Shoppers began lining up to purchase Apple Inc.’s AAPL -0.68% third-generation iPad on Friday, as the technology giant tries to widen its lead in the fast-growing tablet market.
Snapping Up New iPads
A man in a mask celebrated with Apple store’s staff after buying a new iPad in Tokyo Friday.
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Photos: The Apple Evolution
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Crowds were expected at Apple retail stores from Australia to Switzerland to become one of the first to buy the new iPad. The new tablet computer, priced starting at $499 in the U.S., has a higher-resolution screen and faster networking capabilities than its predecessor, which has dominated the market to date.
Apple stores in 10 countries, including Japan, France and the U.S., were opening at 8 a.m. local time Friday—in some cases, hours before usual—to accommodate what were expected to be big crowds. Select retailers like Best BuyCo., BBY +5.35% RadioShack Corp.,RSH +2.11% and Wal-Mart Stores Inc.WMT +0.25% will be selling the device as well.
Sales got under way first in Australia, where a queue of about 200 people stretched around the block outside Apple’s flagship store in Sydney Friday morning to be first to buy the new device. Police and security kept shoppers in line as hoots rang out inside the store as customers bought the new iPad.
Albert Chu, a 56-year-old bus driver from Sydney, bought two—a 64GB version for his daughter and 16GB version for his own use. “I will use it to trade stocks back in Hong Kong,” said Mr. Chu.
In Tokyo, more than 450 people stood in a line that stretched two blocks when the doors of the Apple store in the upscale Ginza neighborhood opened by 8 a.m. Most had started to line up once the early-morning commuter trains started running, according to 19-year-old college student Ryo Watanabe, who was the first in line.
Mr. Watanabe had taken turns waiting in line for 37 hours with his 20-year-old friend, Kento Inoue. Already an owner of the iPhone 4, iPhone 4S and the iPad 2, for which he had been around 14th in line to buy at its launch, Mr. Watanabe was determined to be first this time.
“The fact that the display has gotten better is a big enough reason for me to get it,” he said.
In Hong Kong, the mood outside the recently opened Apple store in the city’s Central district was more muted. Apple employees were the rowdiest bunch, cheering and clapping as the customers were led inside.
Earlier in the week, dozens had queued for days near the Hong Kong Apple store, despite police efforts to disperse them. In a bid to discourage scalpers, Apple implemented an “iReserve” system that required customers to place reservations online. Demand overwhelmed the number of reservations available Thursday, and only those with email confirmations were allowed to purchase the device Friday.
The anticipation for the latest iPad has built steadily since it was announced last week by Apple Chief Executive Tim Cook at an event in San Francisco. The device is the first major product launch for Apple since the latest iPhone went on sale in October, and the company needs very strong sales for each new device it sells to meet Wall Street’s lofty expectations.
This time, Apple is trying to hold on to its roughly 60% share of the tablet market with a product that is considered a refinement of last year’s iPad 2, with a speedier graphics processor and voice dictation capabilities. Overall, Apple said it has sold more than 55 million iPads as of December.
But analysts said the lack of a dramatic design change in the new iPad could cause some customers to pass on purchasing–though other Apple products, such as the iPhone 4S, have thrived despite their physical similarities to previous generation products. If customers do decide to skip the newest iPad, Apple’s sales could still be buoyed by the existing iPad 2, which the company will continue to offer at a lower cost. The 16-gigabyte, wi-fi only model, for instance, will now cost $399.
The Cupertino, Calif., company said in recent days it had sold out of its allotment of iPad preorders, saying that interest among its customers was “off the charts.” The company has since said new preorders would take about two to three weeks to ship to customers.
Piper Jaffray forecasts Apple will sell more than a million new iPads on Friday, up from around 300,000 when the original iPad went on sale in April 2010. Several financial analysts are predicting sales of multiple millions over the first weekend.
Apple’s stock has climbed on the expectations and ensuing price upgrades. Apple shares have risen more than 40% since the start of the year and are approaching $600 a share.
Given its market supremacy in tablets, Apple probably doesn’t have to wow consumers with a fresh overhaul. But expectations are sky-high just the same.
Apple will discover whether its latest changes will be enough to get consumers to line up at its stores when its new iPad goes on sale a week from Friday.
The iPad that Apple CEO Tim Cook introduced Wednesday is faster and offers a dramatically sharper display but otherwise looks quite similar to past iPads. And whether the new iPad will appeal strictly to folks who haven’t yet bought one is a key question facing the iconic company as it launches its first major new product since the 2011 death of co-founder Steve Jobs. Apple is increasingly dependent on “post-PC devices” — including the iPad, iPhone and iPod Touch — which accounted for 76% of its revenue last year.
In the almost two years since the original iPad was introduced, Apple’s tablet has been a dazzling success. It has sold more than 55 million units, and analysts expect it to top 100 million by year’s end. But Apple is facing ever-stiffer competition in the very market that it, more than any other company, has established. By Cook’s estimation, more than 100 competitive tablets were introduced in 2011.
While none have come close to matching the iPad’s success — the most successful, Amazon’s Kindle Fire, has sold in the “millions,” according to Amazon — several high-profile products have been introduced or are on the way. These include many of the Galaxy Tab models that Samsung has introduced.
Talking Tech: At the scene of Apple’s iPad unveiling in San Francisco.
Before the end of the year, Microsoft and its partners are expected to unleash new tablets based on the promising Windows 8 operating system. And more tablets will have the latest Android version, 4.0, or Ice Cream Sandwich. But Apple maintains a huge advantage in the more than 585,000 apps available in its App Store, including more than 200,000 native iPad apps.
The third-generation iPad — just plain “iPad” rather than the iPad 3 that some expected — adds several souped-up and highly anticipated features. Among them: a far crisper display, zippier processor, voice dictation and the ability to tap into the fastest 4G wireless data networks.
The new iPad is “taken to a whole new level and redefines the category Apple created with the original iPad,” Cook said at a press event here.
As with the previous iPad, the new iPad starts at $499 for a Wi-Fi-only model with 16 gigabytes of storage and jumps to $599 for a 32 GB version and $699 for 64 GB. Models that can provide speedy 4G data access when Wi-Fi isn’t available go for $629, $729 and $829, respectively. The new iPads will be available on March 16; Apple is taking preorders now.
iPad 2 price drops
Apple is keeping the prior-generation iPad 2 in the lineup, dropping the price to $399 for the 16 GB Wi-Fi version. That might make it somewhat more affordable to schools, an area of emphasis for Apple, which has been pushing digital textbooks lately. Also Wednesday, Apple unveiled a new version of its Apple TV set-top box, which brings Internet movies and TV shows — and music from your computer — to the TV set.
The latest box upgrades the high-definition video from 720p to a sharper 1080p and sells for the same $99. The Apple TV box will also be available on March 16. The company said nothing about rumors that it might ultimately bring out a full Apple-branded television set.
But most of the spotlight was focused on the brand-new iPad, and the early buzz has been positive.
“This is the best tablet on the market,” says Creative Strategies President Tim Bajarin, a leading tech analyst. Adds NPD analyst Ross Rubin, “It’s a significant improvement over the previous iPad.”
Arguably the killer feature on the latest model is the razor-sharp Retina display, a feature introduced on the iPhone 4 in 2010. “The Retina display is the thing that will set this apart and will make it hard for any of the competitors to match it,” Bajarin says.
This is the feature that Apple will be touting most loudly in its new iPad TV commercials, which they played for the press Wednesday. But Gartner analyst Michael Gartenbergsays, “Apple’s challenge is continuing to drive the message across. How do you show the display in a TV ad when it’s sharper on the iPad?”
Most high-definition TVs have a 1920×1080 resolution, but the sharper resolution of the iPad is 2048×1530, or “1 million more pixels than HDTV,” said Phil Schiller, Apple senior vice president. The result is that Web pages, text and videos will be especially crisp.
On the new models, Apple has maintained the 9.7-inch screen of earlier iPads, while claiming the same battery life of up to 10 hours (nine hours on 4G). (The battery is still sealed.) The overall design is only subtly different than predecessor models, with the new iPad slightly thicker. Most cases and accessories made by other companies ought to fit, but there are no guarantees.
While the outside looks nearly identical, the new, faster Apple-designed A5X chip with quad-core graphics doubles the processing speed of the A5 chip in the iPad 2. E-mails, videos, photos and other programs will open much faster.
There were expectations that Apple might add Siri, the loquacious digital personal assistant found in the iPhone 4S. That didn’t happen. But Apple did add voice dictation to the latest iPad. A new key with a microphone icon is on the keyboard. Press a button and you can dictate texts, e-mails and the like. Tap “done,” and the iPad converts your words into text. Apple says dictation works with third-party apps, so you can dictate your Facebook status or a caption in the Instagram photo app.
The improved camera in the new iPad mimics features introduced on the iPhone 4S — which many consumers have turned to in place of a point-and -shoot camera. The 5-megapixel camera has built-in image stabilization, to help eliminate the shakes, and offers the ability to shoot video in full 1080p HD resolution.
Some previous iPads could access cellular 3G networks; the new cellular-capable models can get faster 4G, available from AT&T and Verizon Wireless but not everywhere nationally. For now Verizon has a much larger footprint with the speediest of the 4G networks, those that access so-called LTE technology. Both Verizon Wireless and AT&T are keeping their data-pricing plans intact for the new iPad.
Verizon’s monthly tablet data plans begin at $20 for 1 GB, go to $30 for 2 GB and climb to $80 for 10 GB. AT&T offers a 250 MB plan for $14.99; 3 GB for $30; and 5 GB for $50.
Apple also introduced updates to several of its apps for the iPad, notably the iMovie video-editing app and GarageBand for playing music.
In iMovie, you can create movie trailers, as you can on Mac computers. New virtual instruments have been added to GarageBand.
Additionally, a touch-enhanced new version of iPhoto, the photo program on Mac computers, is now available for the iPad. With iPhoto — as opposed to the camera roll photo app on previous iPads — you can both edit photos and access the same libraries (“our vacation,” “baby born”) created on computers.
“The iPhone 4S proved that even when the tech press is expecting a more dramatic update, consumers feel differently,” says Forrester analyst Sarah Rotman Epps. “I don’t expect anything different from the new iPad. (It) may look similar to old models, but it’s a complete upgrade, with new battery, processor, software and screen. Consumers are going to love it.”
Apple shares rose 43 cents to close at $530.69 Wednesday.
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