US demand forces delay in rollout of iPad

Published on Wednesday 14 April 2010 21:44

APPLE is to delay the international roll-out of its iPad tablet computer due to heavy demand and swift sales in the United States.

The US company faces a potential backlash from customers and retailers overseas, but analysts said any frustration would probably give way to pent-up demand for the popular touch-screen device once it hits the shops.

In the US, the device has proved more popular than expected, selling 500,000 units in the week after its 3 April launch. "It is a little surprising, weren't they expecting that?" said Hudson Square Research analyst Daniel Ernst. "On the flip side, it's a high-quality problem. There isn't another product like it."

The company said that sales were "likely continue to exceed our supply over the next several weeks". Apple plans to announce international pricing and begin taking online orders on 10 May, and iPads will hit stores at the end of the month.

Separately, Vodafone Group said it would offer iPad price plans from the end of May in Britain as well as in Australia, Germany, Italy and Spain. But the delays risk irritating customers and creating headaches for retailers banking on the popular tablet computer to draw in store traffic.

However, Apple may reap higher margins from additional sales made at US Apple stores and through its website, according to Cross Research analyst Shannon Cross.

"It validates there is strong end-market for the device and that the demand was not coming just from early adopters or 'Mac heads'," she said. "It has actually got widespread interest."

The iPad's early US sales impressed analysts, many of whom expect a million units to be sold in the quarter ending June, and roughly five million in 2010, though estimates vary widely.

Cross yesterday raised her iPad sales estimate in the quarter to 2.25 million from 1.5 million, and boosted her price target for Apple shares to $315 from $310.

The electronics giant has staked its reputation on the 9.7in touch-screen tablet, essentially a cross between a smartphone and a laptop. It is helping foster a market for tablet computers that is expected to grow to as many as 50 million units by 2014, according to analysts.