iPad 2: The analysts weigh in

Pleased to see Steve Jobs, wowed by the device’s performance, fearful for the competitors

Photo: REUTERS/Beck Diefenbach

A sampling of analysts’ reactions to Apple’s (AAPL) iPad 2 event. We’ll add more as the reports come in.

Oppenheimer’s Yair Reiner: The just unveiled iPad 2 offers the kind of incremental improvements consumers have come to expect from a second-generation Apple device. While it doesn’t include any new breakthrough features or functionalities, the sum total of its refinements and upgrades—thinner, lighter, faster, more connected—significantly enhance the device’s overall appeal. The closest historical parallel would be the iPhone G2.5 to 3G transition, whose slew of relatively minor upgrades allowed sales to more than triple in the product’s second year. This is a sad day for the crowd of competitors still struggling to home in on the first iPad’s price and performance. We continue to see Apple grabbing 75-85% of the tablet market in 2011.

Morgan Stanley’s Katy Huberty: Although there were no big surprises today, following our hands on demo we think that the iPad 2 delivers dramatic performance improvements and an important reduction in thickness/weight improving the overall user experience. … After using the original iPad over the last year, our iPad 2 demo revealed significantly faster webpage loading speeds and overall performance. Besides the performance improvements, iPad 2’s reduction in thickness and weight should not be underestimated. The device is sleek – 33% thinner and 15% lighter than the original iPad (and vs. many 10″ competitors) which has an important impact on the overall user experience.

RBC’s Mike Abramsky: Steve Jobs appearance from medical leave was a welcome surprise to the event (although he did not say whether or not he would return to Apple), while other announcements and iPad 2 features were largely inline… iPad 2 raises the bar and sustains pressure on competitors, and continues to target media-centric tablet consumers seeking a premium experience.  iPad 2 doesn’t alter competitive landscape for pending Android tablets or PlayBook, which may appeal to different market segments (like Android/Google fans, productivity-centric or enterprise segments).

Needham’s Charlie Wolf: Pad 2 immediately obsoletes a flood of media tablets that are finally beginning to appear a year after the iPad’s introduction. Competitive tablets can emulate the hardware features of the iPad. But none can or probably never will match its software. Nor can they match its price.

Susquehanna’s Jeff Fidacaro: Our recently published supply-chain checks suggest total iPad builds of 6.9 mln-7.1 mln for CY1Q11 due to some seasonality and is comprised of only ~2 mln iPad1 units. This corroborates with a Digitimes article suggesting a build of 6 mln-6.5 mln iPads (including iPad2) in CY1Q11 and 40 mln for CY11. We anticipate a workdown of iPad1 inventory and a significant ramp-up in iPad production in CY2Q11 to 10 mln-12 mln units. Our March- and June-quarter iPad estimates call for 5.25 mln and 8.5 mln shipments, respectively.

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