Long Lines, Strong Sales For iPad 2

Long lines stretched around the block at Apple's fifth avenue store in New York City and elsewhere across the country as the iPad 2 saw strong sales its first weekend.

From the time it went on sale on Friday at 5 p.m. eastern, through Sunday, the iPad 2 was flying off the shelves. According to multiple analysts, Apple's latest tablet devices have already sold 500,000 iPad 2 units in the few short days it has been out.

Pipar Jaffray analyst Gene Munster and his team conducted a comprehensive survey, walking the lines in New York City and Minneapolis, and calling up several retailers. He said compared to last year's opening weekend sales of 300,000, this year's iPad has already sold 400,000 to 500,000 units. He said 70 percent of the buyers were people getting a new iPad.

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. As the user base grows Apple's lead widens, and the company has a proven track record of building unmatched brand loyalty, which we believe will be a potent combination as the tablet market evolves, Munster said in a note.

Munster said the number could have been much higher, as most retail outlets reported their stocks were depleted by Saturday. Thus, most of the day Sunday, stores had to tell consumers that the iPad 2 was sold out. Another analyst, Deutsche Bank analyst Chris Whitmore found a similar sell out rate for the iPad 2.

Our checks pointed to a shocking 100 percent stock out rate across Apple/authorized retail stores just a few hours into the official launch Friday evening, contributing to what we believe was one of the company's most successful product launches to date, Whitemore said in a note.

Wedbush Securities analyst Scott Sutherland said the numbers might be even higher. We would not be surprised to see Apple sell closer to 1 million iPad2s in the opening weekend, Sutherland said in a note.

If Apple's shipping dates are any indication, the iPad 2 has also sold a lot online as well. Currently, Apple is saying a new iPad will ship in 3-4 weeks. Usually the turnaround time is no more than two weeks.

According to the Pipar Jaffray report, iPad 2 buyers were split down the line between Mac and PC users, as compared to last year when it was mostly Mac fans. Most users are planning on buying the Wi-Fi only version, compared to the Wi-Fi and 3G version.

Apple did not respond to an inquiry for comment.

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