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

Fri Mar 25, 2011 6:46am EDT

 * Newest Apple iPad goes on sale in 25 markets Friday
 * Concerns about supply of popular device remain
 * Unclear how Japan supply constraints will impact
availability
 * Some key iPad parts come from Japan, no signs of impact
yet
 * But some disruption seen possible from chemicals - analyst

 (Adds more customer comments)	
 By Amy Pyett and Gyles Beckford	
 WELLINGTON/SYDNEY, March 25 (Reuters) - Hundreds of
customers formed long lines outside Apple stores on
Friday for the international launch of the iPad 2, which has
flown off the shelves in the United States and left the company
struggling to meet demand.	
 Analysts forecast some 1 million devices may have been sold
in the first weekend of the U.S. launch, but many warn that it's
not clear how supply constraints will affect availability after
an earthquake and tsunami damaged Japan's tech industry.	
 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.	
 The international launch kicked off in New Zealand, then
Australia, and will be rolled out in other countries including
France, Britain, Denmark, Germany, Italy, Netherlands, Spain,
Canada and Mexico.	
 "Fantastic, my sister will love it," said Alex Lee, a
Canadian backpacker clutching an iPad 2. He was first in line
after queuing for two nights outside the Apple store in Sydney's
central business district.	
 "If it wasn't for the iPad, I wouldn't be in Australia right
now," said Lee, who had already bought an iPad 2 in the United
States. "It's like a habit. I've also lined up on Regent Street
in London for the iPhone."	
 	
 Apple Chief Executive Steve Jobs said on Tuesday the company
was "working hard to build enough iPads for everyone" as the
company struggled to meet U.S. demand.	
 Fiona Martin, a spokeswoman for Apple in Australia, declined
to comment on whether there was enough stock to meet demand but
tried to allay supply concerns.	
 "We've got plenty down there for all those folk that are in
the queue," she said.	
 The first iPad, which went on sale a year ago, sold 500,000
units in the first week and crossed the 1 million unit mark in
28 days. Nearly 15 million iPads were sold in nine months of
2010, two or three times as many as analysts had predicted.	
 Analysts expect the company to sell 30 million or more this
year, generating close to $20 billion in sales, even as other
companies launch their own devices.	
 Apple staff in Sydney handed out sandwiches to those in the
queue, while in Perth staff handed out water, ice cream and sun
block against temperature expected to reach 36 Celsius.	
 However, in Helsinki, where the iPad 2 goes on sale in a few
hours time, snow and temperatures around minus 3 Celsius
appeared to be putting potential buyers off from forming queues
just yet.	
 Myles Jihme, a student from Malaysia, waiting outside the
Apple store in Sydney said he intended to buy two iPads, the
maximum allowed by Apple, and would auction one for charity.	
 "All the profits from the sale will go to Japan's disaster
fund," he said.	
 In Asia, the iPad 2 will be officially available in Hong
Kong, South Korea, Singapore and other countries in April.	
 	
 JAPAN SUPPLY WOES	
 After opening the tablet market with its iPad 1, Apple faces
increased competition as rivals sramble to try to catch up.	
 Samsung Electronics and Motorola have tablets on
the market and Blackberry-maker Research In Motion and
Hewlett-Packard Co release rivals in coming months.	
 Analysts are also 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.	
 The country is at the heart of several industries and the
impact has already been felt in the supply chains of sectors
including autos, telecoms and electronics.	
 Several key components in the new version of the iPad 2 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.	
 Analysts say it's too early to gauge the extent of component
supply shortages, while 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 any shortages have not reached critical
levels.	
 "The quake will have an effect on supplies of the iPad,
since some parts come from Japan," said Akira Minamikawa, Vice
President at iSuppli in Tokyo.	
 "It's too early to say how far production will be affected.
But there are a number of iPad parts manufacturers, including
Toshiba and Hitachi for LCD panels, while Toshiba also makes
flash memory."	
 In Taiwan, the CFO of TPK Holdings , a major
supplier of touch screens to companies that include Apple, said
it has had no problems with supplies because it has many
secondary sources outside of Japan.	
 Hon Hai Precision Industry Co , a contract
manufacturer and subsidiary of Foxconn that is heavily reliant
on Apple, said it does not expect near-term supply problems.	
 Most of the Japanese factories that are thought to supply
Apple with parts are situated well away from the quake-hit area,
but supply distribution is expected to be hit by nationwide fuel
shortages.	
 Apple's clout in the supply chain means investors remain
confident - for now - that it enjoys priority and can secure
critical components ahead of competing manufacturers.	
 Still, Apple is unlikely to avoid a hit from the disruption
in Japan, analysts said.	
 "We think the disruption especially for chemical materials
could continue throughout Q2 and when the components become
absent, it's inevitable that Apple would be affected," said
Calvin Huang, an analyst at Daiwa in Hong Kong.	
 "Then we will see a situation that customers will have to
wait for months for an iPad to arrive after placing an order."	
	
 (Additional reporting by Cecile Lefort, Victoria Thieberger and
Rebekah Kebede in Australia, Edwin Chan in Los Angeles, Clare
Jim in Taipei, Isabel Reynolds in Tokyo and Jussi Rosendahl in
Helsinnki; Writing by Ed Davies and Dhara Ranasinghe; Editing by
Vinu Pilakkott and Neil Fullick)	
 
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Comments (1)
DaveC99 wrote:
Why do you keep publishing the untrue and unconfirmed report by iSuppli about Apple suffering from its supply shortages? Those not-so-bright analysts at iSuppli were too quick to release numerous news reports before even talking to Apple and its suppliers and had never verified the “assumed” information in the first place. They were only making up stuff based on what they saw in the iPad2’s components. How do they know if Apple and its suppliers don’t have reserve stock/supply? Or other plans/alternatives? And it sounds rather suspicious that this same news report keeps coming up since last Thursday and I must have seen it over 15 times already? Very fishy!

Mar 25, 2011 3:21am EDT  --  Report as abuse
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