Analysts touch up estimates of iPad sales
When it comes to predicting how many iPads Apple Inc. will sell this weekend, Piper Jaffray & Co. analyst Gene Munster has little company among Wall Street analysts in making a guess.
In the weeks before Apple began selling the iPhone in 2007, analysts and technology pundits prognosticated about how many would be snapped up in the first few days. With the iPad, Munster is estimating first weekend sales of 200,000 - a figure some of his rivals say is too difficult to predict.
The sticking point: It's unclear how consumers will respond to the iPad, an untested category of computer that's bigger than a smartphone and less powerful than a laptop. Apple is also offering multiple versions of the device, though only three are available on day one.
"This is a big revolutionary device, but it's a new market," said Katy Huberty at Morgan Stanley in New York. "A lot of potential consumers are still questioning what it may be used for."
Investors look to new products from Apple Chief Executive Officer Steve Jobs to spur sales and profit, which reached a record last quarter on demand for the iPhone and Macintosh computer. Anticipation for the iPad, which goes on sale Saturday, April 3, helped drive Apple stock to an all-time high of $237.19 Tuesday.
Munster, who has recommended buying Apple shares since June 2004, expects iPad sales of 2.8 million in 2010. He's sending analysts to stake out stores in six cities to gauge early demand.
"We'll measure lines and get a pulse of the excitement," Munster said. "If we go to the New York store and there are four people, that's not a good sign."
Apple, based in Cupertino, Calif., started taking early orders for the iPad on March 12, offering consumers the choice between home delivery and in-store collection. That will help the company assess demand and figure out where it needs the most inventory, said Shaw Wu, an analyst at Kaufman Bros. in San Francisco.
"We've seen focus groups and market studies trying to predict demand, but the reality is you don't really know until you know," said Wu, who recommends buying Apple shares. "I'm not taking any guesses."
Apple isn't disclosing early order numbers and won't say whether it will disclose opening weekend sales, as it's done in the past for the iPhone, said spokeswoman Natalie Kerris.
Last weekend, Apple moved back the shipping date for new iPad orders to Monday, April 12. Customers who previously placed orders will still get the device Saturday. The move fueled speculation that demand for the iPad is higher than Apple expected, Huberty and Munster said.
Apple may sell 300,000 to 400,000 iPads this weekend, including pre-orders, Toni Sacconaghi, an analyst at Sanford C. Bernstein & Co. in New York, said in a report Tuesday. Sacconaghi, the top-ranked computer analyst, according to Institutional Investor magazine, predicts Apple will sell 5 million iPads in the first 12 months after its debut, with 2.2 million of those shipped before Apple closes its fiscal year in September.
Jobs unveiled the iPad in January, showing off a tablet computer with a 9.7-inch touch screen that can serve up Web pages, e-mail, music, videos, games, electronic books and iPhone applications.
While analysts are shying away from predicting initial iPad demand, they are taking a stab at sales for the full year. Even those vary widely. Huberty and David Bailey of Goldman Sachs Group Inc. both estimate sales of as many as 6 million in 2010. Ben Reitzes of Barclays Capital in New York puts the number at 5 million. Wu of Kaufman Bros. estimates 2 million to 2.5 million.
Huberty said she expects Apple will sell 750,000 iPads in the quarter ending in June.
The first three iPad models to go on sale in the U.S. work with Wi-Fi networks, and they start at $499. Three more versions will follow at the end of April. Those work with third- generation wireless phone networks and cost from $629.