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Tuesday, March 29, 2011, 08:10 am PT (11:10 am ET)

Continued lines for Apple's iPad 2 create 'shock and awe,' sales forecasts surge

More than two weeks after the iPad 2 went on sale in the U.S., lines continue to form at Apple stores around the country as new shipments arrive, prompting one Wall Street analyst to significantly increase his forecast for 2011 shipments.

Analyst Charlie Wolf with Needham & Company issued a new note to investors on Tuesday entitled "AAPL: Shock and Awe!" In it, Wolf reveals he has increased his projected iPad sales for 2011 by 10 million, to a total of 30 million.

Wolf has also increased his prediction for 2012 iPad sales by 10 million, totaling 40 million next year. These changes amount to an earnings per share estimate increase of $1 in 2011 to $23.25, while he sees Apple earning $27.35 EPS in 2012.

"Attempting to forecast the growth trajectory of a new category of computers is difficult, if not perilous," Wolf wrote. "However, the launch of the iPad 2 so far exceeded our expectations that it was evident our 2011 and 2012 shipment forecasts were dramatically low."

He said that hopeful competitors to the iPad have missed the point: the device's success is tied to its software, not the hardware. But competing devices, like those running Android Honeycomb, don't offer enough applications to entice most users.

"In our view, Android's problems go beyond the dearth of applications," he said. "The Honeycomb interface itself appears overly complex for the purpose it was intended — an intuitive, easy-to-use platform for running applications written for Android."

Wolf noted that there is a "robust gray market" for the iPad 2, as lines for the device continue to form across the U.S. He sees this as a sign that the biggest opportunity for Apple with the iPad may be in China.

Lending support to Wolf's conclusions regarding the gray market, AppleInsider reader Noah sent details and video on Tuesday from the iPad 2 line at Apple's New York City retail store in SoHo. The line of customers reportedly wrapped around Prince Street, north on Greene Street and almost to Houston, while most who were waiting were said to be speaking mostly Mandarin and some Cantonese.

"Ten or so minutes after they allowed the line in, we were told that all of the AT&T versions were sold out," he said in an e-mail. "Some people left grumbling (me included). Ten minutes from them, the same went for all Wifi models. Only Verizon's versions remain."



Apple experienced crushing demand for the iPad 2 at launch in the U.S., and last week's international launch saw similar sellouts across the globe. But there have been signs that availability is improving, with shorter estimated shipping times from Apple's online store, and expanded retail availability at Radio Shack stores starting today.