Apple iPad Hits Market With Smooth Launch Day

Users are limited to two pre-orders, but that makes sense, according to one analyst. The details of the AT&T 3G contract are out as well, despite the fact 3G units are not coming out for another two months.

Apple opened up its online store for preorders of the iPad at 5:30 am Friday morning, and other than a brief service outage, the first day of orders has gone smoothly. Customers are limited to only two pre-orders per person.

Apple (NASDAQ: AAPL) is taking orders for both the Wi-Fi and 3G models, although only the Wi-Fi model will ship on the April 3 launch date, a Saturday. Apple noted on the store's iPad page that if Saturday delivery is not available in a customer's area, the iPad will be delivered the following Monday, April 5. Or, as Apple notes, customers can pick up the device at a local Apple store.

The iPad starts at $499 for the 16GB model with Wi-Fi connectivity only. The Wi-Fi-only 32GB model is $599 and the 64GB model is $699. The 3G versions add $120 to the Wi-Fi price at all three storage capacities. The 3G version will ship shortly after the Wi-Fi version.

The iPad comes with 90 days of free telephone technical support. The hardware, including the rechargeable battery and all accessories, carries a one-year warranty. Customers can buy an extended AppleCare warranty to add two years of coverage for $99.

Apple also disclosed the prices of the various accessories for the iPad. The company is offering an iPad Case for $39 that flips over to cover the screen or behind the device to serve as a stand. The iPad Dock is a stand that holds up the unit and serves as a charging base, and sells for $29. The iPad Keyboard Dock offers the same functions along with a keyboard. It runs $69. The case and dock are due on launch day, while the keyboard dock comes a few weeks later.

Other accessories include ear buds with a remote and microphone for $79, a USB power connector for $29, and a VGA adapter to connect to a monitor for $29.

3G contract details

With the opening for preorders, Apple also released information about the 3G service available from exclusive partner AT&T (NYSE: T). Customers can choose from two data plans: a $14.99 per month agreement that limits the user to 250MB per month of data or a $29.99 for unlimited data.

Unlike a cell phone contract, the deal is month to month, and the contract is managed entirely from the iPad. Subscribers can cancel the service for a month or two right from the iPad, then reactivate it. The device also allows users to monitor their data consumption.

AT&T will alert those with the 250MB deal when they are running out of bandwidth. Subscribers will receive three alerts when they have 20 percent, 10 percent and no data bandwidth available.

The flexibility of the contract strikes Creative Strategies analyst Ben Bajarin as a smart move, especially given the complaints about AT&T's 3G service.

"The value of a pervasive [3G] connection in the wild is still to be established," he told InternetNews.com. "I think AT&T understood that if they locked you in, people wouldn't get a subscription. Until the market value and use cases really get established, you will see the penetration rate low in the beginning."

How many sold?

The Apple store was briefly overwhelmed by orders, but now is running smoothly. Just how many units have been ordered is now subject to the conjecture Apple users seem to enjoy amid the firm's usual cone of silence.

One blogger noted that two orders placed 30 minutes apart this morning resulted in Order ID numbers that were approximately 10,000 apart, so he extrapolated that Apple is selling around 20,000 units per hour. However, that might include other Apple Store sales beyond the iPad, or for that matter, iPad peripherals.

Not to be outdone, Victor Castroll, an analyst with Valcent Financial Group and a member of the Apple board on Investor Village, estimated sales of 50,000 units in two hours.

Bajarin thought Apple made the right move limiting orders to two per person. "They don't want people, buying up a whole slew of them and then selling them overpriced them on eBay, which sometimes happens with shortages. So limiting that is smart," he said.

There have been rumors of a possible shortage at launch due to some component tightness in the market.

"It happens frequently with new product launches. The PlayStation 3 was delayed due to components and the Xbox has had problems. So it happens," Bajarin explained. "This is a more complicated product. The launch of any first product in any new category is liable to have issues."

Andy Patrizio is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.




Tags: iPad, Apple, Apple iPad, tablet, 3G


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