Apple's iPad goes global

LONDON/PARIS Fri May 28, 2010 10:12pm BST

1 of 11. Hans-Henrik Duessel from Svendborg, Denmark, displays his old Apple Macintosh Classic computer from 1990 beside his newly purchased Apple iPad after being among the first to purchase the new device during an iPad launch event at the Apple retail store in Hamburg May 28, 2010.

Credit: Reuters/Christian Charisius

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LONDON/PARIS (Reuters) - Fans mobbed Apple Inc stores in Europe and Asia as the iPad went on sale outside the United States on Friday, with some shoppers having queued all night to buy one of the coveted tablet computers.

The device, a little smaller than a regular notebook computer and with an open, color touchscreen, is designed for surfing the Web, watching movies and reading, and has been hailed by the publishing industry as a potential life-saver.

Shares of Apple, which also makes the iPod and iPhone, jumped as much as 2.3 percent before settling back to end the session up 1.4 percent, outpacing a sliding market. Analysts said Wall Street had already priced in a big launch.

The iPad's debut sets the stage for Apple to possibly unveil the latest version of its iPhone. Chief Executive Steve Jobs -- keeping up a hectic public schedule after undergoing a liver transplant last year -- is expected to reveal a new iPhone with multi-tasking features on June 7 during an annual developers' conference.

Apple sold a million iPads in the United States in the first month after its April 3 debut, exceeding the most bullish pre-launch estimates. Demand was so heavy that the company delayed the international launch.

RBC Capital Markets estimated iPad's total shipments will reach 8.13 million units worldwide by the end of the year -- which would translate into at least $4 billion of revenue.

"I wanted to touch it as soon as possible. I felt real excitement when it was finally in my hands," said Takechiyo Yamanaka, 19, who had camped out in front of Tokyo's flagship Apple store from Wednesday evening to be the first in line.

"It's a bit of a gut decision, an emotional decision, because it's not really rationally justifiable," said Anna Kistner as she emerged from the Apple store in Munich, Germany with two iPads. "It's a lot of money."

The iPad is now on sale in Germany, France, Italy, Switzerland, Spain, Britain, Japan, Australia and Canada.

Prices for the cheapest, Wi-Fi-only version range from $499 in the United States to the equivalent of $617 in Britain.

The buzz around the iPad helped propel Apple past Microsoft this week to become the world's most valuable technology stock, marking a remarkable turnaround of a company that nearly went out of business in the 1990s.

CREATING A NEED

Apple now gets almost three-fifths of its revenue outside the United States, and it is counting on its base of fans who already own an iPod, iPhone or Mac to add the iPad to their collection as rivals line up with their own tablets.

Analysts said Friday's muted stock reaction came after a build-up of anticipation ahead of the international roll-out, which will be followed in July with launches in about another nine countries, including Hong Kong and Singapore.

On Friday, Bank of America-Merrill Lynch raised its price target on Apple to $325 on hopes of better-than-expected sales of the iPhone and the iPad, plus better margins on the tablet than Wall Street is expecting.

Some analysts highlight concerns that Apple, which contracts out the production of the device and depends on numerous parts suppliers, may have trouble satisfying the surge in demand, driving buyers elsewhere. Dell's Streak tablet computer will go on sale next month in Britain. Sony Corp and Hewlett-Packard also have tablets in the works.

The iPad -- like other tablets -- may rely on a greater proportion of novel components that are not commoditized, potentially making a ramp-up of production more difficult, analysts say.

But "Apple has traditionally been pretty good about overcoming these constraints in time," said Oppenheimer's Yair Reiner. "The question is, will there be a point where it will lose sales? For that to happen, companies with have to come up with products that are comparable."

Just ask Pascal Lordon, among the first in line at the flagship Apple store beneath the Louvre in Paris. He already has all Apple's products and described himself as a big fan.

"The iPhone created a new need, but the screen is small. The iPad is more comfortable -- it has a real screen," said the 51-year-old, who works in video editing.

Others were less manic about the Apple brand.

"I'm not going to buy the iPad now as it's expensive. And I'm a Sony fan," said Kengo Nakajima, a 19-year-old college student who waited in line with his friend Yamanaka at the Apple store in Tokyo's Ginza shopping district.

Amazon, whose Kindle e-book reader is seen as a rival to the iPad, said it would be offering its Kindle iPad application in all countries where the iPad was now on sale.

Analysts at research firm Informa Telecoms & Media believe most iPad sales would be of Wi-Fi only models, citing the limited case for outdoor usage, higher prices for 3G models and the ability to tether the iPad to a mobile phone as reasons.

At London's Apple store, a circus-like atmosphere prevailed.

"Jake! Jake! Jake!" store staff chanted as Jake Lee, a 17 year-old student who had waited 20 hours, entered.

British actor and technophile Stephen Fry said Apple had proved the skeptics wrong. "Whenever Apple comes up with a new product, the initial response ... is always negative, because no one can quite believe it can happen again," he told Reuters.

Apple has yet to announce a launch date for mainland China, which could prove a much more difficult market to crack. Bootleg versions of the gadget are being snapped up online and in retail malls in the piracy-prone country.

Retailer Best Buy said it was restricting sales at its two British outlets to one iPad per household.

Michito Kimura, a senior analyst at IDC Japan, said the test would come after the honeymoon period.

"The real game will start after 'core users' have the devices. I imagine a price cut may be necessary before the Christmas holiday season to stimulate demand."

(Additional reporting by Alexei Oreskovic and Edwin Chan in San Francisco, Jens Hack in Munich, Valle Aviles in London and Nobuhiro Kubo in Tokyo)

(Writing by Georgina Prodhan; Editing by Hans Peters, Steve Orlofsky and Robert MacMillan)

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