Unlike last year, Apple (NASDAQ:AAPL) didn't provide opening launch-weekend sales for new iPad Air when the tablet hit the market on Nov. 1 in more than 40 countries. For the most part, investors are still subject to the guessing game when it comes to deriving a meaningful estimate of how may shipments Apple has recorded so far. But there are several indications, starting from a new statement from Apple, that suggest Apple is moving a considerable number of iPad Airs.
Apple speaks up
"The response to iPad Air has been incredible," Apple's senior vice president of worldwide marketing, Philip Schiller, said this morning in a press release announcing immediate availability of its new iPad Mini with Retina display.
But what is "incredible"?
That's a tough question. But here is what we do know. Incredible is a bold, albeit common, word in Apple's press release vocabulary. And when Apple cited "incredible demand" last year after the launch weekend of the first-generation iPad Mini and the fourth-generation iPad, Apple announced 3 million iPads sold in the first three days and went on to notch a record 22.9 million iPads sold during the quarter, compared to just 15.4 million in the year-ago quarter.
Sure, Apple's iPad Air shipments during the quarter could face challenges, since many consumers may have chosen to wait for the company's iPad Mini with Retina display (which just launched today). But, on the other hand, a much faster rollout for the tablet could offset much of these headwinds. The iPad Air will initially launch in more than 40 countries while the Apple's November iPad rollout last year started in just 34 countries, excluding the massive Chinese market until January.
As is typical for Apple during the initial quarter of a product launch, the iPad Air doesn't seem to be facing any demand issues. Supply constraints are clearly evident. Based on a check on Apple's online U.S. store this morning, all models currently won't ship for five to seven days if purchased today. Also, a call to my local Apple retail store today revealed there were multiple iPad Air models sold out at the store.
And in line with Apple claiming demand for the tablet is "incredible," research from app marketing service Fiksu (via MacRumors) suggests that the initial adoption of the iPad Air was unprecedented; iPad air adoption based on usage statistics could have outpaced last year's fourth-generation iPad and first-generation iPad Mini adoption by five and three times, respectively, during the two days following launch, according to Fiksu. No wonder supplies are limited.
A big quarter looks realistic
So there's incredible demand for Apple's iPad Air, and the tablet remains mostly supply limited. What does this mean for investors? It means Apple's iPad segment likely won't be dragging on the company's first-quarter guidance for bigger revenue numbers than ever before. Sure, the iPad Mini's major supply constraints may hinder the segment's potential, but this is something Apple seemed to expect. The quarter is also very dependent on Apple's massive iPhone segment -- but iPad Air sales don't look like they'll be holding Apple back from its guidance for record revenue.