Analyst: iPad Off to Strong Start, Won’t Eat into Mac Sales

| Apple Stock Watch

First day iPad sales were off to a strong start, but based on buyers UBS spoke with, Apple’s new multimedia tablet won’t eat into Mac sales, according to analyst Maynard Um.

UBS interviewed about 260 iPad buyers outside Apple’s New York and Boston stores and found that most said they didn’t plan to use their iPad as a replacement for their computer.

“Customers surveyed overwhelmingly indicated that the iPad would not replace their computers (66 percent of respondents),” Mr. Um said. “Based on our survey, we believe the iPad will not cannibalize Macs and view the device as a largely incremental growth opportunity for Apple.”

About 43 percent of those asked said their iPad would serve primarily as a Web browsing, personal entertainment and media viewing device, and only nine percent said the tablet would serve primarily as an ebook reader.

“Although most cited Web browsing, we expect iPad functionality to change significantly over time similar to the way iPhone evolved from the launch,” Mr. Um added.

Apple began selling the iPad on April 3rd. The tablet device includes a 9.7-inch multi-touch display, support for most iPhone apps, multimedia playback support, an ebook reader, built-in Wi-Fi and Bluetooth connectivity, and models scheduled to ship at the end of April will include 3G wireless data access, too.

Mr. Um is maintaining his “Buy” rating and US$280 target price for Apple’s stock. Apple is currently trading at $235.72, down 0.25 (0.11%).


Pramesh G

Steve Jobs clearly told, when announcing the product, that iPad would be something in between. So, that means, it should supposedly have some qualities of a Laptop and some qualities of Phone ? smartphone rather. So, I would not be surprised if you cannot make a call with iPad or you can not type on iPad like the way you do on Laptop.

Clearly, Apple would not like to kill their own iPhone or Macbook. If iPad could substitute for iPhone and Macbook, then they would be killing their own other products.


Obviously Apple doesn’t intend the iPad to eat into its mac or iPhone sales.  Therein lies the problem; those who have a laptop and a smartphone have little need for an iPad.  The iPad is targeting people with one and not the other, but many people who fall into this target demographic also lack the discretionary spending to drop $500+ on a device that lacks features of a netbook/laptop AND lacks voice capabilities of a smartphone.  The only real consumers of this product will be wealthier people looking for another “toy”.

Mr. Um’s target price of $280 (albeit better than the $300+ target of other analysts) is still too high as will be shown in the forthcoming months.

On the other hand, if Apple were to drop the price of the iPad to the sub $300 range, they would sell faster than McDoubles on the dollar menu.


Apple brought the iPad in at HALF the price that was expected. And in 12 hours, sold 300,000 units.

And some people just either don’t read and study or even pay attention. Price is NOT what Apple is about. Their computer business is still growing, despite the often heard complaints about how expensive the hardware is (and ignoring the you get what you pay for mantra that has put Dell totally into the basement!).

So, let’s examine this a bit further. $499 for a 16 Gig device that blows away the Kindle and Nook, neither of which have color screens. It weighs 1.5 lbs, HALF the weight of the MacBook Air. Has different options for wireless network service. Plays audio and video. Has a lockable screen position. And is everybody forgetting it’s a PORTABLE video screen? Drop a PPT presentation onto it in Keynote and you can use it for point of sale presentations. Just wait till it get’s BUMP. I can see waiters and waitresses allowing customers to BUMP their iPhones to the iPad to pay their bills. Don’t think I’m kidding. That’s already in the works.

And hospital medical charts…assign one to a patient when they check in and voila, the staff can use it to chart everything for the patient.

How about college students and their schoolbooks? Would you rather carry one 1.5 lb multi-use device, or a backpack weighing 40-50 lbs for your biology, math, english and foreign language text books? Not to mention you could load up your foreign language lab modules and run your lab work.

There is SO much untapped potential with the iPad and yet so many who are willing to dismiss it for what they see today. Look past the end of the nose and there is a whole world out there.

It sure wasn’t easy for Apple to do this. If it had been, the myriad other tablets that have come and gone would have succeeded.

And that is the difference. Apple doesn’t cheap out. They want it to work and keep their customers coming back. Sounds like a good strategy doesn’t it? I guess that’s why their stock reached $237 per share today and isn’t languishing back at $15 like some of their competitors in the hardware business.


Oh, and not to forget the whole aftermarket of accessories, it’s highly likely that devices that currently are iPod/iPhone compatible will also work with the iPad.

So, use this and stream your music from your iPad to your car or stereo.

What a steal. The company retails it for $90!


A lot of people are confused about the pad’s target market. It is not existing Mac users, Kindle users, Businesses, Wintel NetBook or Notebook users. People from those categories will constitute less than 10% of the iPad’s base.

The iPad’s market is the people who never had a computer before. There are over a hundred million of them in the US alone plus three billion through out the world.

Log in to comment (TMO, Twitter or Facebook) or Register for a TMO account