It’s a classic photo op: Apple releases a product and that night we see lines of early bird shoppers forming. The pictures may not be an accurate portrayal of consumer demand, one analyst suggests Tuesday. A combination of wider distribution, the day of the week and pre-orders could mean short lines, but a huge number of buyers.
Indeed, Piper Jaffray analyst Gene Munster says Apple has 10 times the number of distribution points, compared to a year ago, when the original iPad went on sale. Little wonder, then, the analyst is predicting iPad 2 sales will hit 1 million units quicker than the first-generation tablet. But never mind the lines.
Apple appears to have all of its distribution ducks in a row when it comes to Friday’s start of iPad 2 availability. Not only will all six versions be available at once, the Cupertino, Calif. company has “over 10,000 distribution points including U.S. locations of AT&T and Verizon stores, Target, Best Buy and Walmart,” Munster tells investors. That compares to 1,100 stores in 2010. Also, 236 Apple retail locations will be selling the new tablet, up from 221 when the first iPad was released.
Then there is the psychology of lines. When we see long lines, we often assume each person will come out with the latest Apple gadget. Not always so, the analyst warns. Although Munster remarked there were 730 people lined up in 2010 outside Apple’s 5th Avenue store – more than for the previous iPhone launch – just 300,000 iPads were sold that first day. Another factor to throw into the mix: the first iPad went on sale on Saturday; the iPad 2 will launch Mar. 11, a Friday.
Still, despite the cautionary words, Munster expects the iPad 2 will take less than 28 days – the record for the first iPad – to reach the 1 million units sold mark. Additionally, although Apple has built a wider distribution ecosystem resulting in fewer visible signs of demand, we likely will read (and probably report) about people lining up. However ephemeral the connection with reality, lines of consumers have become the tech industry’s version of reading tea leaves.
[Barron’s]
