The rich get richer. The amount of free advertising that Apple (NASDAQ:AAPL) has received for the new iPad is worth hundreds of millions of dollars over the last 48 hours alone.
The product is getting in depth coverage from CNBC, Fox News, The NY Times, The LA Times, USA Today, The Wall Street Journal, The Dave Letterman Show, The Jimmy Fallon Show, and practically every local news station and newspaper around the world. Not to mention prime time product placement in ABC’s Modern Family as well as a cameo in the most memorable Jay-Z moment at the 2010 Oscar’s.
If there was any question as to whether or not Apple had reached a tipping point of critical mass those doubts have been removed. All of this free advertising leads to one conclusion: the iPad is going to thrash all sales estimates. Have you heard about what's happening in Germany? They have reportedly received 250,000 orders! It will be very interesting to find out the final tally of iPad’s opening weekend in the U.S. Clearly it’s looking to dwarf the opening sales numbers of the 2007 iPhone.
The important thing for investors to remember is that most analyst’s have not yet factored in iPad sales into their estimates. Expect to see numerous upgrades over the next few weeks. I reiterate my long held view that this is the first product ever specifically designed to utilize apps, surf the Internet, and to be held in one hand. The world has been waiting for an iPad for the last ten years.
With prospective buyers including 75 million iPhone and iPod Touch users, 217 million global online gamers, 9 million doctors, 60 million teachers and 16 million college students I think it’s reasonable to assume sales of at least 10 million in CY 2010. No brand in the world has a premium of consumer trust like Apple. Consumers know that money spent in the iTunes and App Store is money well spent. Consumers know that the iPad will offer the same seamless user experience as the iPod and iPhone.
The opposite of Apple is a company like Palm (PALM). Palm has no brand loyalty because they failed to build an ecosystem in their early days of success with the Treo. They left themselves open to be victimized by the next best thing. As a result, Palm’s entire market cap is comparable to the amount of Apple’s free advertising in the last 48 hours. The iPad is on track to become Apple's flagship product.
Disclosure: Long AAPL