Much ado about the iPad 2

The iPad 2 tablet PC has officially gone on sale in local stores today, and the device is expected to continue to cement Apple's dominance in the tablet market.

While the iPad 2 is a refinement rather than a complete makeover of the original, global sales have surprised many analysts who expected the queues to be shorter and demand to be lower this time around.

Despite supply issues, Apple is estimated to have sold between 400 000 and 600 000 devices during the first weekend of its release in the US and Canada. This is compared to the 300 000 original iPads sold over the first few days of release.

Taryn Hyam, communication manager of local Apple distributor Core Group, said after 8am this morning that the queues at local iStores were already “hectic”.

“The Sandton iStore is already full, and we have heard that the same volumes of people are also at the stores in Gateway and at the V&A Waterfront. So, judging by the queues, I think we may sell out.”

The Core Group could not release any figures regarding local stock.

World Wide Worx MD Arthur Goldstuck says there's a lot of excitement surrounding the iPad 2, for two reasons.

“Firstly, how quickly it has come to SA; the fact that we are part of an accelerated Apple rollout strategy, and that it is being launched here at the same time as China is very positive.

“Apple learnt the hard way not to treat us as poor relatives, so we are now seeing a new attitude to the local market,” says Goldstuck. “Pricing is also cause for excitement as it's even cheaper than in Europe.”

Hyam explained that decisions regarding rollout are all made by Apple, but “since SA already had the iPad, it made sense to bring the iPad 2 to the market as soon as possible”.

“It will do well in the local market, but I predict that Apple won't be able to meet the demand. They have had issues with supply even in the US, so we will probably see the same problems,” says Goldstuck.

He adds, however, that local hype definitely isn't matching the international hype that surrounded the unveiling of the device.

“I can't see people queuing up outside stores in this country - we just don't have that mentality here. Also, those who wanted to be the first to have the iPad 2 would have already either ordered online via sites like Have2Have, or even purchased it themselves in the US or elsewhere.”

Hyam, however, says, in light of this morning's queues, the excitement can be attributed to the general hype that has surrounded the iPad.

“I think that once people have the hands-on experience with an Apple device, they realise how user-friendly it is. As they say, once you switch, you never go back.”

A US iPad 2 launch survey showed 70% of customers did not previously own an iPad, which could be said to translate to the fact that people opted to wait for the second-generation device.

“The iPad 2 certainly is in a league of its own. Apple has the competitive-edge of being both the first to market and the market leader when it comes to tablets,” says Hyam.

Goldstuck has openly criticised the Apple tablets in the past, but he says: “As much as I criticise the device, in terms of what it delivers for its price and for how early it has arrived in SA, those who buy it will not be disappointed.

“I do, however, feel that it should not be looked to as a replacement for a PC or laptop, but it can make a wonderful companion device.”

According to a recent report by PricewaterhouseCoopers, consumer surveys have shown that more than just media players and e-book readers, tablets are surprisingly being used in ways that resemble PCs, with users reporting that they use their tablets for Web browsing, e-mailing and messaging and social networking.

Apple reportedly accounted for 74% of the tablet market during the first quarter, and its competitors are still playing catch-up.

Goldstuck points out that, while there are some strong competitors in terms of specs and functionality, pricing remains a major drawback for the likes of the Motorola Xoom and similar contenders.

“Since most of these devices haven't yet arrived in the country, we are yet to have a sense of how the market will respond.”

Samsung has been said to be emerging as the strongest competitor, and analysts speculate that Apple is trying to keep Samsung at bay with lawsuits.

Apple is currently seeking action against Samsung's Galaxy line of mobile phones and tablets for “slavishly” copying the iPhone and iPad.

According to research firm Gartner, slow sales of the Galaxy Tab, coupled with aggressive iPad 2 pricing plans, are pressuring profit growth at Samsung. Samsung's follow-up models are expected to be released in June.

Sony also released its first tablets this week, running Google's Android 3.0, Honeycomb, and the company has ambitiously stated it is seeking the number two spot in the market.

Honeycomb is regarded as the most configurable tablet OS, offering the widest range of hardware choices and, for many, this is a major draw card.

As one iPad user comments: “My one problem with it [the iPad] is accessibility and a feeling of being coerced into a tightly controlled Apple ecosystem.”

Another competitor, Research In Motion (RIM) has not been having an easy time after its disappointing launch of the PlayBook in the US and Canada.

Critics have taken RIM to task for the lack of e-mail capability and the necessity to have a BlackBerry mobile phone to make use of a number of basic functions. Sales figures have also been disappointing as the device seemed to remain on shelves.

Gartner said earlier this month that the iPad will continue to dominate the market for years to come, with Google playing catch-up.

The research firm said it expects 70 million media tablets to be sold this year and 108 million in 2012, compared with just 17.6 million in 2010.

Apple's share of the market will gradually decline to 47% in 2015, from 69% this year, while Google's share will rise to 39% from 20% now, it said.

iPad shipments were reportedly down 31% sequentially, which analysts attributed to consumers holding off from buying the iPad after Apple's announcement of the arrival of the iPad 2. Analysts say the full impact of the iPad 2 won't be known until future quarters.