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iPad factory blast may hit sales

By Gao Changxin in Shanghai, and Hu Yongqi and Tuo Yannan in Beijing (China Daily)
Updated: 2011-05-23 12:55
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Under this scenario, Apple's earnings per share could drop by 35 to 55 cents, he said.

At the close of Nasdaq trading on Friday, Apple's stock was down 1.56 percent for the day to 335.22, near its monthly low.

Driven by the prospect of a supply shortage after the explosion, "the gray market price for iPad 2 will definitely go up," said Sun Peilin, an analyst with Beijing-based IT research company Analysys International.

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The tablet was highly popular in the irregular but legal market after iPad 2 was introduced in the United States. The price of an iPad 2 was as high as 6,000 yuan ($922.37) for the WiFi 16-gigabyte model. After the product was launched in China, the gray market price dropped to Apple's official price, $499.

Analyst Tong agreed with Sun's forecast.

"The price of iPad 2 in underground sales channels in China will go up, as the already strong consumer demand here in China would be made stronger by supply shock," he said.

Popular in China

China is important for Apple. In the first quarter of this year, revenue from China alone accounted for nearly 10 percent of Apple's total global revenue.

The iPad, both first-generation and second-generation, had about an 80 percent market share in the worldwide tablet personal computer market in the first quarter of 2011, and at least 78 percent in the Chinese market, Sun said.

After the iPad 2 was launched in China, sales of the device surpassed those of all other tablet PCs, including the first-generation iPad.

Despite its popularity in China, iPad sales dipped globally, which Apple acknowledged in April and blamed on supply constraints. Component shortages were expected to get worse following the March 11 earthquake and tsunami in Japan.

"Customer enthusiasm has been tremendous for iPad 2, and we're working as hard as we can to get it into their hands as fast as possible ... We sold every iPad 2 that we could make," Apple's chief financial officer, Peter Oppenheimer, said at the time.

Chen Hong in Shenzhen contributed to this report.

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