Apple’s iPad 2: The waiting game ahead of a potential sales boom

Apple’s iPad 2:

The waiting game ahead of a potential sales boom

By Larry Dignan | February 23, 2011, 7:50am PST

With Apple’s iPad 2 event reportedly set for March, analysts are scurrying to predict how many tablets the company can sell.

Barclays Capital analyst Ben Reitzes takes the first crack at guesstimates:

iPad 2 shipments are likely still on track for an April release with Apple having finalized the iPad 2 design and specifications in February. We continue to believe Apple will launch the iPad with an event in March. We expect iPad sales will increase significantly in 2011, benefiting from a major upgrade that features a thinner and lighter design, along with cameras and FaceTime calling. Our iPad unit estimate for calendar first quarter is 5.1 million, which takes into account seasonality after the holiday buying season and a potential lull before iPad 2 ships in April. Long term, we estimate 28.8 million iPad units for fiscal year 2011 (33.7 million for calendar year 2011) and 40 million for FY12 (42.1 million for CY12) which are likely quite conservative.

Others are likely to follow. But one thing is clear: Apple’s iPad 2 is expected to really scale the company’s sales.

The only wild-card here is Android tablets. So far, Android tablets still can’t hang on price with Apple’s iPad. However, analysts say that Android tablets are quickly going to be commoditized and that means prices are going to fall. When unsubsidized Android tablets hit the $399 mark then you’ll see some competition for Apple.

Don’t think you’ll get those prices? Jefferies analyst Peter Misek isn’t so sure. He highlighted a tablet from Malata, a Chinese white box manufacturer, that featured a Honeycomb tablet with Nvidia’s Tegra 2 chip. Malata will launch this tablet in the second quarter in China and Italy, but it will make it to the U.S. “Malata’s solid product illustrates that Honeycomb will quickly commoditize Android tablets,” said Misek. “In the near-term, handset OEMs are in the lead due to PC OEMs and the PC supply chain having less experience purchasing and integrating key tablet components (NAND, mobile DRAM, ARM chips, etc.).”