Monday, May 27, 2024

iPad in Asia and Europe: Customer Mania

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The device, which has a 9.7-inch color touchscreen for surfing the Web, watching movies, playing games and reading e-books, goes on sale in Germany, France, Italy, Switzerland, Spain, Britain and Canada later on Friday.

Apple has sold a million iPads in the U.S. since its April 3 debut, exceeding even the most bullish pre-launch estimates. Demand was so heavy the company had to delay the international roll-out by a month.

At Apple’s flagship store in Tokyo’s Ginza shopping district, about 1,200 people formed a line that stretched some 800 meters.

When a bell on the roof of the nearby Wako department store rang at 0800 local time, the store opened to loud cheers from waiting customers. The street was so packed with customers and media that police warned Apple employees to clear the sidewalk.

“I wanted to touch it as soon as possible. I felt real excitement when it was finally in my hands,” said Takechiyo Yamanaka, 19, who camped out in front of the Ginza store from Wednesday evening to be the first in line.

Across town, Softbank Corp, a mobile phone provider and distributor of Apple products in Japan, held an event at its Omotesando outlet for the iPad that was carried live on Japanese morning TV news programs.

While Apple’s high-profile launch of the iPad has set the early standard for the tablet category, rival offerings from Sony Corp, Hewlett-Packard and Dell will ensure tough competition ahead.

The buzz around the iPad helped propel Apple past Microsoft this week to become the world’s most valuable technology stock, highlighting the remarkable turnaround of a firm that nearly went out of business in the 1990’s.

But Apple does face hurdles to making the iPad a sustainable success. Analysts have warned it could struggle to meet demand for the device and a raft of rivals have launched similar products that could put chip away at its pricing power.

A model with 16 gigabytes of memory and Wi-Fi capability is being sold for 48,800 yen ($537) in Japan, compared with $499 in the United States.

“The real game will start after ‘core users’ have the devices. I imagine a price cut may be necessary before the Christmas holiday season to stimulate demand,” said Michito Kimura, a senior analyst at market research firm IDC Japan.


Apple now gets almost three-fifths of its revenue outside the U.S. market, and is counting on its pre-existing base of fans that already own an iPod, iPhone or Macintosh computer to add the iPad to their collection.

“I bought it for Web browsing in the lounge room essentially,” said Graham Parr, who had just purchased the iPad at an Apple store in Sydney, one of seven in Australia.

Compared with his iPod touch, the iPad is “much bigger, which is good for me because my eyes are going,” Parr said.

RBC Capital Markets estimates iPad’s total shipments will reach 8.13 million units worldwide by the end of this year.

However, there is some concern that Apple, which contracts out the production of the device and depends on numerous parts suppliers, may not be able to supply enough of the device.

“It’s a little bit hard to say because there’s still going to be supply constraints, but I’m expecting them to sell every single thing they can ship,” Andy Hargreaves, a U.S.-based analyst at Pacific Crest Securities, said ahead of Friday’s launch.

Apple suspended taking pre-orders for the device in Japan on May 13 after only three days due to overwhelming demand.

“I’m not going to buy the iPad now as it’s expensive. And I’m a Sony fan,” said Kengo Nakajima, a 19-year old college student who waited in line with his friend Yamanaka at the Ginza store.

Apple has yet to announce a launch date for mainland China, which could prove a much more difficult market to profit from. Bootleg versions of the gadget are being snapped up online and in retail malls in the piracy-prone country.

Copyright 2010 Reuters. Click for restrictions.

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