Apple Inc. (AAPL - Analyst Report) announced that its Apple tablet computer called the iPad will be available on April 3 in the U.S. Shares of AAPL surged on the news, rising 3.91% or $8.24 to $218.95. On Friday, AAPL had hit a record high of $219.70 during the day.

The iPad is available starting at just $499 for the 16GB model, going up to $599 for the 32GB model and $699 for 64GB. iPad comes in two versions, one with Wi-Fi and the other with both Wi-Fi and 3G and will be available via AT&T (T - Analyst Report).

The Wi-Fi only model will be available on April 3, while the second version (Wi-Fi + 3G) will be available in late April in the U.S. at a price of $629 for 16GB, $729 for 32GB and $829 for 64GB. In addition, all models of iPad will be available in Australia, Canada, France, Germany, Italy, Japan, Spain, Switzerland and the UK in late April. The company will announce the international pricing in late April.

Apple said that the iPad will ship to additional countries globally later this year. We believe that the international rollout will help it grow higher revenues. Beginning March 12, the U.S. customers will have the option to pre-order both Wi-Fi and Wi-Fi + 3G models from AAPL’s online store or reserve a Wi-Fi model until April 3, at any AAPL retail store.

The iPad includes 12 new apps designed especially for the iPad, and will run almost all the applications in the Apple App Store, including apps purchased for iPhone or iPod touch. iPad syncs with iTunes, just like an iPhone or iPod Touch. It can also sync with Apple's Macintosh and Microsoft's (MSFT - Analyst Report) Windows computers.

The iPad can be used for web browsing, reading and sending email, viewing photos, watching videos, listening to music, playing games and reading e-books. It has a touch screen and comes with 16, 32 or 64 gigabytes of flash memory storage and built-in Wi-Fi and Bluetooth connectivity.

It also includes features such as the high-resolution multi-touch display and is much thinner and lighter than any laptop or netbook available in the market. Management said that the iPad is just 0.5 inches thick and weighs just 1.5 pounds — thinner and lighter than any laptop or netbook.

It also has a battery based on ARM Holdings’ (ARMH - Snapshot Report) technology that lasts 10 hours and can be used for a month on standby without needing to charge.

Since the iPad has a lot more functionality than just book reading, it will be a better alternative to Amazon’s (AMZN - Analyst Report) pioneering ebook reader, the Kindle. It will be interesting to watch these two major players slug it out in this fledgling market.

The aggressive pricing, with the start-up model at $499, appears to be aimed at Amazon Kindle, whose high-end reader, the Kindle DX, is priced at $489. Moreover, AAPL said that its new iBookstore will feature books from Hachette Book Group, News Corp.’s (NWSA - Analyst Report) HarperCollins, Macmillan Publishers, Penguin Group and Simon & Schuster.

Aside from Amazon, AAPL’s iPad also poses a threat to Hewlett-Packard (HPQ - Analyst Report), Acer and Dell (DELL - Analyst Report), who relied much on the growth in netbooks. According to sources, Acer is planning to launch a tablet to compete with AAPL’s iPad in the second half of 2010. Hewlett-Packard introduced a tablet called the Slate in January.

Further, Sony Corp. (SNE - Snapshot Report), the Japanese electronics maker plans to launch a new smart phone this year and is also working on a multifunction device to compete against Apple’s iPad.

While the iPhone and the iPod have been tremendously successful, driving growth at AAPL, we believe the iPad has the potential to help the company sustain its recent growth momentum. We believe iPad will provide a boost to the company’s long-term earnings power.

However, AAPL may face production delays and supply constraints due to the huge demand for its iPad. Analyst firm Goldman Sachs (GS - Analyst Report) estimates that AAPL will sell 6 million iPads during calendar year 2010, although AAPL is expected to sell 5 million iPads according to the Wall Street Consensus. However, research firm Gartner expects AAPL to sell 4.2 million iPads in 2010.