Was the iPad Launch a Triumph?

"This was a triumph.
I'm making a note here:
HUGE SUCCESS.
It's hard to overstate my satisfaction."
-- From Still Alive by Jonathan Coulton, 2007

The numbers are in, and the Apple (Nasdaq: AAPL  ) iPad is doing OK. Mr. Coulton's contribution to National Poetry Month 2010 above is spoken tongue-in-cheek by a sarcastic computer, so I think it's just about right for the occasion -- first-day sales weren't tremendous, mind you, but Cupertino did all right.

Early analyst estimates had pointed to first-day iPad sales of maybe 700,000 units, but the official word is about half of that at "more than 300,000." That's still better than the first day of iPhone sales, way back in the mists of time, and many prospective buyers might be holding off until the next model drops with a remarkably affordable AT&T (NYSE: T  ) 3G connection. Oh, and Apple will present a sneak peak of version 4 of the iPhone operating system this Thursday; that's the software that makes the iPad come alive as well, and with a few tweaks here and there Apple might end the no-multitasking dilemma. Given those mitigating circumstances, one might expect the sexy tablet computer to be a bona fide hit when all is said and done.

I'm not convinced, though. The iPhone made history by redefining what a smartphone can be, paving the way for a whole new market brick by hard-won brick. It was a surprise, a shocker, an unannounced triumph -- Apple made a phone? The slow start was understandable, especially since high-speed wireless data plans were hard to come by in 2007.

This time is different. The hyper-connected infrastructure that makes iPads attractive is already in place whether you like AT&T, Verizon (NYSE: VZ  ) , or Sprint Nextel (NYSE: S  ) . Unlike the iPhone, this gadget was hyped to the high heavens ahead of time. Everyone expected the iPad to be awesome. Early sales should have gone through the roof.

And that didn't happen. When even the most rabid Apple fans choose to await software updates or better hardware before jumping in with both feet, I don't see the excitement matching the expectations. Microsoft (Nasdaq: MSFT  ) seems to have a winner in its upcoming Windows Phone 7 mobile platform, which looks like a great fit for tablet-sized devices too. Google (Nasdaq: GOOG  ) Android tablets are coming in fast, and they're looking pretty good. Unlike the early days of the iPhone, the iPad doesn't do anything that the competition doesn't, bringing back memories of Verizon's pointed "Droid Does" commercials for the Motorola (NYSE: MOT  ) Droid phone.

Apple's aesthetics may be unmatched, but the iPad's functionality isn't -- yet. I can see sales trailing off rather than picking up as consumers realize that there are other choices on the market already. That won't hurt Apple much, but somebody should give Steve Jobs a hug. He must be disappointed.

Fool contributor Anders Bylund owns shares in Google, but he holds no other position in any of the companies discussed here. National Poetry Month is always a huge success. Microsoft and Sprint Nextel are Motley Fool Inside Value picks. Google is a Motley Fool Rule Breakers choice. Apple is a Motley Fool Stock Advisor selection. Motley Fool Options has recommended a diagonal call position on Microsoft. Try any of our Foolish newsletters today, free for 30 days. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.


Read/Post Comments (17) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 06, 2010, at 2:46 PM, Turfscape wrote:

    Ugh, another Anders Bylund hack job. It's the same, worn-out, retread arguments like "Microsoft has a phone, too, now" and "Android will have 'x' functionality"...Sure, lots of folks will jump into the pool with strong products and nifty features, riding Apple's coattails to higher revenues. What you miss is that Apple provides a unique brand experience. It's much like Harley-Davidson products. There are a lot of motorcycles out there. A lot of them have more horsepower, higher top speed and lower MSRP than Harley bikes. But that isn't where H-D is competing.

    Sure, there will be other tablets with great functions...but Apple is competing in a different arena.

    And if you consider first day sales of 300,000 units a failure because you thought they might do 700,000 units based on the excitement and fervor you've noticed online...then you have to redefine both success and failure.

  • Report this Comment On April 06, 2010, at 3:01 PM, Davewrite wrote:

    I'm not sure what you mean by "This time is different. The hyper-connected infrastructure that makes iPads attractive is already in place whether you like AT&T, Verizon (NYSE: VZ), or Sprint-Nextel"

    The iPad 3G version isn't on sale yet. How does this AT&T etc statement relate to the Wifi only models sold to date?

    The 300,000 sales number doesn't include the iPad 3G, not even the preorders. Also it doesn't include Wifi models ordered and not delivered yet. One week before the launch the delivery date was pushed back for Wifi only orders.

    Another point is not only was the 300 000 just Wifi only models but the launch is just in the U.S.

    and you statement "Microsoft (Nasdaq: MSFT) seems to have a winner in its upcoming Windows Phone 7 mobile platform, which looks like a great fit for tablet-sized devices too."

    If Win Ph is so good for tablets why are Pc supporters saying HP slate loaded with DESKTOP Win 7 such a great idea?

  • Report this Comment On April 06, 2010, at 3:06 PM, marv08 wrote:

    Over 300,000 people spending an average of $650-$680 (for device plus accessories) is no success? Just because so-called analysts invented higher numbers every day? I don't think so. Taking into consideration that the tablet category was a complete and utter failure since 2001, and that the best-selling tablet PCs sold some 200k devices in all of 2009... this is an enormous success. The 3G model is not even out and this was just one country (and Apple was having more international than domestic business in the last 6 months). Once international sales start by the end of the month, they will be well on their way to sell 1 million devices in the first quarter of availability.

    Windows Phone 7 (no longer "Series" now, I still think simply calling it "Phune" would have been more like it) is a "winner"? It is not even finished, there is no shipping date, it has no apps, no copy and paste, no multi-tasking and it will have a hard time to even keep the market share of Windows Mobile 6.x.

    Android was not designed for tablets, the media player is terrible (compared to the iPhone or WebOS) and developers do not really make money on the platform yet. By the end of the year they will compete with over 100 million iPhones OS devices for developers.

    The market fragmentation (Android, Chrome OS, other Linux versions, Windows Mobile, Windows Phone 7, Windows CE, Windows XP, Windows 7 - they all are planned to be used in some kind of tablet this year) is Apple's guarantee for success. People will buy what is likely to survive. And all these devices together will maybe achieve the sales figures of one single Apple device. I know what I will be developing for.

  • Report this Comment On April 06, 2010, at 3:08 PM, conradsands wrote:

    Wireless Profit Margins:

    Verizon Wireless = 45 percent

    AT&T = 39 percent

    Sprint = 18.2 percent

    Now we know where Verizon and AT&T get all that money to run commercials 24x7, pay out huge executive bonuses and hire armies of lawyers and lobbyists -- the American consumer.

    Not all pricing claims are the same. The advantages consumers get with Sprint’s $69.99 Everything Data plan include nationwide unlimited text and picture messaging, unlimited Web, unlimited GPS navigation and unlimited calling to any mobile in America, compared to AT&T and Verizon’s $69.99 pricing plans, which are good for unlimited talk only. And Sprint’s $69.99 plans are available with any phone while AT&T and Verizon’s are limited to lower-end phones.

    AT&T and Verizon have attempted to confuse the marketplace by lowering their pricing to $69.99, but theirs are for calling only. In today’s economic environment customers are interested in more than just voice pricing. They also want the best value for all the other things they rely on their wireless phone for and Sprint delivers. Sprint's Everything Data plans start at $69.99 per month and include Any Mobile, Anytime for unlimited calling with any U.S. wireless user, plus unlimited text, picture and video messaging, e-mail, Web browsing, social networking and more.

    4G wireless--which operates at speeds up to 10 times greater than today's 3G networks--could become a reality for many businesses and consumers over the coming year. Sprint, the current 4G leader, says it will introduce its first 4G smartphone before mid-year.

    Sprint’s fourth-generation phone -- the HTC EVO 4G -- will be available this summer and run Google's Android software.

    The phone also will be able to act as a mobile hotspot, allowing customers to connect up to eight Wi-Fi enabled devices. As a result, people could use the phone for their Internet connection for a laptop or desktop computer.

    Where 4G isn't available, the phone will use Sprint's 3G network. It will be available through all the usual Sprint channels and RadioShack, Best Buy and Wal-Mart.

  • Report this Comment On April 06, 2010, at 3:09 PM, conradsands wrote:

    Wireless Profit Margins:

    Verizon Wireless = 45 percent

    AT&T = 39 percent

    Sprint = 18.2 percent

    Now we know where Verizon and AT&T get all that money to run commercials 24x7, pay out huge executive bonuses and hire armies of lawyers and lobbyists -- the American consumer.

    Not all pricing claims are the same. The advantages consumers get with Sprint’s $69.99 Everything Data plan include nationwide unlimited text and picture messaging, unlimited Web, unlimited GPS navigation and unlimited calling to any mobile in America, compared to AT&T and Verizon’s $69.99 pricing plans, which are good for unlimited talk only. And Sprint’s $69.99 plans are available with any phone while AT&T and Verizon’s are limited to lower-end phones.

    AT&T and Verizon have attempted to confuse the marketplace by lowering their pricing to $69.99, but theirs are for calling only. In today’s economic environment customers are interested in more than just voice pricing. They also want the best value for all the other things they rely on their wireless phone for and Sprint delivers. Sprint's Everything Data plans start at $69.99 per month and include Any Mobile, Anytime for unlimited calling with any U.S. wireless user, plus unlimited text, picture and video messaging, e-mail, Web browsing, social networking and more.

    4G wireless--which operates at speeds up to 10 times greater than today's 3G networks--could become a reality for many businesses and consumers over the coming year. Sprint, the current 4G leader, says it will introduce its first 4G smartphone before mid-year.

    Sprint’s fourth-generation phone -- the HTC EVO 4G -- will be available this summer and run Google's Android software.

    The phone also will be able to act as a mobile hotspot, allowing customers to connect up to eight Wi-Fi enabled devices. As a result, people could use the phone for their Internet connection for a laptop or desktop computer.

    Where 4G isn't available, the phone will use Sprint's 3G network. It will be available through all the usual Sprint channels and RadioShack, Best Buy and Wal-Mart.

  • Report this Comment On April 06, 2010, at 3:14 PM, Longanshortovit wrote:

    Another short sighted review. The success of the iPad will have little to do with the first iteration of hardware and the wifi only model. The real key to the long term market that will be invented or re-invented by Apple is content, applications, and the overall user experience. Currently, there is no one that can combine new media, financial incentives for providers, revenue on little or no investment, and unlimited opportunity like Apple.

    Name any other device or operating system, but none of them have millions of app developers worldwide working essentially at no cost to just to make it to the app store. The real game changer with the iPad will be the new apps that will come to market that will do things that other tech companies can't even imagine.

  • Report this Comment On April 06, 2010, at 3:20 PM, aeosfool wrote:

    Ha ha ha! 300,000 on day one of one half of a product introduction is just OK? Outselling the hysterical iphone indrouction is just ok? Where did you get the 700,000 number...was it from Gene Munster who incorrectly calculated based on the lines outside Apple stores? He had previously estimated 200,000-300,000 and he is a very optomistic Apple bull. Many others had estimated lower or in that range.

    Truth is, no one can for sure estimate how successful

    this product will be but so far it is probably the biggest product introduction in Apple's history and any other company out there would have loved to have a first day like that..especially with the margins Apple enjoys.

    This product is likely going to be huge at Christmas time...those that would have hesitated to give a minimum $1000 computer will be much more likely to give a very cool present for half that.

    Steve Jobs doesn't need a hug...he, his employees and shareholders are keeping very warm sitting in their piles of cash that is growing faster than they can count it.

  • Report this Comment On April 06, 2010, at 3:29 PM, jamesreidy wrote:

    From engadget.com, "this does include deliveries of pre-ordered units to customers, deliveries to channel partners (such as Best Buy) and sales at Apple Retail Stores."

    Perhaps the stat should read, "300,000 sold as of the first day".

    The way it reads now it sounds like 300k units walked out the door on day one when really it's more of the number that have sold over the last month or so leading up to launch day.

  • Report this Comment On April 06, 2010, at 3:42 PM, sssteverrr wrote:

    I tell people that I used to respect experts until I became one in my field and realized I could pull opinion out of my ass and people listened.

    Apple sells a beautifully designed product that you have to hold in your hand and use to truly appreciate to 300,000 people who have never held it or used it in ONE day.

    I THINK THIS INDICATES AN FUTURE FOR THIS PRODUCT AND A TREMENDOUSLY SUCCESSFUL LAUNCH.

    But I'm not an expert.

  • Report this Comment On April 06, 2010, at 3:49 PM, Buzzy43 wrote:

    The fellow above has it right. 300k is just purchased shipped, not wifi+3g ordered. That number will be big because most people do not want to depend on just wifi.

    In concrete terms, the text book market for this will be huge. My sons back pack weighs 34 lbs. Poof, that weight is gone and the text book content will be astounding.How many kids, teens and college students will have them? 60mill+ are enrolled in k-grad school in any given year. Will iPad get 8-10% or more of that? Buy the stock.

  • Report this Comment On April 06, 2010, at 3:54 PM, marv08 wrote:

    @sssteverrr: Obviously nobody needs to be an expert here :-)

    Still, I will happily wait for Anders' fully detailed explanation why he never fails to miss any obvious (or even not so obvious) opportunity to hype the Nexus One - which, by the way, sold 135,000 units in more than two months, despite "the hyper-connected infrastructure that makes Nexus Ones attractive is already in place whether you like AT&T, Verizon, Sprint Nextel" or even T-Mobile...

  • Report this Comment On April 06, 2010, at 4:08 PM, rbtrader wrote:

    Well it's obvious the hype exceeded the reality of the product by a wide margin. The "Apple Faithful" and the "fanboys" did their duty and stood in line so the media could show how excited everyone was about the iPad. The stock should hold until after the Thursday presentation by Apple.

  • Report this Comment On April 06, 2010, at 4:35 PM, demodave wrote:

    "Early sales should have gone through the roof.

    ...

    And that didn't happen."

    I think it is way to early to evaluate "early sales". I would say that "early sales" should count the first month if not the first week - and certainly not only the first *day*.

    But then, it wouldn't be Anders Bylund if there weren't a cheap shot in there, would it. ;)

    Wait for 3G, iPhone OS 4, and initial international sales before you assume the worst.

  • Report this Comment On April 06, 2010, at 4:36 PM, demodave wrote:

    "Early sales should have gone through the roof.

    ...

    And that didn't happen."

    I think it is way to early to evaluate "early sales". I would say that "early sales" should count the first month if not the first week - and certainly not only the first *day*.

    But then, it wouldn't be Anders Bylund if there weren't a cheap shot in there, would it. ;)

    Wait for 3G, iPhone OS 4, and initial international sales before you assume the worst.

  • Report this Comment On April 06, 2010, at 9:47 PM, poppawheeler wrote:

    Definition of an expert:

    X is used in mathematics to describe an unknown number.

    Spurt is a large drip of water under pressure.

    So an expert is nothing but an "UNKNOWN DRIP"

  • Report this Comment On April 07, 2010, at 12:21 AM, beetlebug62 wrote:

    Someone needs to iCal Anders' latest negative piece about Apple. Honestly, Anders, no matter how much negativity you spread, it will still not make Apple the worst stock to own in 2010.

  • Report this Comment On April 07, 2010, at 3:15 AM, Wesss wrote:

    Everyone seems to share my opinion of the bizarro anti-Apple bias at the Motley Fool.

    I'm no fanboy or industry guru. But the company has had great stuff that people love for the last 13 years since Jobs returned and we've all gotten rich off the stock.

    I expect good analysis for my Motley Fool subscription money, not thinking and writing that's so lame every reader picks up on it immediately.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1144751, ~/Articles/ArticleHandler.aspx, 9/19/2014 9:54:02 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement