iPad Set for Best Buy, But Shortages of Mobile Device Loom
If you pre-ordered your Apple iPad for delivery this Saturday, good news: Apple has begun shipping the units. It likely has an agreement with UPS not to deliver the units before the April 3 delivery date, something that has been done in the past with product launches. Apple arranged for iPhone 3GS deliveries on a certain date last year, and Amazon and Fedex had a similar agreement for the delivery of the later "Harry Potter" books.
If you haven't pre-ordered the hottest new gadget from the Cupertino company, then you better be patient. For starters, Apple (NASDAQ: AAPL) is delaying the delivery of pre-orders placed after March 27 until April 12. No official reason has been given for the delay, but Apple is believed to be bedeviled by production delays in China.
Only the W-Fi version of the iPad is scheduled to ship on April 3; models with 3G support come later this month. The retail price of the 16GB Wi-Fi model is $499, $599 for the 32GB, and $699 for the 64GB model. The 3G models will be $130 more than their non-Wi-Fi brethren at the same storage capacity.
The company announced on Monday it will sell the units through its 221 retail stores as well as retail giant Best Buy (NYSE: BBY), but it won't have a lot on hand. An internal Best Buy memo obtained by The Unofficial Apple Weblog (TUAW) shows Apple will only distribute 15 iPads per store five of each memory configuration, 16GB, 32GB and 64GB and each store is under strict orders to set aside four of those iPads to be floor display models.
Starring: Videos of the Apple Mobile Device
Those who strike out can watch the new Guided Tours Apple has posted on its home page.
Also, even the promise of a limited initial inventory isn't certain. As part of the memo, Apple instructed Best Buy "In the event Apple cannot make inventory for April 11, stores will need to hold inventory from the April 3 shipments for the April 11 ad." April 11 is a Sunday, which means Apple likely has a special advertisement planned for the Sunday papers. Apple plans to deliver another 15 iPads to each Best Buy for an undisclosed April 12 event.
Also, not every Best Buy is slated to get iPad stock. Only 670 of Best Buy's more than 1,000 stores will carry the iPad initially, and TUAW says it will only be the larger footprint stores with a dedicated Apple sales rep.
Best Buy normally uses large footprint outlets of 40,000 square feet or more, but has begun to use 20,000 square foot and under designs to get into more areas. The larger stores have a dedicated Apple station separate from their computer section, with a table full of Apple MacBooks and iMacs and a dedicated Apple sales rep. These stores will be the ones to carry it, says TUAW.
Not that the iPad needs help. Despite the initial complaints from some observers at the iPad launch, interest remains high. Within two weeks of opening for pre-orders, more than 240,000 orders had been placed.
Is iPad Demand Under Appreciated?
Morgan Stanley analyst Katy Huberty issued a rather generous prediction on Monday that Apple's manufacturing partners now expect to ship 2.5 million iPads between March and May. While that's not counting shipped units to customers, merely manufactured units to Apple, it's also far better than her previous estimate of 750,000 for the June quarter.
All told, she expects Apple will ship eight to 10 million iPads in calendar 2010. "We continue to believe the market under-appreciates longer-term iPhone/iPad demand," Huberty wrote in a research note. "Negative investor sentiment on the iPad centers on the lack of a 'killer app' or new technology."