Apple Starts Selling IPad2 in China as Lenovo Contests With LePad Tablet

Apple Inc. (AAPL) started selling the latest version of its iPad tablet computer in China, as the world’s most valuable technology company fends off competition from products offered by local rivals including Lenovo Group Ltd. (992)

Hundreds of people waited in line outside Apple’s store in Shanghai’s Lujiazui financial district before the 8 a.m. opening time. The store sold out of the white-colored version of iPad2 with 16 gigabytes of memory within hours, according to a check by Bloomberg News.

Apple is offering the iPad2 in China, home to its highest- grossing stores worldwide, as demand in the U.S. for the upgraded product surpassed the first version since its debut in March. The Cupertino, California-based company faces increasing competition in China from local vendors of smartphones and tablets including Lenovo and ZTE Corp. (763), according to Shan Chao, an analyst at BDA China, which advises companies.

“They previously had the market all to themselves, but now rival products have sprung up,” Shan said by telephone from Beijing today. “The new upgrades will help Apple, which is already leading local products in terms of technology.”

The new iPad, which comes in white and black, is lighter, thinner, includes a more powerful processor and front and rear cameras, and sells from 3,688 yuan ($568), according to Apple’s China website.

Apple’s stores in China generate, on average, the highest traffic and highest revenue of any company stores in the world, Chief Financial Officer Peter Oppenheimer said on a Jan. 18 earnings call.

‘Amazing’ Demand

“We’re working hard to get the iPad2 into the hands of every customer who wants one as quickly as possible,” said Carolyn Wu, a Beijing-based spokeswoman at Apple. Demand for the iPad2 “has been amazing,” she said.

Lenovo, China’s biggest maker of personal-computers, started selling its LePad tablet computer in the country in March. The company will use “better knowledge” of the Chinese market to win sales from competitors such as Apple, Chairman Liu Chuanzhi said that month. Prices for the LePad start from 3,499 yuan, according to its website.

ZTE, China’s second-biggest maker of telephone equipment, said last month it aims to sell a combined 12 million smartphones and tablet computers this year.

Apple expanded sales of the latest iPad to Asian markets including Japan, India, Hong Kong and Singapore last week.

To contact the reporters on this story: Mark Lee in Hong Kong at wlee37@bloomberg.net; Margaret Conley in Shanghai at mconley3@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net

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