Depending on when a customer ordered a new iPad from Apple Computer Inc. (AAPL), that customer will be able to pick up her new iPad on April 3rd, as planned, or will have to wait until April 12th. It appears that Apple has changed the ship date in response to heavy demand for the new tablet.
Sales for the device in the June quarter are expected to be around 1 million units. As always with the announcement of a new class of product from Apple, the hype is very strong. Increased hype means increased expectations means unhappy customer who can’t get the product on the first day of sales.
Will that hurt Apple? Probably not among the true believers, but what about the other consumers who may not yet belong to the tribe? Apple faced similar demand issues with both the iPod and the iPhone, and both went on to become huge successes, so it doesn’t seem worth the time to worry about whether or not the company can make everybody happy on April 3rd.
The larger issue, of course, is whether or not anyone needs a device that costs a minimum of $499, can run only one application at a time, has no camera or phone, and can’t view videos that rely on Adobe Systems Inc.’s (ADBE) Flash software. On the plus side of the equation is the iPad’s beautiful screen and very fast Web browser.
But will the screen and the browser be enough to dent the sales of Amazon, Inc.’s (AMZN) Kindle reader? You don’t need a color screen to read the latest best seller. And while the size of the device makes for easier viewing than a smartphone’s tiny screen, it’s size also means that you can’t carry it in your pocket.
Tablet computers have always faced a very tough road. It always seems like they offer a new way of doing things, but that has never caught on with enough consumers to build a sizable market for the devices. One thing that might make a difference for the iPad is Apple’s arrangement with magazine publishers, like Time Warner Inc. (TWX), which publish full-color magazines that depend heavily on photos for their impact. Sports Illustrated, for example, would not be the same on a black-and-white Kindle.
But will the average reader of Sports Illustrated be willing to spend $499 just to read a magazine that he already subscribes to? Is the value proposition behind the iPad strong enough to convince a buyer to part with that kind of money?
Analysts and investors are betting that the iPad will be a game-changer. We won’t know how successful the iPad will be until its been out for a year or so. Initial sales and hype will certainly give it a boost, but will a skeptic go into an Apple store, put his hands on an iPad, and fall in love? If that doesn’t happen, all bets are off. Beauty is only skin deep, especially at $499 a pop.
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