Apple shares rise as iPad sales top 2 million; device ahead of expectations

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Apple shares rise as iPad sales top 2 million

SEATTLE — Shares of Apple Inc. jumped Tuesday after the company said iPads sales topped 2 million since the tablet computer launched almost two months ago.

THE SPARK: Apple gave the iPad sales update on Monday, after it started shipping iPads to nine new countries over the weekend. Earlier in May, the Cupertino, Calif.-based company had announced iPad sales had reached the 1 million mark after just 28 days on sale in the U.S.

THE BIG PICTURE: In the weeks before Apple’s latest gadget went on sale, analysts and industry watchers wondered whether the iPad could be a hit among mainstream consumers — after all, many companies had tried and failed to get people excited about tablets in the past. So far, Apple has shown people are very interested the slim, keyboardless devices that can be used for a number of digital diversions, including surfing the Web, watching movies, reading electronic books and playing video games. Other consumer electronics companies are rushing to produce tablets of their own, but it has yet to be seen whether those devices will have the same allure.

THE ANALYSIS: The iPad is selling faster than many analysts expected. Shaw Wu of Kaufman Bros. wrote in a note to investors that he believes iPad sales were helped by the quick development of more than 5,000 iPad-specific apps that take advantage of the gadget’s larger screen and faster processor. Wu said analysts were on average expecting 1.6 million to 1.7 million iPads sold by now.

Broadpoint AmTech analyst Brian Marshall wrote in a research note that he thinks the iPad will account for more than 10 percent of Apple’s revenue in the April-June period; it took the iPhone two quarters to reach that mark.

SHARE ACTION: Apple’s shares rose $7.41., or 2.9 percent, to $264.29 in afternoon trading.