By Deborah Yao, AP Business Writer
CUPERTINO, Calif. --Apple Inc. said Monday that it sold more than 300,000 iPads on its opening day, meeting the expectations of some analysts while underscoring the challenges the company still faces marketing the much-anticipated device beyond early adopters.
The figures, which included pre-orders that were picked up or delivered Saturday, were hardly exceptional despite weeks of hype about the revolutionary nature of a new class of device that falls somewhere between the phone and computer.
In a research note earlier Monday, Piper Jaffray analyst Gene Munster had doubled his initial forecast of first-day sales to 600,000 to 700,000, saying that “lines were longer than expected and supply was also better than expected.” But the actual numbers announced by Apple were closer to his original estimates.
Still, first-day U.S. sales of the iPad exceeded those of the original iPhone in 2007, he said. He expects Apple to sell 1.3 million iPads in the current quarter compared with the 1.1 million for the iPhone in its first full quarter.
Sales of the iPhone have since picked up, and Apple sold 8.7 million worldwide in its latest quarter. The latest model, the 3GS, sold a million in just three days when it went on sale last summer, initially in the U.S. and seven other countries. Saturday’s iPad launch was in the U.S. only.
Eager customers stood in long lines across the country Saturday to be among the first owners of a device they were expecting to be a game-changer, even if they weren’t quite sure yet how.
Once the initial iPad excitement settles, Apple may have to work harder to persuade a broader swath of people to buy one. Many companies have tried to sell tablet computers before, but none has caught on with mainstream consumers.
Apple essentially must convince people who already have smart phones, laptops, e-book readers, set-top boxes and home broadband connections that they need another device that serves many of the same purposes.
The iPad now on sale, at prices starting at $499, connects to the Internet wirelessly through Wi-Fi. Some people may be waiting for a pricier version that can access the Internet over cellular data connections. That version should be out later this month.
The iPad will also go on sale in other countries starting in a few weeks, though some Europeans made a trip to New York specifically to buy one Saturday.
Kaufman Bros. analyst Shaw Wu, who had estimated that Apple sold 250,000 to 300,000 over the weekend, said the device has the potential to be another big hit in Apple’s arsenal of products down the line with lower prices and better software for the device.
“When the iPhone was first launched, it was also somewhat of a disappointment. … But as the iPhone got more refined, with more apps, better software, not to mention better prices … then you started to see the volumes really take off,” Wu said. “We think the iPad is similar.”
He said checks of the supplier channel shows that Apple notified manufacturers to get ready for possibly 10 million units to be shipped, up from 5 million previously.
Broadpoint Amtech analyst Brian Marshall said the iPad’s weekend sales met his expectations, especially with many stores closed for Easter. He said the iPad’s Saturday sales of more than 300,000 units is about 60 percent of his weekend forecast of 525,000 — a decent showing for a product that has garnered mixed reviews.
“We’re off to a fantastic start,” Marshall said.
But he said the device won’t be overshadowing the iPhone, whose sales he expects to top $20 billion this year, eight times his forecast of $2.5 billion for the iPad.
“It’s really all about the iPhone, but the iPad will generate fantastic sales this year,” he said.
Apple, which is based in Cupertino, also said that iPad owners downloaded more than a million applications and more than 250,000 electronic books on Saturday.
Shares of Apple rose $1.13, or 0.5 percent, to $237.10 in midday trading Monday.
Google Opens Its Defense In Antitrust Case Alleging Monopoly Over Online Ad Technology
Google opened its defense against allegations that it holds an illegal monopoly on online advertising technology Friday with witness testimony saying the industry is vastly more complex and competitive than portrayed by the federal government.
"The industry has been exceptionally fluid over the last 18 years," said Scott Sheffer, a vice president for global partnerships at Google, the company's first witness at its antitrust trial in federal court in Alexandria.
The Justice Department and a coalition of states contend that Google built and maintained an illegal monopoly over the technology that facilitates the buying and selling of online ads seen by consumers.
Google counters that the government's case improperly focuses on a narrow type of online ads — essentially the rectangular ones that appear on the top and on the right-hand side of a webpage. In its opening statement, Google's lawyers said the Supreme Court has warned judges against taking action when dealing with rapidly emerging technology like what Sheffer described because of the risk of error or unintended consequences.
Google says defining the market so narrowly ignores the competition it faces from social media companies, Amazon, streaming TV providers and others who offer advertisers the means to reach online consumers.
Justice Department lawyers called witnesses to testify for two weeks before resting their case Friday afternoon, detailing the ways that automated ad exchanges conduct auctions in a matter of milliseconds to determine which ads are placed in front of which consumers and how much they cost.
The department contends the auctions are finessed in subtle ways that benefit Google to the exclusion of would-be competitors and in ways that prevent... Read More