&T versions were sold out," he said in an e-mail. "Some people left grumbling (me included). Ten minutes from them, the same went for all Wifi models. Only Verizon's versions remain."







Apple experienced crushing demand for the iPad 2 at launch in the U.S., and last week's international launch saw similar sellouts across the globe. But there have been signs that availability is improving, with shorter estimated shipping times from Apple's online store, and expanded retail availability at Radio Shack stores starting today.
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Comments

  • Reply 1 of 134
    I wasn't impressed with the web-browsing speed of the iPad 1, so I never bought one.



    However, now that the thing is snappier, I'd be willing to buy one.



    I joined the rest of you in the ranks of the waiting list. I ordered a white 16GB model for my retired parents, who will love using the camera connector. I envision them getting back back to the car from a bird-watching or lighthouse-seeking trip, plugging the camera into their iPad, and using it to view the shots they just took on a bigger screen. And they can also use it to email while they're out and about on their weekend jaunts.



    If even senior citizens love the iPad....yeah, these things will sell like hotcakes.
  • Reply 2 of 134
    tallest skiltallest skil Posts: 43,399member
  • Reply 3 of 134
    poochpooch Posts: 768member
    ... full disclosure.



    charlie "shock and awe" wolf:
    • has a financial interest in AAPL (i.e., he has a long position consisting of common stock).

    • has received compensation based upon various factors, including quality of research, investor client feedback and his company?s overall revenues, which includes investment banking revenues.

    • his company at the time of publication, makes a market in AAPL.

    read the requisite full disclosures on any of his writings.



    i, too, own apple stock and want people to buy, buy, buy.



    but beware the messenger, he is not unbiased.
  • Reply 4 of 134
    Quote:
    Originally Posted by AppleInsider View Post


    ... on Tuesday from the iPad 2 line at Apple's New York City retail store in SoHo. The line of customers reportedly wrapped around Prince Street, north on Greene Street and almost to Houston, while most who were waiting were said to be speaking mostly Mandarin and some Cantonese.



    My GF & I walked past the SoHo Apple Store on iPad2-Day. We were both a surprised that at least 75% of the people in line were Chinese... and it DID wrap around the block. We thought it was a bit weird, since most of the tourists in SoHo are plump middle-Americans.
  • Reply 5 of 134
    boogabooga Posts: 1,080member
    Analysts who increase their estimated iPad shipments based on demand are clueless. Apple will sell 100% of what they make short of a manufacturing miracle. The sole determiner of iPads shipped in 2011 is how many iPads Apple can manufacture in 2011. If they have any observations on supply chains, increased build efficiency, or improved processes, THAT could lead to an increase in 2011 iPad estimates.
  • Reply 6 of 134
    More like 'shock and..... aw.'



    (I am not complaining, though..... )
  • Reply 7 of 134
    Apple created their own Unicorn a spry power buck and they are riding that b**** all the way to the bank. On the other hand Google has caught something. Not a Unicorn but an effing 20 year old mare with a fu***** catenary as a spine.

    Sorry fandroid!
  • Reply 8 of 134
    Don't be fooled. Android will absolutely gain market share. With so many devices coming out, people will flock to them the same they flocked to handsets. People want choice and of course the people who love to heavily tinker will never get an iOS based product. Apple will lose ground and most likey not lead the tablet market in the very near future.



    That doesn't change the fact that the iPad will continue to offer the best experience and best ecosystem. As for me, no tablets for me.
  • Reply 9 of 134
    Quote:
    Originally Posted by Prof. Peabody View Post


    It certainly says a lot about today's society that people use such ridiculous, over-the-top superlatives to talk about even the 2nd Gulf war let alone trivial things like this...



    Gee, sort of like the way people use the word "awesome" to describe everything?

    A new pair of socks...

    Taking a good crap...

    A TV show or pop song...

    You name it, it's "awesome".
  • Reply 10 of 134
    apple ][apple ][ Posts: 8,743member
    Quote:
    Originally Posted by kerryb View Post


    We all know about the devastation in Japan does that mean we are not allowed to get excited about something good that happens here? I donated money to the Red Cross and I did it on my iPad.



    The next person who mentions Japan in a thread that has nothing at all to do with what happened there should be smacked upside the head. I've donated also, and I don't care for any whiners, whining about what other people should do or care about.
  • Reply 11 of 134
    Quote:
    Originally Posted by ghostface147 View Post


    Don't be fooled. Android will absolutely gain market share. With so many devices coming out, people will flock to them the same they flocked to handsets. People want choice and of course the people who love to heavily tinker will never get an iOS based product. Apple will lose ground and most likey not lead the tablet market in the very near future.



    That doesn't change the fact that the iPad will continue to offer the best experience and best ecosystem. As for me, no tablets for me.



    I understand what you're saying and yes, Android tablets will gain market share. They will be pimped out to target at $49.99 for black Friday. No support and poor build quality. As for that tinkering crap you mentioned. Child please! I have a cousin that tinkers with his pc and never gets a damn thing done cause he's always under the hood of a Dell. As for me my macbook never needs tinkering. I turn it on, get my business done, turn it off and live life.

    But if you want to spend your days in your mom's dingy basement trying to trick out a dual core Tegra 2 Xoom by putting in unsupported kernels, knock yourself out.
  • Reply 12 of 134
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by Apple ][ View Post


    Business is definitely war. Apple is most certainly raping the competition! Oops, somebody might be offended by that too.



    Typing this on my rape kit.





    Quote:
    Originally Posted by zachimal View Post


    It will be another phrase with a sinister origin that becomes used in all manner of ways, such as the "rule of thumb."



    The etymology to which I think you refer has no historical evidence to back it up.



    Welcome to the forum.
  • Reply 13 of 134
    charlitunacharlituna Posts: 7,215member
    I would love to be an Apple cheerleader as much as anyone, but in this case I think the analysts are talking out of their 'hats'. Probably because they drove the stock down a little and now they need it to go back up



    These lines are because of stock shorts, nothing more or less. So not really that impressive.



    Now if they had lines and had had lines day after day that went for hours while they were pumping out huge stack of ipads. Even just lines from 9am until late lunch time. THEN folks should be impressed. Because that would mean hundreds of thousands, perhaps even millions, of sales that that is something to crow about



    Some folks are saying "Apple clearly hasn't sold a lot because they haven't released numbers". I disagree. I'm sure they topped a million in the first couple of days. But it seems tacky to crow about hitting 1 million units in say 3 days when there are thousands of folks chasing ipads for now 2 weeks. So it is tactful that they aren't saying anything until that settles down. and while I know that folks are tried of the J word, yes it is more tactful not to crow about fast sales when that was fresh on the worlds mind. Not even Apple can afford negative PR
  • Reply 14 of 134
    gatorguygatorguy Posts: 21,302member
    Wow. You post that iPad2 sales projections are seriously understated from an "analyst" who stands to personally gain both financially and professionally from that advice? Now I'm in shock and awe. The advice may or may not turn out to be on-target. But to post it as a news article to be taken on face value? DED wouldn't accept an article from an any analyst with a Google stake without mentioning it, and he knows who this guy is. Putting an Apple slant on legitimate news is to be expected and perfectly OK (After all, this is Apple Insider). I'd like to think that AI is more than just a fanclub tho. Seems a bit dishonest to promote someone's financial views as news without full-disclosure, particularly since AppleInsider editors like DED also benefit financially if Wolf's views result in higher stock prices.
  • Reply 15 of 134
    apple ][apple ][ Posts: 8,743member
    Quote:
    Originally Posted by ghostface147 View Post


    Don't be fooled. Android will absolutely gain market share. With so many devices coming out, people will flock to them the same they flocked to handsets. People want choice and of course the people who love to heavily tinker will never get an iOS based product. Apple will lose ground and most likey not lead the tablet market in the very near future.



    That doesn't change the fact that the iPad will continue to offer the best experience and best ecosystem. As for me, no tablets for me.



    Android handsets and Android tablets are not the same thing. Retailers are giving away Android handsets for free. Nobody is giving away any Android tablets for free, even the cheap and crappy ones. Many people who buy tablets do not want to be locked to a two year contract like with a cell phone purchase.



    Android has zero chance of leading the tablet market in the "very near future" as you write.
  • Reply 16 of 134
    nvidia2008nvidia2008 Posts: 9,262member
    Australian iPad 2 madness - Fans are "livid"

    http://www.smh.com.au/digital-life/t...329-1cdvx.html
  • Reply 17 of 134
    cgc0202cgc0202 Posts: 624member
    I misinterpreted the lack of lines when I go to the Boylston Apple Store in Boston, the days after the launch. As it turned out, the lines were even before the store opens. Based on the number of shipments made, they just provide the tickets to those already on line, first come-first served basis, until all the shipments have been alloted. This way, peole do not have to waste their time waiting in line, only to be told -- there's no more.



    What would have nice revision of the policy would have been to give those already in line a priority for next or future day delivery. And so on. until all customers who want the iPad are able to get one.



    Or, they could just order online.



    Quote:
    Originally Posted by nvidia2008 View Post


    Australian iPad 2 madness - Fans are "livid"

    http://www.smh.com.au/digital-life/t...329-1cdvx.html





    That's an odd reaction. Would they rather have felt better if Apple launch in Australia whe Apple was sure to meet all demands (which is a nebulous estimate)? That would mean it would never be launched.



    Apple has to maintain a steady production rate based on their projected "annual demand

    taking into consideration that there is a surge during the launch, and during the holiday season



    CGC
  • Reply 18 of 134
    rhyderhyde Posts: 294member
    Quote:
    Originally Posted by ghostface147 View Post


    Don't be fooled. Android will absolutely gain market share.



    Of course it will. When you start at zero and add one, you've gained market share :-).



    Seriously, though, it will be interesting to see if high-end Android tablets repeat the same gains that happened in the high-end smart phone market.



    No doubt, low-end crap will sell well and, when playing the numbers game, Apple will eventually lose its dominant market share to cheap pads. That's like arguing netbooks are the cream of the crop because they outsell MBPs -- what a load of crap that argument is.



    What's impressive is that Apple is making the best all-around tablet right now *and* beating the pants off the competition. Even more amazing is that Apple is one of the least expensive devices out there right now. Someday, the (really) cheap tablets will arrive and all this may change. Then again, at the prices Apple is charging (not too high of a price barrier) maybe most people will save up their pennies and get the device with the good software on it...
  • Reply 19 of 134
    wigginwiggin Posts: 2,265member
    Quote:
    Originally Posted by Booga View Post


    Analysts who increase their estimated iPad shipments based on demand are clueless. Apple will sell 100% of what they make short of a manufacturing miracle. The sole determiner of iPads shipped in 2011 is how many iPads Apple can manufacture in 2011. If they have any observations on supply chains, increased build efficiency, or improved processes, THAT could lead to an increase in 2011 iPad estimates.



    I was thinking the same thing... do we yet have any actual sales figures from Apple? Long lines can mean two things. There is huge demand. Or there is low supply. (Or, obviously, a combination of both.) Unless we have actual numbers, it's hard to reach conclusions. Is there a real supply constraint due to the situation in Japan? Is there a fear of a future supply constraint causing artificially high demand now (especially for the gray market in countries where it's not yet available), sort of a "get it while you can" mentality. Is Apple/Foxconn constraining production to stretch out their component inventories until Japan can get back on it's feet? Why pay workers over time now if you are just going to run out of components in 2-3 weeks?



    From what I've read elsewhere, while there are long lines, it also seems that even Apple's own stores are getting fairly low inventory restocking each day. Suggesting that at least some of the reason for continuging long lines is low supply. But even that could be a result of the large number of retail outlets selling the device, not due to low output from the factories.



    Quote:
    Originally Posted by jeffharris View Post


    Gee, sort of like the way people use the word "awesome" to describe everything?



    Or "magical".
  • Reply 19 of 134
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by JeffDM View Post


    I thought business was a football game, be it American or the real kind. Damn metaphors.



    No, football is like a game of chess.



    (I wonder how long we can keep this going)
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