Can Apple's iPad spur economic recovery?
Sales of Apple's iPad are strong. If they skyrocket, they may herald a faster-than-expected recovery.
The gadget is billed as a breakthrough. Born in the deepest recession since the Great Depression, it becomes a must-have. Americans snap up so many of them that suppliers run short and a high-tech boom is born.Skip to next paragraph
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That was the IBM PC in 1983. The boxy personal computer became an office staple, a household buzzword, and an icon of how a battered economy reinvents itself and moves powerfully forward.
Will Apple’s iPad do the same for today’s economy?
The snazzy tablet computer is already getting accolades and, so far, flying off the shelves. Usually, high-tech sales and the larger economy are loosely related. People buy fewer gadgets when times are tough, but breakthrough products transcend their economic times and keep on selling. On rare occasions, a boom in the product signals great times for the economy.
For that to happen with the iPad, both it and the economy will have to outperform expectations by significant margins.
“For many consumers, the iPad is a ray of sunshine on a dark day,” says Sarah Rotman Epps, an analyst for Forrester Research in Cambridge, Mass. But “the iPad is a specialized device. It’s not a phone. It’s not a laptop. There’s a learning curve for consumers to understand why they’ll need to have it.”
Apple’s new tablet computer is certainly off to a strong start: 300,000 iPads sold on its first day (April 3), 500,000 in its first week. One of them helped Norwegian Prime Minister Jens Stoltenberg stay in contact with his government on April 19 as volcanic ash from Iceland kept him from flying back home from the United States.
Apple itself is booming, announcing record profits and revenues for the last quarter of 2009 and following it up with strong results in the first quarter of this year, mostly on sales of its popular Mac personal computers (up 33 percent from last year’s second-quarter results) and -iPhones (up 131 percent).
If analysts are right, the iPad should sell somewhere around 5 million units this year, a forecast that is robust but certainly not chart-topping. An InfoWorld survey found that about 6 percent of consumers planned to buy one within a year, a rate that would suggest sales of 7 million.