Apple's iPad 2 hits overseas stores after U.S. sellout

Reuters News
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Posted: Mar 24, 2011 10:49 PM

WELLINGTON/SYDNEY (Reuters) - Hundreds of customers lined up outside Apple stores in Australia and New Zealand on Friday for the international launch of the iPad 2, which has flown off the shelves in the United States leaving the company struggling to meet demand.

Analysts forecast some 1 million devices may have been sold in the first weekend of the launch in the United States, but many warn that it's not clear how supply constraints will affect availability following the Japan earthquake and tsunami.

Apple plans to roll out the new iPad on Friday to 25 markets including France, the United Kingdom, Canada, Denmark, Germany, Italy, Mexico, Netherlands, and Spain.

The iPad 2, a thinner and faster version that features two cameras for video chat, was introduced in the United States on March 11. But some would-be buyers have expressed frustration at how difficult it has been to secure one of the wildly popular tablet computers, sparking speculation Apple misjudged demand.

"If it wasn't for the iPad, I wouldn't be in Australia right now," said Alex Lee, a backpacker from Canada, who was the first in the queue outside the glass-fronted Apple store in Sydney's central business district. He said he diverted his travels from Singapore to attend the launch.

"It's like a habit. I've also lined up on Regent Street in London for the iPhone," added Lee, who had a folding chair and blanket and had spent two nights waiting.

Blue-shirted Apple staff in Sydney handed out trays of sandwiches to those in the queue, some of whom had bedded down on blankets overnight before being awoken by bright sunshine.

The iPad 2 goes on sale at 5 p.m. local time (0400) GMT in New Zealand and at 0600 GMT on the east coast of Australia, before sales kick off in other markets.

Its retail price in Australia starts at A$579 ($568), against $499 in the United States.

Chief Executive Steve Jobs said in a statement on Tuesday the company was "experiencing amazing demand for iPad 2 in the U.S." and added "We appreciate everyone's patience and we are working hard to build enough iPads for everyone."

Fiona Martin, a spokeswoman for Apple in Australia, declined to comment on whether there was enough stock to meet demand.

"We don't comment on speculation, we've got plenty down there for all those folk that are in the queue."

In New Zealand, a shop assistant at JB HiFi, one of Wellington's major electronic shops, said there had been a constant stream of people asking about the iPad.

"We haven't even seen it, we don't know how many we're getting, but there'll be big demand you can bet," said the assistant.

A prospective buyer, 22-year-old student Ian MacDonald, said he had held off buying the first generation iPad because it lacked a camera and he wanted any bugs ironed out.

"This version looks way better, with the cameras and it beats all the other tablets because there are so many apps (applications)," he said.

In addition to Friday's rollout, Apple said the iPad 2 will be available in Hong Kong, South Korea, Singapore and additional countries in April.

JAPAN SUPPLY CONCERNS

Analysts are concerned that Apple will face shortages of key components for the iPad 2 because of the earthquake and tsunami that struck Japan two weeks ago.

Several key components in the new version of Apple's popular iPad come from Japan, including the battery and the flash memory used to store music and video on the device, according to IT research house iSuppli.

Apple delayed sales of the iPad 2 in Japan, but has said that had nothing to do with any component shortages.

"We expect Apple to face increased pressure in meeting iPad 2 and iPhone 4 demand in the second quarter," Stifel Nicolaus analyst Doug Reid wrote recently. "Although it is early to gauge the extent of component supply shortages, we see risk to our iPad and iPhone unit estimates in the June quarter."

That said, the wait time on delivery of online orders has shortened to 3-4 weeks in recent days from as high as 6-7 weeks, suggesting component shortages have not reached critical levels.

The iPad two also faces increased competition. Samsung Electronics and Motorola have tablets on the market and Blackberry-maker Research In Motion and Hewlett-Packard Co are set to release tablets in coming months.

(Reporting by Cecile Lefort and Amy Pyett in Sydney and Gyles Beckford in Wellington; Additional reporting by Edwin Chan in Los Angeles; Writing by Ed Davies)