Apple Adding Production Capacity To Deal With iPad Demand

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Apple was taken aback by high initial sales for its iPad tablet PC and plans to add capability to deal with demand

Apple chief operating officer Tim Cook suggested during the company’s April 20 earnings call that sales of the iPad had exceeded the company’s internal predictions, and that more capacity would be added to deal with demand.

Cook also confirmed that the iPad had been priced “aggressively” in order to help establish a beachhead in the nascent consumer market for tablet PCs: “We want to capitalise on our first mover advantage as we’ve done in other products.”

Apple is apparently “adding capability and we will see where this thing goes,” Cook added. “It has shocked us, the amount of demand, at least initially.”

No Comment On iPhone 4G

But Cook also declined to comment on any future Apple products, whether it be future editions of the iPad with the much-rumored camera module, or else additional news on the purported “iPhone 4G” prototype that recently leaked into the wild: “We’re just not going to help our competitors, so I’m not going to answer [that] for you. We’re very confident in our new product pipeline.”

Strong sales of Macs and iPhones helped boost Apple’s revenue to $13.50 billion (£8.7bn) for the second quarter of fiscal 2010. Helping drive those numbers were sales of 2.94 million Macs and 8.75 million iPhones. Sales of iPods declined year-over-year by 1 percent, to about 10 million units for the quarter.

AT&T, the exclusive carrier of the iPhone in the United States, hinted about new “product refreshes” during an 21 April conference call with investors, which could possibly be construed as a reference to a new iPhone in June. AT&T activated 2.7 million iPhones during this quarter.

Unsurprisingly, Apple executives on the 20 April earnings call indicated that they were pleased with those results. Those executives also declined to break out any financial numbers for the iPad, despite the company’s lack of shyness in quoting first-day and first-week sales.

500,000 iPads Sold In First Week

In a press release, Apple claimed 500,000 iPads sold during the week following the 3 April release. Additionally, CEO Steve Jobs claimed during a 8 April news conference that 600,000 iBooks and 3.5 million applications had been downloaded to WiFi-only versions of the iPad.

Apple plans on releasing the 3G-enabled version of its iPad into the retail channel on 30 April. The iPad’s international pricing and pre-order availability is scheduled for unveiling on 10 May, and the device will be available in nine countries—including Australia, Canada, France, Germany, Italy, Japan, Spain, Switzerland and the United Kingdom—by the end of May.

The 3G-enabled iPad sells at roughly a $130 premium in the US over the WiFi-only version, with the 16GB iPad with 3G retailing for $629, the 32GB for $729, and the 64GB for $829. Although customers who pre-ordered early will receive their iPads on April 30, those who purchase now will need to wait until 7 May for their device to ship.

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