Apple Sells 300k iPad 3G Units, But Streaming Mobile App Limits Reported

Apple's iPad 3G hit retail stores and landed on doorsteps of those who pre-ordered it on Friday -- with the result that the Apple tablet has already surpassed 300,000 units sold, according to one analyst who follows the company. However, owners are finding their iPad 3G experience a little lacking.

Piper Jaffray analyst Gene Munster checked with 50 Apple (NASDAQ: AAPL) retail stores in addition to attending the iPad 3G launch at retail stores at New York and Minneapolis, leading to his 300,000 unit-sales figure. Supply is limited, with 49 of the 50 stores Munster checked out on Sunday sold out of the 3G.

Munster now puts the iPad installed based at 1.3 million, with 1 million Wi-Fi units and 300,000 3G. He projects that the eventual split will reach 60 percent Wi-Fi and 40 percent 3G. He also expects there will be continued supply shortages thanks to high demand and low supply. All told, he expects Apple to ship 4.3 million iPads this year.

"Near-term, this may put downward pressure on launch day/weekend statistics, but long-term we see it as a positive, as consumers are definitely interested in the iPad as a new category," Munster wrote. Piper Jaffray estimates Apple will report revenue of $13.750 billion in the second quarter and earnings per share of $2.64. It has Apple's stock rated as Overweight, with a target price of $323.

The 3G iPad models carry a $130 price premium over their Wi-Fi-only counterparts, and offer no-contract data plans with the AT&T 3G network. The 16GB iPad 3G model sells for $629, the 32GB capacity is $729, and the high-end 64GB offering is $829.

The no-contract 3G deal is a switch from the usual multi-year contract deal carriers offer with their phones, but that's because there is no hardware subsidy involved.

Despite the good news for Apple, some of its early adopters are starting to report that 3G performance may be limited in some ways.

iLounge, a blog dedicated to Apple's gadgets, noticed that some video streaming applications behave differently on the 3G model than they do on the Wi-Fi model.

The iPad's built-in YouTube application only plays a low-resolution version of the video, while the Wi-Fi version will play standard and high definition versions of the same videos. Other third-party applications, such as the ABC Player, refuse to work at all over the 3G connection. Attempting to use the application causes a notice to appear: "Please connect to a Wi-Fi network to use this application. Cellular networks are not supported at this time."

Neither Apple nor AT&T returned requests for comment.

It's unclear what might be behind the limitations, although the iPhone is known to be similarly limited in some ways. For example, iPhone apps over a certain size cannot be downloaded via a 3G connection, and the App Store will tell a user attempting to download them to try instead from a Wi-Fi connection. This is done to ease the burden on AT&T's 3G network, which has had its share of well-documented problems.

Dan Frommer, an editor with Business Insider, sent out a tweet stating "ABC is Wi-Fi only on purpose. I believe rights play a role. (they're different on Wi-Fi vs 3G) sounds dumb but true." He added that the decision was made by ABC based on technical decisions as well.

Andy Patrizio is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.

TAGS:

iPad, iPad apps, Apple, 3G, mobile apps

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