Apple’s [AAPL  286.091    -2.849  (-0.99%)    ] iPad sold three million units in the first 80 days after its April release and its current sales rate is about 4.5 million units per quarter, according to Bernstein Research. This sales rate is blowing past the one million units the iPhone sold in its first quarter and the 350,000 units sold in the first year by the DVD player, the most quickly adopted non-phone electronic product. “The iPad did not seem destined to be a runaway product success straight out of the box,” said Colin McGranahan, retail analyst at Bernstein Research, in a note. “By any account, the iPad is a runaway success of unprecedented proportion.”

At this current rate, the iPad will pass gaming hardware and the cellular phone to become the 4th biggest consumer electronics category with estimated sales of more than $9 billion in the U.S. next year, according to Bernstein. TVs, smart phones and notebook PCs are the current three largest categories.

“This is much bigger than I thought it would be,” said Pete Najarian, co-founder of TradeMonster.com and a ‘Fast Money’ trader. “It’s really a total media device and there’s not much a PC can do that you can’t do on an iPad.”

To be fair to the DVD, they were a bulky, pricey change from video recorders that had become a staple of most American homes. It took five years for the DVD to reach the unit sales pace that the iPad reached in just its first quarter, according to Bernstein. The iPad had the advantage of being the extension of Apple’s ever-expanding ecosystem of iPhones, iPod touches and Macs that are marked by ease of use and a familiar style.

Bernstein’s McGranahan covers Best Buy [BBY  40.76    -0.12  (-0.29%)   ], the first major retailer to sell the iPad. His analysis found that not only are the iPads cannibalizing the netbook/notebook category in stores, but could also be hurting sales of TVs and digital cameras.

“It is the rare American household that would spend $600-plus dollars on an iPad and buy a TV or a PC or a digital camera in the same month, or the same quarter, or maybe even the same year,” said McGranahan. The cannibalization of computers by tablets is one of the reasons Goldman Sachs downgraded Microsoft [MSFT  24.19    -0.16  (-0.66%)   ], sending the shares to the worst performance of any Dow Jones Average [.DJIA  10931.74    -12.98  (-0.12%)   ] member today. “The company needs a credible iPad answer in the near term to allay concerns that tablet proliferation necessarily cannibalizes Windows sales,” wrote Goldman analyst Sarah Friar in a note. “To compete with Apple, and Google [GOOG  530.7136    -7.5164  (-1.4%)   ] through Android and Chrome, Microsoft would likely benefit from collaborating with hardware manufacturers on an instant-on, always connected device that has longer-than-PC- battery life and a vibrant ecosystem of applications.” Apple has been the rare company that keeps the “first mover” advantage. As tablets from Microsoft and Research-In-Motion soon flood the market, and Apple’s market capitalization approaches Exxon Mobil, the company’s going to need the next big extension of that ecosystem. Apple TV is on sale now.

By: John Melloy
Executive Producer, Fast Money

Facebook reaches 43.9% of all Internet users in the world, says comScore in a new report, but there are still a few countries where it's the second place social network.

ComScore measures Internet activity in 41 countries overall. In all but the eight countries below, Facebook is the leader.

Motorola shares are up 2% today as investors start to feel better about the company's comeback efforts. But one thing from Motorola's report still sticks out like a sore thumb: The company shipped fewer phones than Apple for the second quarter in a row, despite a much larger product line. That's a HUGE change from three years ago, when Motorola was outselling Apple by 35+ million phones per quarter. So what happened?

For part of the collapse, you can blame Apple's iPhone, which made everything Motorola and many other vendors were selling look like garbage, and other smartphones like RIM's BlackBerries. But Motorola had plenty of internal problems, too, including too much clutter, not enough focus, and the inability to follow up its big hit -- the Razr -- with anything even remotely as popular. Unit shipments don't tell the whole story of Motorola's collapse or Apple's rise. Even more impressive is the share of the mobile phone market's revenues and profits that Apple has taken. Consider that while Motorola still sold almost as many phones as Apple did last quarter, Apple's $5.3 billion in iPhone revenue was more than three times as much as Motorola's $1.7 billion in mobile devices revenue.

WPP's GroupM has revised its global ad spending forecast for measured media this year to nearly $451 billion, up 3.5 percent compared to 2009. The company's last forecast, released six months ago, predicted 1 percent growth worldwide.

In the U.S., ad spending is expected to decline 1.3 percent in 2010 to $145 billion, GroupM said. In the earlier forecast, the shop predicted a 4 percent drop in spending in North America (most of which is in the U.S.).
 "The U.S media marketplace clearly bottomed out earlier this year and we expect moderate growth in 2011 consistent with [gross domestic product] improvement," said Rino Scanzoni (pictured), chief investment officer at GroupM. "Television and online spending will outpace other media as they lead with return on investment metrics." As anticipated, countries in the so-called BRIIC nations (Brazil, Russia, India, Indonesia and China) contribute significant growth to the new global forecast, GroupM said. "China remains the world's biggest contributor to ad growth in 2010, accounting for one in three of all net new ad dollars we expect this year, and one in five as the rest of the world catches up in 2011," said GroupM Futures director Adam Smith. 

Smith also said digital advertising expenditures are playing a key role in worldwide advertising expenditure growth as well.

"The recession has not impacted Internet ad spending except in a handful of highly stressed markets, adding 10 percent to its measured total in 2009," Smith said. "What continues to power the medium is the steady advance in creativity, analysis and technology which embeds digital in almost all marketing activity. Measured Internet added two points of global ad share in each of 2007, 2008 and 2009 and we think it will sustain a rate of one point a year this year and next, to reach 16 percent in 2011."

After outpacing TV, online ads also overtake print

The Internet is poised to overtake newspapers as the second-largest U.S. advertising medium by revenue behind television, according to PricewaterhouseCoopers’ Global Entertainment and Media Outlook for 2010 to 2014.

The online ad business, excluding mobile ads, is set to expand to $34.4 billion in 2014 from $24.2 billion in 2009, according to the report, which PwC plans to release Tuesday.

Newspapers, meanwhile, continue to suffer from a decline in advertising revenue. According to numbers released by the Newspaper Association of America earlier this year, print advertising revenue dropped 28.6% in 2009 to $24.82 billion. The PwC report estimates that print advertising in newspapers will hit $22.3 billion by 2014. “Although the Internet did not fully escape the impact of the recession, its decline in the United States was much less severe than that of other advertising media,” the PwC report notes. Shifts in consumer behavior, potential for inventory on the Internet, and increased broadband penetration in the U.S. are key factors in PwC’s projections, according to David Silverman, a partner at PwC.

In 2005, the broadband penetration in U.S. households was at 34%. An estimated 64% of households now have a broadband connection. The study notes that the federal government’s allocation of $7.2 billion of the stimulus plan for the expansion of broadband services, as well as the increasing availability of triple-play packages, which bundle Internet service with television and telephone service, are catalysts for growth in U.S. broadband access. The report is particularly bullish on the growth of advertising across interactive media, video and email — predicting that this segment of the market will reach $6.6 billion in 2014 from $4.7 billion in 2009. Online TV is expected to propel this segment because it has limited ad inventory within a program, allowing online TV providers to charge premium rates. The mobile advertising market also is poised for growth as wireless networks are upgraded and more Internet-enabled smart phones hit the market. Mobile advertising in North America is predicted to quadruple from $414 million in 2009 to $1.6 billion in 2014, according to the report.

PricewaterhouseCoopers releases its Global Entertainment and Media Outlook yearly. Actual growth in 2009 was slightly higher than projected in last year’s outlook, a spokesman for the company said.

There's only 2 million iPads in the market, but the iPad's share of the global browser market is already bigger than Android, BlackBerry, and the iPod touch, according to this chart cited in a recent Morgan Stanley research report. Morgan Stanley analyst Katy Huberty says iPad usage is closer to a PC than a smartphone, which is not really surprising, since it's designed for web browsing. However, we were still surprised that iPad browser share is already ahead of the popular Android and BlackBerry platforms.