'Amazing' demand for iPad 2 seen as 'insurmountable lead' for Apple
Apple on Monday commented that demand for the iPad 2 at launch was "amazing," though the company declined to reveal actual sales figures. But with the device sold out virtually everywhere, one Wall Street analyst declared that Apple now has an "insurmountable lead" in the tablet market.
Apple: 'Amazing' demand for iPad 2
"Demand for the next generation iPad 2 has been amazing," Apple spokeswoman Trudy Muller told The Loop. "We are working hard to get iPad 2 into the hands of every customer who wants one as quickly as possible."
Though Apple has not revealed initial sales for the iPad 2, most locations were completely sold out by Saturday. Sales predictions have ranged from about 500,000 to as high as one million, a number that will be determined by how many units Apple was able to supply for last Friday's launch.
Deutsche Bank: Apple's lead 'insurmountable'
Analyst Chris Whitmore with Deutsche Bank said in a note to investors on Monday that he sees the blockbuster start for the iPad 2 as evidence that Apple has earned an "insurmountable lead" in the tablet market, leaving competitors in the dust.
"We believe the combination of its robust ecosystem, massive App catalog, broad carrier support, industry-leading hardware performance and its price-performance advantage creates an unmatched value for consumers in this segment," he wrote.
Whitmore conducted a survey of 100 stores, including 50 Apple retail locations, 20 Best Buy and Walmart stores, and a handful of AT&T and Verizon stores. He found a complete 100 percent stock-out of the iPad 2 at all locations polled.
The analyst said the strong start for the iPad 2 suggests his estimate of 30 million iPad sales in 2011 is "very conservative." Apple sold about 15 million of the first-generation iPad in all of 2010.
J.P. Morgan: iPad 'wannabes' must 'rethink' their tablet plans
Analyst Mark Moskowitz with J.P. Morgan also sent out a note to investors Monday in reaction to the iPad 2 launch. He believes the early success of the iPad 2 is a sign of a "global tablet bubble."
"There are many competitive tablet entrants expected, but so far, we think that both Samsung and Motorola have experienced disappointing adoption curves," he said. "We expect more of the same from other entrants.
"Meanwhile, Apple's iPad 2 technical and form factor improvements, coupled with opening weekend stock-outs, point to a widening gap in market share ownership potential."
Moskowitz expects Apple to control at least 61 percent of unit sales in the tablet market in 2011. He noted that number could go higher, given the momentum the iPad 2 saw in its debut over the weekend.
Ticonderoga Securities: 'Consumers have spoken' in favor of iPad 2
Finally, Brian White with Ticonderoga Securities issued a response to the iPad 2 launch, declaring that tablet competitors to the iPad 2 have even more of an uphill battle after Apple's tablet launched last week.
"For tablet competitors," he wrote, "we believe consumers have spoken, and life just got a lot tougher if you plan to compete with the iPad 2."
White and his team conducted field checks with stores over the weekend, and also found that every store, including Apple retail locations, were completely out of iPad 2 stock. He said the iPad 2 launch was much stronger than most likely expected, and he reiterated his prediction that first-weekend sales could reach 1 million.
"Clearly, we believe the demand was there to exceed our target," he said. "However, the question now becomes was there adequate supply."
Apple: 'Amazing' demand for iPad 2
"Demand for the next generation iPad 2 has been amazing," Apple spokeswoman Trudy Muller told The Loop. "We are working hard to get iPad 2 into the hands of every customer who wants one as quickly as possible."
Though Apple has not revealed initial sales for the iPad 2, most locations were completely sold out by Saturday. Sales predictions have ranged from about 500,000 to as high as one million, a number that will be determined by how many units Apple was able to supply for last Friday's launch.
Deutsche Bank: Apple's lead 'insurmountable'
Analyst Chris Whitmore with Deutsche Bank said in a note to investors on Monday that he sees the blockbuster start for the iPad 2 as evidence that Apple has earned an "insurmountable lead" in the tablet market, leaving competitors in the dust.
"We believe the combination of its robust ecosystem, massive App catalog, broad carrier support, industry-leading hardware performance and its price-performance advantage creates an unmatched value for consumers in this segment," he wrote.
Whitmore conducted a survey of 100 stores, including 50 Apple retail locations, 20 Best Buy and Walmart stores, and a handful of AT&T and Verizon stores. He found a complete 100 percent stock-out of the iPad 2 at all locations polled.
The analyst said the strong start for the iPad 2 suggests his estimate of 30 million iPad sales in 2011 is "very conservative." Apple sold about 15 million of the first-generation iPad in all of 2010.
J.P. Morgan: iPad 'wannabes' must 'rethink' their tablet plans
Analyst Mark Moskowitz with J.P. Morgan also sent out a note to investors Monday in reaction to the iPad 2 launch. He believes the early success of the iPad 2 is a sign of a "global tablet bubble."
"There are many competitive tablet entrants expected, but so far, we think that both Samsung and Motorola have experienced disappointing adoption curves," he said. "We expect more of the same from other entrants.
"Meanwhile, Apple's iPad 2 technical and form factor improvements, coupled with opening weekend stock-outs, point to a widening gap in market share ownership potential."
Moskowitz expects Apple to control at least 61 percent of unit sales in the tablet market in 2011. He noted that number could go higher, given the momentum the iPad 2 saw in its debut over the weekend.
Ticonderoga Securities: 'Consumers have spoken' in favor of iPad 2
Finally, Brian White with Ticonderoga Securities issued a response to the iPad 2 launch, declaring that tablet competitors to the iPad 2 have even more of an uphill battle after Apple's tablet launched last week.
"For tablet competitors," he wrote, "we believe consumers have spoken, and life just got a lot tougher if you plan to compete with the iPad 2."
White and his team conducted field checks with stores over the weekend, and also found that every store, including Apple retail locations, were completely out of iPad 2 stock. He said the iPad 2 launch was much stronger than most likely expected, and he reiterated his prediction that first-weekend sales could reach 1 million.
"Clearly, we believe the demand was there to exceed our target," he said. "However, the question now becomes was there adequate supply."
Comments
Just as Apple haters focused on the Macs and PCs even long after Jobs conceded that battle and Apple was dominating the music market, I won't be surprised if they ignore the iPad's success and keep pointing out Android's marketshare over the iPhone (as if it were a failure!). You'd think that with such massive marketshare, all the developers would have migrated from the App Store by now; they must all be fanboys drinking the Kool-Aid!
A: All of them.
The question is really how many Apple has been able to manufacture to date, not how much demand there was.
AAPL 400 .... soon!
Lets hope so. I'm still recovering from last week's drubbing in AAPL.
I hope that the iPad is sold out/delayed because of incredible demand, not because of insufficient supply.
I wouldn't be surprised if the iPad ends up with a greater percentage of the tablet market than the iPod does of the PMP market. Like the iPod, it's not a necessity whereas phones are, so people won't settle for cheap knockoffs just because they have to, not to mention that the cheap knockoffs are absolute junk and even the expensive ones are pretty bad in quality whereas some of those Android phones seem pretty good (though not built as well as iPhones, of course).
Just as Apple haters focused on the Macs and PCs even long after Jobs conceded that battle and Apple was dominating the music market, I won't be surprised if they ignore the iPad's success and keep pointing out Android's marketshare over the iPhone (as if it were a failure!). You'd think that with such massive marketshare, all the developers would have migrated from the App Store by now; they must all be fanboys drinking the Kool-Aid!
While watching the iPad 2 event I wondered why Apple was making so many digs at the competition. I said to myself, ?they already own the market they would easily have the majority of the profit and will easily take ⅓ to ½ of the profits, like with the iPhone.?
But I don?t think I was thinking big enough. I think Apple wants this to the iPod all over again. A ?natural monopoly.? They will surely make the iPad the 2nd most profitable segment of their business this year, but if they can make this another iPod in terms of marketshare despite growth it could be Apple?s most profitable segment in a few years.
I wouldn't be surprised if the iPad ends up with a greater percentage of the tablet market than the iPod does of the PMP market. Like the iPod, it's not a necessity whereas phones are, so people won't settle for cheap knockoffs just because they have to, not to mention that the cheap knockoffs are absolute junk and even the expensive ones are pretty bad in quality whereas some of those Android phones seem pretty good (though not built as well as iPhones, of course).
That's a very good point. Even if someone manages to come up with a tablet that is cheaper than iPad (like has happened with alternatives to iPhones), people are more likely to wait a while longer to save the money they need to buy iPad.
Lets hope so. I'm still recovering from last week's drubbing in AAPL.
I hope that the iPad is sold out/delayed because of incredible demand, not because of insufficient supply.
That's kind of a front hand/back hand thing. If they sold out because of incredible demand, that would mean they had insufficient supply. I do know what you mean though.
I've related my own experience with this Friday. 14th st Apple store in NYC. Line from 9th Ave to 10th Ave, a long block. Then up to 18th st. Someone on one of the threads here was on the same line, and said it extended to 24th st, but I can't verify that.
We're talking about a good thousand people, likely a good number more. Though the 5th Ave store gets all the publicity.
Man, if I believe that, I should go buy more stock right now, shouldn't I?
Lets hope so. I'm still recovering from last week's drubbing in AAPL.
I hope that the iPad is sold out/delayed because of incredible demand, not because of insufficient supply.
How does the non-business geek invest in tech stocks? Is it simple as going to a website? What should I look out for and how much cash is reasonable to invest in a stock like Apple and still consider it disposable? I mean, for the investment to be worth it how many shares would I have to look at buying?
That's a very good point. Even if someone manages to come up with a tablet that is cheaper than iPad (like has happened with alternatives to iPhones), people are more likely to wait a while longer to save the money they need to buy iPad.
A lot of it depends on the apps, where Apple wins for now at least. It also depends on the performance. How well does it run those apps? Apple wins there as well for now.
I think that it's interesting that with all the talk about the Tegra 2, when all is said and done, Apple's A5, which includes the Imagination GPU, beats it hands down. That's got to be discouraging, because now Motorola and others using that chip can't say their performance is better. And what else do they have?
Cheap tablets will perform badly, and will have problems running more sophisticated games and apps. But people will buy a $250 tablet anyway, because of the price. Some will be happy, and others won't be. My daughter's friend, who, like my daughter, is a photography major, was bought a cheap, no name brand Android tablet for Christmas. She asked me if it would run the pro photo apps out there that are available for the iPad. I said no. She asked if they ever would. I told her it wasn't likely in the near future at least. She wasn't happy.
Q: How many iPad 2's did Apple sell opening weekend?
A: All of them.
The question is really how many Apple has been able to manufacture to date, not how much demand there was.
+1
An Apple Investor (me) wants every store to be sold out at closing, and fully stocked by the next day. wash. rinse, repeat.
I think the key post iPad 2 story will be is laptop cannibalization.... I see growth in laptops to drop 50%. Everyone that needs one has one, and all those people who have one don't need another one.
Samsung, Motorola, BB... they aren't fighting for 2nd place, they're fighting for marketplace relevancy.
This will be a world of home based computing (mac mini's and what ever Dell/Acer/HP/sony sell), and portable computing (Hi End = SSD based laptops, Mid= 'personal internet devices', LE = 'personal comm devices' [aka smarter_than_featurephones]), and home infrastructure (TimeCapsule, AppleTV, Airport Express, free Lion Server OS, airplay and airprint)
Apple is the only company that seems to have leadership/growth/dominance/convergance across all those lines.
Moskowitz expects Apple to control at least 61 percent of unit sales in the tablet market in 2011.
He thinks competing tablets will capture 39% of the market in 2011? Unlikely. I would be amazed if copycats even acheived 5% of the market.
Massive lead? Yes. Insurmountable? No.
Agreed. When cheap Android tablets start to undercut the iPad, then the market share will get eroded and margins compressed. That's just the way it goes.
How does the non-business geek invest in tech stocks? Is it simple as going to a website? What should I look out for and how much cash is reasonable to invest in a stock like Apple and still consider it disposable? I mean, for the investment to be worth it how many shares would I have to look at buying?
The answers to those questions vary from person to person. One way to invest in an industry is to invest in the leading companies, the cream of the crop. Go to CNN Money online, and open a free account. Join The Motley Fool, also free. Make up lists of stocks you're interested in and track them. You will be able to see stock performance over years, look up financial information, etc. Read the free articles and reports to get some idea of what the thinking is out there, but don't take any one of them too seriously. Remember that past performance doesn't guarantee future performance.
There's a lot more detail I could give you here, but it's a start. I'm heavily invested in Apple, and I'm long, meaning that I'm holding it for at least a year, in my case several years. If I have the cash on hand, I buy more during a downturn, and don't sell when things move upwards.
How much cash can you afford to lose? That's a criterion. If it's $5,000, and you pay attention to what you're doing, then you can invest $15,000, because you would be able to abandon your position before losing a third. That's one way of looking at it.
I am assuming they haven't yet sold a million, or they would have replaced "amazing" with 1 million in Trudy's press release.
There's still the remainder of the week to announce a 1M figure, but I doubt they were able to make that many.