iPad Set to Storm Stores on April 3
(Reuters) - Apple Inc said the first iPads will be in U.S. stores on April 3 and hit nine international markets later in the month, easing concerns that manufacturing constraints could delay launch.
The news sent shares of Apple surging as much as 4.3 percent to an all-time high of $219.70 on the Nasdaq, as analysts said the speedy international rollout could help build sales momentum.
The 9.7-inch touchscreen iPad, which is designed to surf the Web, play video and games, and read digital books, is the most anticipated product launch from Apple since the iPhone in 2007.
Chief Executive Steve Jobs unveiled the tablet in late January, but the company did not announce any international markets until Friday, when it said the tablet will go on sale in Australia, Canada, France, Germany, Italy, Japan, Spain, Switzerland and the UK in late April.
"I think it eases concerns that were circulating about supply. There's always so much speculation around a launch, and this alleviates those fears," said Cross Research analyst Shannon Cross, adding that the breadth of the international launch should reassure investors.
Cross expects the iPad to be a major growth driver for Apple eventually. She estimates the company will sell 4 million to 5 million units in the first year, which will add $1 to earnings per share.
The April 3 launch date means Apple won't likely book any iPad revenue in the current fiscal second quarter, which closes at the end of March. Nonetheless, Barclay's analyst Ben Reitzes said the launch plans added some "welcome clarity."
"Not only is the device available April 3 in the U.S., but we believe availability in nine other countries by the end of April is likely quicker than many thought, lending potential upside to consensus estimates into mid year," he wrote in a research note.
Analysts are currently forecasting Apple's fiscal 2010 earnings per share at $11.62, according to Thomson Reuters I/B/E/S, up from $9.08 last year.
There has been some debate on how successful the much-hyped iPad really will be. While most agree that the device is well-designed and appealing to consumers, some analysts are not convinced there is a big market for tablet computers.
The iPad will have to compete for consumer attention with a myriad of established devices, including smartphones, netbooks and dedicated e-readers like Amazon.com Inc's Kindle.
Apple said that an iBooks application for the iPad -- which will compete with the Kindle -- would be available as a free download on April 3.
A BIT LATER THAN EXPECTED
The U.S. launch date for the iPad model with short-range Wi-Fi wireless links, starting at a price tag of $499, is slightly later than the previously expected late March launch.
Oppenheimer & Co analyst Yair Reiner said there were some supply constraints around the iPad, which was not unusual for a major product launch. But he said that would not be an issue in the long run.
"I think supply constraints can have some short-term impact in the first quarter, obfuscating the true demand around launch time, but the longer term is more important," he said.
Customers looking for versions of the iPad with third-generation (3G) high-speed cellular data links will have to wait until late April, said Apple.
AT&T Inc, the exclusive U.S. carrier for the iPhone, will provide wireless connections for the iPad. But AT&T's top executive said earlier this week that he expects consumers to mostly use Wi-Fi to connect the iPad.
Beginning March 12, U.S. consumers will be able to go to Apple's website to preorder both the Wi-Fi-only model and the version with 3G and Wi-Fi, or reserve a device to pick up at a store on April 3.
Research firm iSuppli estimated the total materials costs for each device is $219.35, with a $10 manufacturing cost.
(Reporting by Gabriel Madway and Sinead Carew; Editing by Gerald E. McCormick, Steve Orlofsky and Matthew Lewis)