Unnamed sources told DigiTimes Wednesday that Apple took delivery of an estimated 2.4 million to 2.6 million iPad 2s in March. The Taiwan-based electronics industry newspaper also reported that unnamed parts suppliers expect Apple to take delivery of an estimated four million to 4.3 million iPad 2s per month through the end of June.
The touchscreen makers in Apple's iPad 2 supply chain are reportedly racing to expand their production capacities to keep up with demand. The goal is to be able to produce enough parts for Apple to ship an estimated 12 million iPad 2s in the second quarter.
If correct, the numbers coming out of Taiwan would dramatically exceed analysts' expectations. "We are at 5.5 million iPads in the March 2011 quarter and at 5.6 million iPads in the June 2011 quarter," noted Piper Jaffray analyst Andrew Murphy Wednesday in an e-mail. "So the DigiTimes numbers are higher than our June 2011 quarter estimate."
Rising Teen Interest
Late last month, Piper Jaffray's analysts noted the long lead times at Apple's online store when the iPad 2 launched in 25 countries on March 25, suggesting strong demand worldwide. Moreover, U.S. demand for the iPad 2 likewise exceeded expectations.
"Never before have we seen lines as long or as persistent as the iPad 2 lines at U.S. Apple stores," noted Piper Jaffray analysts Gene Munster, Michael Olson, and Andrew Murphy in a report last month. "Given strong demand and improving supply, we believe our estimate of 5.5 million iPads in the [first] quarter could be conservative."
A new Piper Jaffray report released Monday demonstrates that interest in Apple's iPad 2 and iPhone is also on the rise among teenagers, with 37 percent of the 4,500 students surveyed indicating they expect to buy an iPhone in the next six months. What's more, 20 percent said they expect to buy a tablet during the same period.
"We believe the teen demographic is a critical component of long-term growth in the mobile market, and Apple is taking its lead in music and leveraging it in the mobile category," Munster, Olson and Murphy explained. The analysts also see rising interest in tablets among teenagers as "a positive for Apple, given the iPad's dominant position in the tablet market."
And according to a Piper Jaffray survey of recent iPad 2 purchasers, Apple is continuing to expand its base of iPad users overall, with 70 percent of the iPad 2 buyers surveyed being new customers. "We believe this shows Apple is expanding its base of iPad users, which is critical to maintaining its early lead in the growing tablet market," Munster, Olson and Murphy said.
The Main Constraint
IDC forecasts that 44.6 million media tablets will ship worldwide this year, with the U.S. representing nearly 40 percent of the total. Although more competing tablets are slated to launch later this year, the firm's analysts expect Apple to maintain a 70 to 80 percent share of the market, which equates to 31.2 million to 35.7 million units for the entire year, or between 2.6 million and 2.7 million iPad shipments per month.
According to Piper Jaffray, the main constraints on Apple's iPad 2 sales in the months ahead are likely to be supply-side issues -- especially those that arose in the wake of Japan's horrific earthquake and tsunami last month.
"We believe the constraints caused by shuttering Japanese manufacturing facilities will cause a temporary supply disruption through the June quarter," Munster, Olson and Murphy noted last month. "But we also note that demand is stronger than ever."
One mitigating factor is that Apple buys key components in advance and makes large pre-payments that guarantee both supply and pricing. "This strategy may prove particularly helpful if supply is limited and pricing increases," Munster, Olson and Murphy noted.
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