Apple Inc., which revolutionized the tablet market with its launch of iPad in April 2010, will be reportedly launching its new iPad 2 at an event in San Francisco, California on March 2 with a launch date on early April.

Since the release of iPad, Apple has sold 14.8 million tablets. RBC Capital Markets expects Apple to sell 30 million iPad 2 units between April 2011 and March 2012.

An Apple invitation has been sent to reporters with the image of a corner of an iPad saying Come see what 2011 will be the year of. The event is set to be held at 10 am local time.

The timing of the March 2 event would put the iPad on an annual cycle of updates similar to those of the iPhone and iPod media player, and keep Apple ahead of competitors, Wedbush Securities analyst Scott Sutherland told Bloomberg.

The tablet becomes the next growth starter for the next two years for Apple. The company is releasing a second edition while many competitors are introducing their first tablets, Sutherland said.

The new iPad will initially be available through Verizon Wireless and AT&T Inc. but not Sprint Nextel Corp. or T-Mobile USA in the U.S., the Wall Street Journal reported citing people familiar with the matter.

iPad 2 Shipment

Stock analysis firm Trefis said that the original iPad lacks some of the must have features such as no camera, no OLED display, no removable battery, no multi-tasking feature, no Adobe Flash, no Skype and storage capacity limited to a maximum of 64 GB flash drive. The absence of these features could limit demand for the iPad.

If Apple adds these must have features in the iPad 2, it would be an added advantage to the already strong demand for iPad, leading to higher sales that may exceed its predecessor's.

Apple iPad 2 will be shipped immediately and its initial shipments are expected to be in the range of 400,000 to 600,000 units, according to Digitimes.

Barclays analyst Kirk Yang said Hon Hai Precision Industry Co., better known by its trade name Foxconn, (not Quanta nor Pegatron) should remain as the exclusive product assembler.

After Hon Hai set up its new production lines with assembly training and component sourcing in Chengdu this March, Kirk Yang expects iPad 2 shipments to start in early April, estimating 2 million units for April.

As Hon Hai's iPad shipments only started days before the actual sales on April 3, 2010, it appears Apple was able to sell iPad as soon as they were made by Hon Hai in April, 2010.

We could again see similar timelines in 2011 with iPad 2 shipments from Hon Hai started in early April. Our channel checks suggest that Apple has finalized the iPad 2 design and specifications in February, said Yang.

Cupertino, California-based Apple first announced iPad on Jan. 27, 2010 in San Francisco with pre-orders started on March 12. Actual sales started on April 3 with 300,000 units sold on the first day. One month later, the sales reached 1 million units by May 3, and 2 million units by May 31, 2010.

For the latest first quarter ended December 25, 2010, Apple sold 7.33 million iPads and generated sales of $4.61 billion. As a result, iPad accounted for 17 percent of Apple's total sales of $26.74 billion.

iPad 2 Features

Yang expects the upcoming iPad to have 2 cameras (front/back, likely 5/2 megapixel resolutions), same size (9.7-inch), same A4 processor, 512MB DRAM (iPad: 256MB DRAM), lighter than iPad of 680 grams, higher storage capacity up to 128GB (iPad: 64GB), and without USB/HDMI ports.

In addition, Apple is said to boost the resolution of iPad 2 to 2048 by 1536, Digitimes reported citing sources from upstream component makers.

The current iPad has a resolution of 1024 by 768 pixels at 132 pixels per inch (ppi), while iPad's closest competitor Samsung Galaxy Tab has a resolution of 1024 by 600 pixels at 169 ppi.

RBC Capital analyst Mike Abramsky discusses expected hardware specifications for the iPad 2 in his note, which include a faster 1.2GHz processor, 512MB of RAM, a rear camera, a front-facing camera for FaceTime video chat and a thinner, lighter case.

Yang maintained his forecast for Hon Hai to ship 5 million to 6 million units of iPad in first quarter of 2011 (all iPad from Shenzhen) and 6 million to 8 million units in second quarter of 2011 (mostly iPad 2 from Chengdu).

We forecast Apple's iPad to account for 11 percent to 12 percent of Hon Hai's 2011 sales, with iPad 2 having better margins than iPad due to lower labor cost and better yield rate/experience. We continue to look for Hon Hai's consolidated operating margin to improve in second half of 2011 after the one-time relocation expense and cheaper labor cost in inland cities, said Yang.

Another Barclays analyst Ben Reitzes believes significant iPad sales growth in 2011, helped by a major upgrade that features a thinner and lighter design, along with cameras and FaceTime calling.

Reitzes said his 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, Reitzes estimates 28.8 million iPad units for fiscal 2011 (33.7 million for calendar 2011) and 40 million for fiscal 2012 (42.1 million for calendar 2012) which are likely quite conservative.

Piper Jaffray estimates iPad sales of 27 million units in 2011, and market is expecting as many as 35 million units.

Stock analysis firm Trefis forecasts iPad sales of 23.7 million units for 2011, 30.8 million units for 2012 and 35.4 million units for 2013.

Trefis expects iPad pricing to decline further in the future, which will benefit its unit sales even more. Market is expecting iPad 2 to be priced in the similar price range as of the current iPad.

iPad Market Share

Although iPad dominates tablet market, its market share will decline to 62 percent of the overall market by 2012 as more competitors enter the market, market research firm iSuppli Corp. said in September 2010.

Recently, Barclays Capital said it still believes the new tablet category (led by Apple iPad) is poised for rapid growth over the coming years. However, Forrester Research believes that Apple will win but not sweep the tablet market.

In addition, Ben Reitzes said he wouldn’t be surprised to see competitors hold off launches until second half of 2011 for the back to school/holiday buying seasons due to iPad 2 launch.

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