Braving rain and cold, eager customers lined up on Friday outside Apple Inc.‘s (NASDAQ: AAPL) retail store on Fifth Avenue in New York to purchase the iPad 2, which officially went on sale at 5 p.m. Eastern Time.
The line stretched around the long city block, matching the huge line from last April, when the first iPad became available. The thinner and lighter iPad 2 has attracted buyers because of its faster performance and new features such as back and front cameras. Canadians will have to wait until March 25th to get their hands on the new iPad north of the border.
“I knew this second one would have cameras,” said Jay Narang, a student and New York resident who was 460th in line and had been standing for more than three hours.
Narang originally planned to order the 16GB black iPad 2 online, but worried about the potential for shipping delays. Instead, he decided to stand in line to buy one as quickly as possible.
The smaller size and camera are big features for Nagahisa Kubota, who was visiting from Japan and standing in line.
“Maybe I can use FaceTime or Skype now,” Kubota said.
Narang and Kubota are new iPad buyers and waited for Apple to work out bugs from the original iPad. Narang said he expected a second iPad to come fairly soon after the first and decided to wait for it rather than invest in both versions.
In Boston, many of the approximately 100 Apple fans who waited outside the Apple store ahead of the launch already owned the original iPad. A few were able to sell the first iPad for half or more of what they paid.
Paul Pezone paid US$829 for his original iPad and was able to sell it for $650.
“I was an iPad 1 owner and I absolutely loved it, but I’m also a huge gamer. The thought that the graphics are nine times faster [in iPad 2] has huge potential for future gaming apps,” Pezone said.
The iPad 2 is a substantial upgrade over its predecessor. The tablet has faster hardware, including a dual-core A5 chip running at 1GHz and a graphics core that can render full high-definition 1080p video. It provides 10 hours of battery life, the same as its predecessor.
The tablet is 8.8 millimeters thick, compared to the 13.4-millimeter thickness of the original iPad. Prices for the tablet start at $499 and extend to $829. Storage capacity ranges from 16GB to 64GB, and the tablet comes with Wi-Fi and 3G mobile broadband options.
But with Android tablets such as Samsung’s Galaxy Tab and Motorola’s Xoom now available, the iPad is facing much more competition. vNarang, who stood in the New York line, was not interested in buying an Android tablet because of high prices and bad reviews.
Beyond the die-hard fans lined up outside Apple stores, some potential tablet buyers are still weighing their options. Tablet buyers want features such as an SD card slot and Flash support, which are not included in iPad 2.
Lorrie Jollimore, a graphic designer and Web developer who lives in Canada, is skipping the iPad 2 and may consider Android tablets.
“As enticing as the new iPad 2 is, still no plans to buy. I may wait until fall to see what’s on the market then,” Jollimore said.
Analysts have said that the new features bring the iPad 2 closer to a laptop, which could help tablets bite further into PC shipments. Forrester Research has predicted sales of 24 million tablets in the U.S., with Apple holding an 80 percent share. Doug Reid, a financial analyst with Stifel, is projecting worldwide tablet shipments to reach 58 million units this year, with Apple holding a 53 percent market share.
Tablet shipments totaled 10.1 million units during the fourth quarter of 2010, with Apple holding a 73 percent market share, according to research firm IDC. The iPad’s primary competition during the quarter was Samsung’s Galaxy Tab, which held a 17 percent market share. The rest of the market was made up of “smaller regional players,” IDC said.