Apple (AAPL) fanatics lined up outside Apple stores from coast to coast Saturday, hoping to get their hands on its hottest new gadget, the iPad tablet computer. At the store in New York's SoHo neighborhood, eager customers arrived early for the product's release, and by midday, the line still stretched around the block.
Youssouf Diallo (pictured), who emerged from the store grinning and clutching an iPad, says: "I bought it for my son, who goes to John Jay College." Diallo is originally from the Ivory Coast but has lived in New York for over two decades.
"He's going to use it in the library," Diallo says, beaming.
Listen to DailyFinance reporter Sam Gustin discuss the iPad on WTOP Saturday afternoon.
Pre-Orders Sell Out
The first iPads cost $499 to $699, depending on options like hard-drive space. Later models will include 3G mobile broadband at a higher price.
One reason that lines may have been long Saturday is that Apple quickly sold out of pre-order units. "A lot of people pre-ordered, but we've had a ton of same-day sales," says a blue-shirt-clad Apple employee named Ed.
Since Apple CEO Steve Jobs introduced the iPad in January, the hype has built up to epic proportions -- even by Jobs's standards. Morgan Stanley analyst Katy Huberty expects Apple to sell as many as 6 million iPads in 2010 alone -- Wall Street's consensus is 3 million to 4 million.
Buying on Faith
Demand was also strong at other New York locations. Needham & Co. analyst Charlie Wolf told The New York Times that during his visit to Apple's Fifth Avenue store, "customers were awed by their first encounter with the product."
"Weekend sales will exceed 300,000 units, and they might approach 500,000, although that's a stretch depending as much on the initial production run as initial demand," Wolf says.
Many buyers seem to be purchasing the iPad on faith alone. By now, Apple has had such success with the iPod and the iPhone that users have come to expect magic from the company.
Can Momentum Be Sustained?
Along with those purchasing gifts, like Diallo, the first wave of buyers are clearly Apple fanatics and "early adopters," who represent about 15% of the population, according to analysts. These people tend to be younger, wealthier, and more tech-savvy than other consumers.
Wolf says time will tell whether Apple can sustain the sales momentum.
"The iPad launch says less about the ultimate success of the iPad and more about the role Apple is playing in our culture," Wolf notes. "Once normalcy returns, it will be up to software developers and content creators to turn the iPad into a cultural phenomenon, much like the iPhone that preceded it."
If those early adopters have a positive reaction to the product, word of mouth may spread, driving another wave of sales. History will judge whether the iPad lived up to the hype. But one thing's for sure: Judging by the grin on Diallo's face, Steve Jobs has made him a very happy man.