Apple Inc. (NasdaqGS: AAPL - News) will kick start sales of iPad2, its second generation tablet computer with additional features this afternoon. Enthusiasts can also order for the iPad2 online from 1 am PST onward, well before it goes on sale from 5p.m local time at various Apple outlets in the United States. The iPad 2 will also be available for sale on Apple’s website from 4a.m.
From Friday onward, the iPad2 will not only be available at carriers AT&T (NYSE: T - News) and Verizon Wireless (NYSE: VZ - News), but also in Best Buy (NYSE: BBY - News), Target (NYSE: TGT - News) and Wal-Mart (NYSE: WMT - News) stores.
?Apple sold over 300,000 iPads on the very first day of its launch in April, 2010. It sold more than 15 million in the first nine months of its launch, which included 7.3 million to holiday shoppers during the December quarter.
The new iPad2 comes with essentially the same appearance but with some functional improvements from its original version. The most significant of these is the two-way camera system, including the front facing VGA camera and the rear-facing camera that captures 720p HD video facilitating video conferencing. It also has the Photo Booth software for capturing video and still images. ?
The speed enhancement is also significant, with the new A5 processor chip expected to be nine times faster and deliver superior graphics performance.
However, the price tag remains the same at $499 to $829, depending on storage space and cellular connectivity. The 16GB model is priced at $499, 32GB model will cost $599 and the 64GB model (only for the Wi-Fi model) will dent your purse at $699.?
The other model with both Wi-Fi and 3G will be available at $629 for 16GB, $729 for 32GB and $829 for 64GB. From March 25, 2011, Apple will begin shipping iPad 2 overseas, reaching out to 26 countries including the U.K., Germany and Japan.
The iPad2 comes with a LED-backlit LCD touch screen that measures 9.7 inches (25 cm) and weighs a mere 1.3 pounds, which is at least 15.0% lighter than the previous version. The iPad 2 is only 8.8 millimeters thick making it 33.0% thinner than the original version.
iPad 2 is available in two colors, black and white and ?comes with iOS 4.3, the latest version of Apple’s mobile operating system, with new features including Safari mobile browsing performance, iTunes Home Sharing and AirPlay. There are 65,000 apps specifically made for the iPad available at the Apple app store.
Our Take
Competition in the tablet market is heating up as several new companies are flocking to the market with their impressive product line up. Apple already competes with Dell Inc’s (NasdaqGS: DELL - News) Streak, Samsung’s Galaxy Tab, Toshiba’s SmartPad, as well as Acer and Lenovo. Most of these tablets are based on Google’s (NasdaqGS: GOOG - News) Android OS. Additionally, Motorola and Research in Motion (NasdaqGS: RIMM - News) are all set to join the bandwagon with their Xoom and PlayBook, respectively
Apple is determined to protect its share in the tablet market through iPad 2. The aggressive pricing, with the start-up model at $499 appears much better than Motorola’s Xoom, which is priced at $800.
We continue to believe that Apple will outperform its peers given its strong iPad and iPhone sales and new product launches. The company is expected to benefit immensely from iPad2, the new version.
Thus, we have an Outperform rating on Apple over the long term. Currently, Apple has a Zacks #2 Rank, implying a short-term Buy rating.
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