Apple 2.0

The rate slows to 5,000 per day as Apple offers school discounts and begins accepting apps

Photo: Apple Inc.

It's been a busy week for the iPad.

It started off with a bang, as Apple (AAPL) racked up pre-orders at the rate of more than 25,000 units per hour early Friday March 12, according to the team tracking order numbers at Investor Village's AAPL Sanity board.

By Sunday, the initial frenzy had cooled. The pre-order rate slowed to 30,000 units per day on Monday, 10,000 on Wednesday and 5,000 on Thursday.

Total pre-orders for the week: 190,000 units according to Daniel Tello, who's been manning the spreadsheet for AAPL Sanity. (See his chart below.) That doesn't include bulk orders by institutions or reservations for store pickup, which the Boy Genius reports were pouring in that first weekend at the same rate as pre-orders.

"Based on this," writes Deagol, "and using my intuition and experience, and voodoo or however you want to call it, I'm sticking to my prediction of 1 million sold by mid-April.

That's considerably less than the estimate of 1 to 2 million units by April 3, which an anonymous analyst had offered TheStreet (perhaps set the stock up for a fall?)

But it's not bad for a product few customers have set eyes on, never mind held in their hands.

Meanwhile, in other iPad news:

• Apple this week began promoting iPad bundles for educational institutions, offering a $20 discount per unit when purchased in packs of 10. See MacRumors here. That suggests Apple has either solved the rumored production problems or orders are coming a bit slower than it hoped. Either way, it seems to think it will have plenty of iPads in stock come April 3.
• Apple has opened the App Store to iPad developers while keeping them on the same short leash it used on iPhone developers. "Your opportunity to be part of the grand opening begins today," reads the invitation e-mailed to registered developers. "Submit your iPad app now for an initial review by the App Review Team and receive feedback on its readiness for the grand opening."

Below: Tello's chart of cumulative iPad pre-orders for the first seven days.

Source: Daniel Tello

Note: Unit numbers are calculated by subtracting average daily non-iPad orders and multiplying the difference by the average number of iPads per order. For more on Tello's methodology, see his blog, Deagol's AAPL Model.

Tello and his colleagues continue to track iPad pre-orders. If you want to contribute to their spreadsheet, send the data to ipadsales10@gmail.com. Include your order number with the last three digits Xed out, the number of iPads you ordered, the order time, time zone, memory capacity and whether your iPad is Wi-Fi only or Wi-Fi + 3G.

See also:

• iPad pre-orders: 10,000 per day
• Apple orders drop sharply
• Day 1 estimate: 120,000 iPad sales
• Apple sells 50,000 iPads in two hours
• The wild iPad Ruckus begins
• How many iPads will Apple sell?

[Follow Philip Elmer-DeWitt on Twitter @philiped]

A year later, he talks about the liver transplant operation that saved his life.

Credit: San Jose Mercury News video

"I was lucky," said Steve Jobs in brief remarks Friday in support of a new California organ donation bill. "Because many others died waiting for a transplant."

After being introduced as "the Steve" by Governor Arnold Schwarzenegger, Apple's (AAPL) CEO spoke for only the second time in public about the liver transplant he received in great secrecy last year, answering in the process several of the questions that swirled around the operation at the time — including when it happened and why it happened in Memphis.

"I was receiving great care here in Stanford," he said, "but there were simply not enough livers to go around. And my doctors here advised me to enroll in a transplant program in Memphis, Tenn., where the supply/demand ratio is more favorable than it is here in California. And I was lucky enough to get a liver in time. As a matter of fact, this coming week is my one year anniversary."

A video of the event is available here through the San Jose Mercury News and posted below the fold.

Jobs explained that last year in California there were 671 liver transplants and 3,400 people who needed new livers — 400 of whom died before they could get one. "I was almost one of the ones that died waiting for a liver in California last year," he told a group gathered at Stanford's Lucille Packard Children's Hospital.

The bill Jobs supports — SB 1395 — would require that the California motor vehicles department ask drivers applying for or renewing a license whether they want to become an organ donor. Today, Jobs said, "Nobody's going to ask you. Nobody's going to give you this opportunity."

In his remarks, Schwarzenegger said Jobs was instrumental in securing the governor's official support. "Steve Jobs told my wife about his transplant and she talked to me. Then we had great phone conversations back and forth. … He knew that others don't have a plane waiting for them to get to a transplant."

Below: The video. Jobs' remarks begin at the 12:48 mark.

See also:

• Steve Jobs is back on center stage
• Steve Jobs: The sickest patient on the waiting list
• Inside Steve Jobs' liver transplant

[Follow Philip Elmer-DeWitt on Twitter @philiped]

The first TV ads gave Apple's tablet computer a short-lived shot in the arm

Click to enlarge. Source: YouGov BrandIndex

In the weeks since Steve Jobs unveiled his latest creation, public perception of the iPad has been all over the lot — up, down and sideways.

The chart at right, produced by YouGov's BrandIndex, is a snapshot of that roller coaster ride taken in the days before and just after Apple (AAPL) aired the first iPad TV ads during the 82nd Academy Awards.

"The Oscar night ad debut gave Apple a short-lived shot in the arm with adults 18+, sending it from a 35 buzz score the day after the Oscars to 38.5 a couple of days afterwards," says YouGov's Drew Kerr. "However, perception has been rocky since then, with the brand's buzz score now at 32.4, reflecting the public's indecision about the product."

YouGov determines a brand's "buzz" by asking 5,000 Americans every day "If you've heard anything about the brand in the last two weeks, was it positive or negative?"

Respondents are drawn from an online panel of more than 1.5 million individuals. A score can range from 100 to -100 and is compiled by subtracting negative feedback from positive. A zero score means equal positive and negative feedback. YouGov claims a margin of error of +/- 2%.

See also:

• The second-richest man at the Oscars
• The wild Apple iPad ruckus begins
• iPad pre-orders: 10,000 per day

[Follow Philip Elmer-DeWitt on Twitter @philiped]

Scrambling to cut content deals as the April 3 launch-day deadline looms

Photo: Apple Inc.

Steve Jobs knows a thing or two about Hollywood. He ran Pixar for 20 years. He's Disney's (DIS) largest stockholder. He's got a hobby called Apple TV. And he's packed the iTunes Store with more than 55,000 TV episodes and 8,500 movies. But in terms of delivering video content to American consumers, Apple (AAPL) is still in the bush leagues — and he knows it.

Enter the iPad. With a 9.7-inch high-res screen, broadband Internet and enough flash memory and battery life to show a trans-Atlantic flight's worth of entertainment, the tablet computer could be Apple's first serious entree into the world of the couch potato — if only Hollywood would play along.

That's the dramatic tension underlying today's piece in the Wall Street Journal, which reports that Apple has put its magazine, newspaper and textbook projects "on backburner" as it concentrates on cutting media content deals in the weeks before the iPad's April 3 launch.

Citing "people familiar with the matter" 12 times in 14 paragraphs (are you there, Rupert?), the Journal reports that Apple is scrambling to strike deals but running into fierce resistance. Specifically:

• Apple has put on hold its plan to offer "best of TV" packages as $30 per month subscription services "because few media companies were interested."
• Instead, it is discussing dropping the price of individual TV shows to 99 cents, down from the $1.99 and $2.99 currently charged for most shows on iTunes.
• Many major TV studios are balking at the price cut, worried that it would "jeopardize the tens of billions of dollars in subscription fees" cable and satellite companies pay now for their content.
• Apple counters with the familiar argument that lowering the price could create new markets — as if there weren't enough television being consumed in America today.

The Journal's people say that it looks like Apple has cut some deals and may be offering a limited number of 99-cent shows by the time the iPad ships. In December, the paper reported that CBS (CBS) and — big surprise — Disney were the content producers most likely to buy into Steve Jobs' Hollywood dreams.

See also:

• The second-richest man at the Oscars
• Apple's new pitch to Hollywood
• Can Steve Jobs unplug cable TV?

[Follow Philip Elmer-DeWitt on Twitter @philiped]

On track to reach 200,000 units one week after Apple began taking orders online

Click to enlarge. Source: Daniel Tello

After an initial flood of pent-up demand and some ups and downs over the first weekend, pre-orders for the iPad tablet computer are now averaging 10,000 per day, according to Daniel Tello, a Venezuelan blogger-analyst who writes about Apple (AAPL) using the pseudonym Deagol.

Tello has been tracking order numbers submitted by volunteers since March 12 at 8:30 a.m. ET, when Apple began taking pre-orders for the iPad.

By his calculations, which are based on a precise count of order numbers and an estimate of how many of them were non-iPad orders, Apple passed the 180,000 unit mark on Wednesday.

"I think sometime during Friday, perhaps before noon, the counter should roll to 200,000 units pre-ordered," he told Fortune.

Source: Daniel Tello

Tello's tally does not include iPads reserved for pick-up at Apple retail stores on April 3, the day the device goes on sale. But according to the Boy Genius Report — citing its "Apple connects" — Apple's 222 U.S. stores took an average of 700 reservations that first weekend, which would suggest that reservations and online orders are coming at roughly the same rate.

If true, the total number of iPads reserved or pre-ordered in the first week may be close to 400,000.

Published estimates of the number of iPads Apple will have manufactured by April range from a high of 1 million to a low of 300,000. Apple is still taking orders for the iPad, but spot shortages have started to appear in some iPad accessories, including the iPad case and the iPad keyboard dock.

Tello and his colleagues at Investor Village's AAPL Sanity board continue to track iPad pre-orders. If you want to contribute to their spreadsheet, send your information to ipadsales10@gmail.com. Include your order number with the last three digits Xed out, the number of iPads you ordered, the order time, time zone, memory capacity and whether your iPad is Wi-Fi only or Wi-Fi + 3G.

See also:

• Apple orders drop sharply
• Day 1 estimate: 120,000 iPad sales
• Apple sells 50,000 iPads in two hours
• The wild iPad Ruckus begins
• How many iPads will Apple sell?

[Follow Philip Elmer-DeWitt on Twitter @philiped]

Answers charges of patent "theft" with a polite press release and a Google e-mail address

Two weeks after Apple (AAPL) filed a pair of lawsuits against HTC for allegedly infringing on 20 iPhone-related patents, the Taiwanese smartphone manufacturer broke its silence. In a series of press interviews and a statement released early Thursday morning, it said:

• HTC advocates intellectual property protection
• It has always respected other innovators' technologies and will continue to do so
• It embraces healthy competition.

In other words, it said nothing at all.

"We think competition is healthy," Apple CEO Steve Jobs said in the incendiary press release that accompanied its lawsuits, "but competitors should create their own original technology, not steal ours."

HTC CEO Peter Chou's response, by contrast, was pro forma: "HTC disagrees with Apple’s actions and will fully defend itself."

Part of HTC's problem is that the operating system software that runs most of its smartphones is licensed from U.S. companies. HTC doesn't appear to have a deep portfolio of its own patents on which to build a strong countersuit.

Indeed, the evidence of its own contribution to smartphone technology offered in Thursday's press release was a list of three awards (e.g. Fast Company’s 2010 Top 50 Most Innovative Companies) and six "first" built largely on software licensed from Microsoft (MSFT) and Google (GOOG):

• First Windows PDA (1998)
• First Windows Phone (June 2002)
• First 3G CDMA EVDO smartphone (October 2005)
• First gesture-based smartphone (June 2007)
• First Google Android smartphone (October 2008)
• First 4G WIMAX smartphone (November 2008)

"For more about HTC's history of innovation," suggested the press release, "please visit www.htc.com/history." There, you will find that history succinctly encapsulated in the following timeline:

Source: HTC

Unless HTC's partners step up in its defense, this could be the rare patent suit that's over almost before it's begun. Perhaps that's why HTC's account manager at Waggener Edstrom invited the press to "reach out" to Google spokesperson Jill Hazelbaker.

See also:

• Apple talks tough to handset makers
• Counting patents: Apple, Google, HTC
• Steve Jobs: A man aggrieved
• Apple vs. HTC: What the experts say
• Apple strikes back, sues HTC

[Follow Philip Elmer-DeWitt on Twitter @philiped]

A former CFO at IBM and Chrysler and an adviser to billionaire investor Kirk Kerkorkian

Photo: Apple Inc.

Apple (AAPL) announced Thursday that Jerome B. York, who served on the company's board of directors for more than a dozen years, has died. He was 71.

York was hospitalized Tuesday night after suffering a massive cerebral hemorrhage in his Detroit home.

He was born in Memphis, Tenn., in 1938 and trained as an engineer. He worked his way up at Chrysler to become Lee Iacocca's chief financial officer. He also served as IBM's (IBM) CFO and helped financier Kirk Kerkorkian engineer a failed bid to take over Chrysler.

York was vice chairman of Tracinda Corp., Kerkorkian's private investment firm, when Steve Jobs made his triumphant return to Apple. York was invited to become a director after the boardroom coup in which Gil Amelio was ousted and Jobs installed as interim CEO.

York and fellow director Al Gore headed Apple's internal investigation of the circumstances by which Jobs was awarded options for 7.5 million shares of the company's stock in 2001. Although the shares were backdated to a board meeting that never took place, they found "no misconduct" on Jobs' part — a conclusion with which the U.S. government ultimately concurred.

"Jerry joined Apple's Board in 1997 when most doubted the company's future," said Jobs in a statement prepared for release. "He has been a pillar of financial and business expertise and insight on our Board for over a dozen years. It's been a privilege to know and work with Jerry, and I'm going to miss him a lot."

York's death and the departure last summer of Google (GOOG) CEO Eric Schmidt (see here) leave Apple with only five outside directors: Gore; Bill Campbell, former CEO of Intuit; Millard Drexler, CEO of J. Crew (JCG); Andrea Jung, CEO of Avon (AVP); and Arthur Levinson, chairman of Genentech.

Apple.com's front page Thursday was given over to a tribute to York's "extraordinary character, business expertise and leadership."

For an account of the behind-the-scenes role York played in Detroit during his long career in the auto industry, see Alex Taylor's When Jerry York shook up GM at Fortune.com.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

Measured by revenue, the Apple's first million units easily swamped the "iPhone killers"

Sources: Flurry Analytics, Piper Jaffray, Broadpoint AmTech

Flurry Analytics' report comparing the initial sales of three leading smartphones generated more than three dozen stories Tuesday. (See here.)

Most highlighted Flurry's discovery that in the 74 days post-launch that it took Apple (AAPL) to sell its first 1 million iPhones, Motorola (MOT) sold 1.05 million Droids and Google (GOOG) sold only 135,000 units of HTC's Nexus One.

"The comparison is interesting because the iPhone and Nexus One each represent Apple and Google’s first fully branded handsets, respectively," wrote Flurry's Peter Farago, who said Flurry threw in the Droid because it's the fastest selling Android phone. He was surprised to find that it in its first 74 days, the Droid actually outsold the iPhone by 50,000 units.

Farago offers three reasons for this (which we quote below the fold, along with his chart). But he left out the factor that strikes us as perhaps the most important: price.

In the first 74 days, 68 of them before September 2007 price cut, the iPhone's ASP (average selling price) was about $575. When the Droid launched 2.5 years later, its ASP was almost half that — $286. The Nexus One, because it is primarily sold on Google's website without a carrier subsidy, has an ASP closer to that of the June 2007 iPhone.

The chart above, comparing the three phones' revenue from consumers over their first 74 days, looks very different from the one Flurry ran:

Source: Flurry Analytics

Peter Farago's analysis of why the Droid's launch moved more units than the iPhone's follows:

1. Consumer Perception & Demand: Motorola Droid launched over 2.5 years after the iPhone 1G. (Nov 2009 vs. July 2007). When the iPhone launched, consumers’ concept of a mobile computing device as we now understand it, was very different. Since then, Apple has spent millions training and educating consumers about capabilities of such a device, which was no small feat especially after its first foray into the handset business (Motorola ROKR E1 in 2005).    Until iPhone had been introduced, most consumers, especially in the U.S. had thought of their phones as, well, just phones.
2. Relative Subscriber Bases: Droid launched on Verizon, a larger network with more subscribers than AT&T, especially when considering AT&T's 2007 size (63.7 million at the time of iPhone launch) versus Verizon's 2009 size (89 million at the end of Q3). Additionally, there was pent up demand among the Verizon subscriber base for an iPhone killer, which is exactly how Verizon positioned the Droid. Finally, Verizon backed the launch with advertising support of at least $100 million.
3. Holiday Season Sales: Droid benefited from launching on Nov 5 and having its first 74 days lifted by the holiday season, which is the highest selling period of the year for handsets. Neither iPhone 1G nor Nexus One's first 74 days spanned a holiday period.

As for the Nexus One's dismal showing, Farago ends with this parting thought:

"As Google and Apple continue to battle for the mobile marketplace, Google Nexus One may go down as a grand, failed experiment or one that ultimately helped Google learn something that will prove important in years to come."

UPDATE: Several readers have pointed out that for 21 of the iPhone's first 74 days it was out of stock at most Apple Stores.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

Shares surge on iPad pre-orders, making Apple America's third most valuable company

UPDATE: That was short-lived. By March 15, Apple's market cap had fallen below Wal-Mart's once again.

Ninety minutes after Apple (AAPL) opened its online store for iPad pre-orders Friday morning, a burst of trading — roughly 2 million shares in 30 minutes — pushed its stock price to $227.73 and its market cap to $206.5 billion.

That, and a dip in Wal-Mart's (WMT) share price, made Apple — if only briefly — America's third largest company by market capitalization, after Exxon (XOM) and Microsoft (MSFT) and ahead of Wal-Mart and Berkshire Hathaway (BRK-A).

Apple shares have been on a tear since the iPad's ship date was announced last Friday, hitting five all-time highs in as many days.

UPDATE: Apple closed at $226.6, up 1.1 points (.49%) for yet another all-time high. It's market cap is now $205.48 billion, $309 million more above Wal-Mart, which closed down .07 points (.13%) for the day.

See also:

• The wild Apple iPad ruckus begins
• Apple hits another record high
• Apple approaches $200 billion
• Apple sets iPad ship date; shares hit record high

[Follow Philip Elmer-DeWitt on Twitter @philiped]

NPD data show iPod sales were also up — 7% year to year — for the first time in 16 months

In a report to clients issued Monday afternoon, Piper Jaffray's Gene Munster — a long-time Apple (AAPL) booster — found much to cheer about in the NPD Group's U.S. retail sales data for January and February.

"We are buyers of AAPL based on Feb. NPD data," he writes. He points to two trends in particular:

• Mac unit sales are up. An average of 39% year over year for the first two months of the March quarter, which according to Munster translates into sales of somewhere between 2.8 and 2.9 million Macs for the full quarter. The Street, he says, is looking for Mac sales to be up only about 22%.
• iPod unit sales are up. After a series of 16 consecutive monthly declines, iPod sales are up 7% year over year for the last two months, suggesting total iPod sales of 9 to 10 million for the March quarter. The consensus is closer to 9 million.

Munster is quick to point out that these year-over-year comparisons are easier this quarter — and will be for the first half of 2010 — given the declines both products suffered during the recession last year (see spreadsheets below the fold). There's also some sobering news in the ASP (average selling price) of both product lines. The Mac's ASP is down 10% versus the 7% drop Munster had built into his model. ASPs for iPods were up slightly (3%), perhaps due to a higher mix of iPod touches. Munster, however, was expecting a 15% increase.

Below the fold: The raw NPD data.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

The spike in new development observed after January's unveiling continued into February

Click to enlarge. Source: Flurry Analytics

In February, two weeks after Apple (AAPL) unveiled the iPad, Flurry Analytics reported a sharp uptick in the number of developers installing its analytics tools in new apps for the iPhone — a device that shares the same operating system. (See The iPad that launched a thousand apps.)

On Monday the company took a look at February's data and found that the pace of new development — "the single sharpest spike in Flurry history," in its words — continued nearly unabated.

"Over six weeks since Apple announced the iPad," writes Peter Farago, "Flurry continues to measure a significant increase in iPhone OS new application starts within its system. We continue to attribute this growth to excitement generated by the impending launch of iPad, now set for April 3 in the U.S. A large proportion of the applications we are seeing are custom version of existing applications tailored for the iPad." (see here)

The chart above shows a 185% step-up in developer activity within Flurry since the iPad was announced on Jan. 27. For more Flurry Analytic charts, including one tracking the number of available apps at  Apple's App Store vs. the Facebook platform, click here.

[Follow Philip Elmer-DeWitt on Twitter @philiped]

A rough three-day estimate, based on an analysis of order numbers: 152,000 units

Source: Daniel Tello

After the initial burst of excitement on Friday that saw iPad pre-orders coming in at the rate of 25,000 per hour, there was a dramatic fall-off over the weekend.

According to Daniel Tello, the Venezuelan blogger-analyst who has been tracking order numbers submitted by volunteers at Investor Village's AAPL Sanity board, orders on Saturday and Sunday slowed to an estimated 1,000 per hour.

Tello, who is better known on the Web as Deagol (after a Hobbit in J.R.R. Tolkien's The Lord of the Rings), attributes roughly half of the estimated 120,000 first-day sales to "pure overexcited fanboism."

The real demand for Apple's (AAPL) tablet computer in the weeks before its April 3 release, he says, is probably closer to 30,000 per weekday and half that on weekends.

"With three weeks and two weekends left before they ship, I wouldn't expect much more than half a million in pre-orders and reservations," he says.

"My best guess, although very tentative given the early stage and few data we have so far, would be that they hit the 1 million unit milestone by the second week after it ships," he told Fortune. "But this is a very speculative guesstimate based on just a weekend of pre-orders."

Tello's estimates are based on 120 orders for 137 iPads over 58 hours, starting at 8:30 a.m. ET Friday.

Working with Victor Castroll, an analyst with Valcent Financial Group, he applied a complex formula that subtracts the average number of non-iPad orders on Apple's online site (assuming a slight bump due to increased traffic), multiplies the result by an average of 1.125 iPads per order and adds an estimated 2,000 units for the eight late-night hours for which they had no data.

Tello's bottom line estimate: 152,000 pre-orders by midnight Sunday. This does not include iPads reserved for pick-up.

The breakdown of orders by flash drive capacity (16, 32 or 64GB) and network (Wi-Fi or Wi-Fi+3G) remains roughly where it was on Friday (see pie charts here), with buyers favoring Wi-Fi over Wi-Fi+3G by more than 2 to 1. There was a slight increase over the weekend in 64GB orders, pushing its share of the pie to more than 35%.

Tello and Castroll hope to continue their analysis, but they are running out of volunteers willing to submit their order numbers. If you pre-order an iPad between now and April 3 and would like to contribute to their effort, send the information to ipadsales10@gmail.com. Include your order number with the last three digits Xed out, the number of iPads you ordered, the order time, time zone, memory capacity and whether your iPad is Wi-Fi only or Wi-Fi + 3G.

Tello is famous in Apple investor circles for making predictions of the company's quarterly revenues and earnings that are as good as, and more often better, than those published by professional analysts. See, for example, How the analysts got it so wrong. You can follow his work at Deagol's AAPL Model.

See also:

• Day 1 estimate: 120,000 iPad sales
• Apple sells 50,000 iPads in two hours
• The wild iPad Ruckus begins
• How many iPads will Apple sell?

[Follow Philip Elmer-DeWitt on Twitter @philiped]

eBay is already flooded with dubious offers of iPads and iPad paraphernalia

Click to enlarge. Source: eBay

It's not too late to bid on the new, sealed-in-box 16GB iPad being offered by egiftscentral_123 — an eBay "top-rated seller" with 99.3% positive feedback — for the Buy It Now price of $21 million (plus $14.42 for shipping).

If that seems like a lot to pay for a tablet computer you can pick up at your nearest Apple Store come April 3 for $499, that's probably because you haven't checked out the other iPad offerings on eBay (EBAY).

On Sunday morning, two days after Apple (AAPL) began taking orders online — and three weeks before the device ships — a search for "iPad" on eBay turned up 2,078 listings, from iPad screen protectors to iPad-ready purses.

The big money, it would seem, is in iPad domain names — Web addresses that will presumably generate a lot of traffic if the device takes off. We counted 312 offerings, many for multiple sites. At least five have a Buy It Now sticker price of $21 million, including ipadsurfs.com and ipadinternetstore.com. There were no takers Sunday for stealtheipad.com ($1 million), ipad-hacks.ca ($3,000) or ghettoipads.com ($1,300). But internetipads.com had at least one bid — $10 from a veteran domain-name trader list as _***b.

The hottest action Sunday was in auctions for the iPad itself, 394 in all. The 16GB Wi-Fi iPad was the most popular item, followed closely by the 64GB model. Serious bidding seemed to center on offers to ship iPads internationally on April 3. There were 22 bids, for example, for a 64GB Wi-Fi-only iPad that shipped oversees for a flat $59 rate, a $699 value (not counting shipping) with a top bid of $860.

A 23% mark-up might make sense for a buyer who really wants an iPad and lives outside the 10 countries where the devices go on sale next month.

But as always on eBay, it's buyer beware — especially when the bidding goes into eight figures.

See also:

• Day 1 estimate: 120,000 iPads sold
• Apple sells 50,000 iPads in two hours
• The wild iPad Ruckus begins
• How many iPads will Apple sell?

[Follow Philip Elmer-DeWitt on Twitter @philiped]