Which sequence best completes the text below?

Apple (1)____ over 15 million iPads just in the final three months of 2011. Now the popular tablet Computer (2)____ in its third generation. But as Apple prepared (3)____ a new iPad on March 7th, it (4)____ legal challenges in China over rights to the name of the device.

(Extracted from http://www.manythings.org/ipad/e/v.php?v=4GmNlCqctLU)