The iPad gives Apple shares fits

Worries that the iPad is selling too well and is grabbing too much bandwidth are hurting Apple stock.

By Charley Blaine Apr 19, 2010 3:50PM

Updated at 4:28 p.m. ET


Apple (AAPL) shares have been a big weight on the Nasdaq-100 ($NDX.X) index today. The shares were down 0.1% to $247.07 today. The index managed a small gain at 2,014.

The reason may be the hyper-demand for the iPad tablet computer.

Apple, which delayed selling the iPad outside the U.S. because demand is outpacing supply, may be struggling to get enough of the touch screens used in the tablet computer, Bloomberg News said.

The display's size could be a challenge to suppliers, who may be unable to make useable screens in the quantities Apple needs, said Andrew Rassweiler, an analyst at research firm ISuppli Corp. in El Segundo, Calif.

The 9.7-inch (25-centimeter) screen, larger than that of the iPhone, is made by South Korea's LG Display and Samsung Electronics and Japan's Seiko Epson, according to ISuppli. Apple

"We understand that the yields on the display have been low and that they're creating a production bottleneck,” Rassweiler told Bloomberg. "That they have been doing it for the iPhone for some time is great, but once you go to 9.7 inches, it is a much more complicated process.”

Any constraints might delay CEO Steve Jobs' attempts to conquer the tablet market before rivals such as Hewlett-Packard (HPQ) and Dell (DELL) start selling competing devices. Jobs is betting on the iPad to create a new business at Apple between the iPhone and Macintosh computer.

There was one other problem:

The tablet is having difficulty being accepted at George Washington University and Princeton University because of network stability issues. Cornell University also says it is seeing connectivity problems with the device and is concerned about bandwidth overload, The Wall Street Journal said today.

In addition, the Journal said, students may not be willing to pay $499 -- or more, depending on the type of iPad -- if they still need a desktop or laptop computer to check course assignments or e-mail.

Some higher-education insiders also worry there isn't enough educational content available via the iBookstore application to eliminate expensive physical textbooks.

Apple declined to comment on questions about iPad manufacturing.

Apple is scheduled to report fiscal-second-quarter earnings after Tuesday's close.
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