/ 25 March 2011

Apple fans queue overnight to beat iPad shortages

Hundreds of customers queued outside Apple stores in Asia and Europe to buy an iPad 2 tablet computer amid fears that shortages in the United States (US) would be repeated abroad.

The iPad 2, a thinner and faster version that features two cameras for video chat, was introduced in the US on March 11, and analysts estimate about a million were sold in the first weekend. Prices start at $499.

On Friday, the rollout was extended to 25 countries including most of Europe, Australia, New Zealand, Canada and Mexico. The Japanese launch is delayed, but Apple says component shortages resulting from the earthquake there are not to blame.

Some non-Apple outlets in New Zealand and London said they had only been allocated a dozen iPads apiece. A source at one United Kingdom retail chain guessed the reason was likely a desire on Apple’s part to be seen to sell out rather than any shortage of parts.

Apple shares were up 1,9% at $351,60 by 4.11pm GMT, when the Nasdaq Composite index was up 0.9%.

Canadian backpacker Alex Lee, a veteran of Apple product launches, was the first to claim his iPad 2 at the Apple store in Sydney where he had been in line for two nights.

“If it wasn’t for the iPad, I wouldn’t be in Australia right now,” said Lee, who had already bought an iPad 2 in the US. “It’s like a habit. I’ve also lined up on Regent Street in London for the iPhone.”

No queues
In London, 32-year-old financial adviser Jewels Lewis was at the head of the queue at Apple’s Regent Street store, after being fourth in line for the original iPad a year ago. He had been waiting since 7.30am on Thursday for Friday’s 5pm sale.

“It’s quite nice just to take the time out, chill out, reflect,” said Lewis, enjoying the morning sunshine from his folding chair at the head of a queue of about 200 people.

In Frankfurt, Germany, about 80 people were waiting outside the Apple store. A few had been there since Thursday night but most gathered on Friday morning.

Thorsten Schumann, aged 30, summed up the instant attraction that many consumers feel for Apple products. “I was in the States and I held an iPad 2 in my hand, and now I want to have one,” he said.

In Nokia’s homeland Finland, where Apple has made less of an impression than in many other markets and has no flagship stores, no queues were to be seen outside reseller outlets in below-freezing temperatures.

In Asia, the iPad 2 will be officially available in Hong Kong, South Korea, Singapore and other countries in April. In Hong Kong, iPads purchased in the US are already on sale for hefty mark-ups.

Official prices for the iPad are cheapest in the US and most expensive in Denmark.

iPads for everyone
The first iPad, which went on sale a year ago, sold 500 000 units in the first week and crossed the one million unit mark in 28 days. Nearly 15-million iPads were sold in nine months of 2010, two or three times as many as analysts had predicted.

Analysts expect the company to sell 30-million or more this year, generating close to $20-billion in sales, even as other companies launch their own devices.

Apple Chief Executive Steve Jobs said on Tuesday the company was “working hard to build enough iPads for everyone” as the company struggled to meet US demand.

Apple’s clout in the supply chain means investors remain confident — for now — that it enjoys priority and can secure critical components ahead of competing manufacturers.

Waiting time for delivery of online iPad orders has shortened to three to four weeks from as much as six weeks to seven weeks a few days ago.

Still, Apple is unlikely to avoid a hit from the disruption in Japan, analysts say.

“We think the disruption especially for chemical materials could continue throughout Q2 and when the components become absent, it’s inevitable that Apple would be affected,” said Calvin Huang, an analyst at Daiwa in Hong Kong.

“Then we will see a situation that customers will have to wait for months for an iPad to arrive after placing an order.”

Near-monopoly in tablet market
Several key components in the new version of the iPad 2 come from Japan, including the battery and the flash memory used to store music and video on the device, according to technology research firm IHS iSuppli.

Delays have been relatively harmless to Apple while it enjoyed a near-monopoly in the tablet market it created with the original iPad last year, but rivals are rushing to market with their own offerings to cash in on the trend.

Samsung Electronics and Motorola have tablets on the market and Blackberry-maker Research In Motion and Hewlett-Packard will release theirs in coming months.

RIM, which has been losing ground to Apple and to Google’s Android, warned on Thursday that its earnings would slip as it spends heavily on the launch of its PlayBook tablet, which is due to go on sale next month. — Reuters