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]
Ed Sutherland is a veteran technology journalist who first heard of Apple when they grew on trees, Yahoo was run out of a Stanford dorm and Google was an unknown upstart. Since then, Sutherland has covered the whole technology landscape, concentrating on tracking the trends and figuring out the finances of large (and small) technology companies.
13 responses to “Small Lines Could Spell Big Sales for the iPad 2”
While a lot of that may hold true, you can’t take pre-orders into account for the iPad 2 because there aren’t any. However, many people might buy them online to avoid the crowd.
I hope they’re aren’t any lines up here in Canada…I’m seriously hoping to walk out of an Apple store with an iPad 2 on the March 25th Canadian launch date :)
I’m confused. Was this article just rehashed from the IP1 event last year?
“and pre-orders could mean short lines, but a huge number of buyers.”
Forget the fact that there are no pre-orders for IP2, what does the sentence mean? I see how the day of the week could mean shorter lines, why does that indicate, “but a huge number of buyers”?
“there were 730 people lined up in 2010 outside Apple’s 5th Avenue store – … – just 300,000 iPads were sold that first day. “
I know you don’t mean to indicate that they each bought 410 iPads. But what is your point? 730 outside of Fifth Ave meant more nationally for a different launch?
I am really interested in the analysis of this topic, I just found the article a bit unclear.
I am mostly interested about the theory that Apple disallowed the pre-order process for IP2 to create headlines proclaiming the IP2 success based on line length.
I’m not so sure. I surmise that Apple is more profitable selling an iPad online than anywhere. Next, they would be most profitable selling in their own Apple stores. At Walmart, Target, Best Buy, etc, I assume that the retailers take a cut of the profit. If this is a close guess, why would Apple reject a full profit pre-order for a reduced profit Walmart sale? I know they want good PR. I’m just not sure they would give up profit in exchange.
I think what you said is right, I also hope they’re aren’t any lines up here in Canada
That headline is erroneous. It implies causuality that isn’t in the article. It should be ‘small lines may not mean small sales’
And unfortunately a lot of the comments in the article don’t make sense. Okay there were less than 1000 folks waiting for the start of sales. Clearly more folks showed up later since it was 1 per customer. And so on
Actually, walmart, target, best buy, and the rest don’t get a cut of the profit. I’ve worked for a retailer in the past that sold apple goods, and apple gets 100% of the profit from apple sales. They do, however, get the profit from the ridiculously marked up 3rd party accessories, which can be marked up as much as to be 80% profit.
DO NOT BUY AN iPAD 2.0
To see why:
http://besttechtoday.blogspot….