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In January 2010, an iconic CEO at a technology company took center stage in San Francisco. He was there to unveil a revolutionary technology product that would break ground and deliver huge value to his company’s shareholders.
It was the launch of this one device that sparked five years of rapid growth for one of the best-known technology companies in the world. In the five years since that product was launched, the company’s share price has surged 353%. This huge move gives us a starting point for what might be ahead for this stock, and its product launch later this week.
That CEO was the late Steve Jobs, and his company is of course Apple (NASDAQ: AAPL). The product launch was the Apple iPad. That was just over five years ago, and it was the last brand new product launch from Apple. The iPad was huge for Apple, and created a new product category called “tablets” that didn’t previously exist.
Date: April 24
Event: Apple Watch Launch
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Apple’s Last Product Launch: The iPad
Steve Jobs was thrilled with the new product his company was launching. At the launch event, Jobs said, “We want to kick off 2010 by introducing a truly magical and revolutionary product. We think we’ve got something that is (a new category device) … and we’d like to show it to you for the first time. And we call it … the iPad.”
When Jobs unveiled the iPad, Apple fans were enthusiastic. But many observers were skeptical of the new product that was called a tablet. The iPad was literally an oversized iPhone – and it couldn’t even make phone calls. People wondered if the iPad would have a market beyond the die-hard Apple fans.
The stock market was also critical of the new product from the Cupertino, Calif. company. Apple shares fell 4% the day after the iPad launch event, closing the day at a split-adjusted $26.85.
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Despite a lukewarm response, the Apple iPad fared pretty well with consumers. It was available for pre-sale in early March 2010, and launched a few weeks later. In early April 2010, Apple issued a press release with an update on iPad sales. During the three-week launch period, Apple sold 300,000 iPads.
Apple didn’t release specific revenue figures related to the launch. But the Apple iPad prices ranged from $499-$829. Assuming the midpoint as the average price, I estimate that Apple’s launch event sales were around $200 million.
To put this in context, Apple reported sales of $13.5 billion during the quarter in which the iPad was launched. Those iPad launch sales equaled just 1.48% of Apple’s total sales. By any measure, that’s a pretty small contribution to the company’s overall revenues.
Despite the initial criticism and the small sales, the Apple iPad went on to become an overwhelming success. Apple has sold more than 330 million iPads since its launch, and set the standard for a brand new technology device category known as tablets.
In tomorrow’s issue of Daily Profit, I’ll reveal evidence that will show that the Apple Watch could be 10 times bigger than the iPad. Keep your eyes peeled! In the meantime, click here now to learn about how Apple’s biggest secret could deliver big profits.