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iPad 2: Sales, Costs & Better Games

Dan Jones
LR Mobile News Analysis
Dan Jones, Mobile Editor
3/14/2011

The Apple Inc. (Nasdaq: AAPL) iPad 2 had a blow-out sales weekend, even if analysts can't quite agree on how many were actually sold.

Apple's second tablet went on sale Friday afternoon, with eager consumers lining up for the new device. Analysts estimate that iPad 2 was sold out in shops by Saturday.

They say

  • Piper Jaffray & Co. analyst Gene Munster tells Fortune that the vendor sold up to 500,000, and his team estimates that the device was sold out by Sunday. Seventy percent of iPad 2 buyers were new to the iPad, the analyst team found surveying potential customers waiting in line in New York City and Minneapolis.

    Other analysts are even more bullish in their predictions. "We would not be surprised to see Apple sell closer to 1 million iPad 2s in the opening weekend," Wedbush Morgan Securities analyst Scott Sutherland told Reuters.

    That's a fairly wide margin between the estimates. "Pretty big gap there, fellas," as Eric Zeman of Phone Scoop notes on his Twitter feed.

  • Just what Apple pays for the new A5 processor in its iPad 2 is also up for debate. Our sister unit, UBM TechInsights , discovered Saturday that the chip was built for Apple by Samsung Corp.

    Analysts at IHS iSuppli estimate that the chip costs 75 percent more than the A4 used in the iPhone and original iPad:

      The A5 processor, whether produced by Samsung or another foundry, is based on Apple’s own designs. Apple owns the intellectual property, and as such, whoever builds the A5 processor for them is doing so as more of a foundry service -- like a contract manufacturer -- which gives Apple a huge competitive cost edge on the piece price of these processors. At $14, the A5 processor costs 75 percent more than the current A4 processor. The cost of this processor is expected to erode quickly over the course of the next year as Apple ramps production.


  • It appears, meanwhile, that the iPad 2 could make inroads into the games console market in much the same way as its predecessor took a bite out of netbook market share. The Digital Trends website notes that the dual-core A5 offers up to nine times the graphics processing performance of the original device, opening the door to a new wave of games.

    "Apple’s A5 processor chip could be very interesting for games," said Baudouin Corman, vice president of publishing, Americas, Gameloft tells the site. "The dual core means faster load times, higher frame rates, better draw distances and more impressive effects such as radial motion blur, real time reflections and shadows. Overall, the gaming experience will just be better."

    We say
    Check out our game-day coverage of the iPad 2 launch:

  • Samsung-Built Chip Powers iPad 2
  • The NYC iPad 2 Update
  • The ChiTown iPad 2 Update
  • iPad 2: Cable Friend or Foe?
  • iPad 2: Data Hoggin' Restricted to Wi-Fi
  • Apple, Verizon & AT&T Confirm iPad 2 Details

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