Apple will launch its iPad 2 in the U.S. and the obsession over how many people are waiting in line is getting to be a bit much.
You know the drill. Apple launches product, long lines form around the block and the company makes the news. We all fawn over the latest greatest Apple gadget.
But a funny thing happened to Apple recently: Verizon launched the iPhone 4 and there weren't long lines. Verizon noted there were short lines because a lot of people---especially customers eligible to upgrade---ordered the iPhone 4 a week earlier than launch. Verizon hasn't disclosed iPhone 4 sales yet. At Apple's Stockton Street store in San Francisco there were more journalists than people in line for the Verizon iPhone (right).
Notice how Apple won't allow you to preorder until early Friday morning. Obviously, Apple would like some pictures of video of people camping out for the iPad 2.
However, Apple may not see big lines anyway. Why? Apple has a lot more distribution this time around. The first iPad launched at Best Buy and 221 Apple stores. The iPad 2 will launch at its 236 U.S. Apple stores and 10,000 other points such as AT&T, Verizon, Wal-Mart, Target and Best Buy. Simply put, there's no reason to camp out. Apple CEO Steve Jobs said last week that the iPad 2 will be everywhere. He wasn't kidding.
Nevertheless, we'll focus on the lines. Then we'll get the analysis about what it means if only 100 people are camped out Apple's New York City retail stores.
How bad is this line obsession? Piper Jaffray analyst Gene Munster penned a research note Tuesday that mentioned the word "line" 28 times. The bottom line comes down to this: Apple will sell 1 million iPad 2s way faster than the 28 days the first version took because it has greater distribution.
Due to the many differences between the first iPad launch (right) and the iPad 2 launch this Fri. (3/11 at 5pm) it is difficult to gauge how long lines will be. That said, we believe concern for weak initial demand, stemming from the short lines at the Verizon iPhone launch, are unfounded. We believe there will be lines for the iPad 2 on Fri. but they may be shorter than lines for the first iPad launch. That said, we believe that initial demand will be stronger for iPad 2 than it was for iPad 1 (reaching 1m units faster than the 28 days it took for the original iPad).
Meanwhile, the first iPad was available to preorder 22 days for delivery on the first day (only in Wi-Fi). Munster continues:
Generally, the length of the lines at Apple retail stores on launch day have been a helpful early indication of demand. However, factors like online pre-orders, simultaneous international launches, weather, timing in the day and the day of the week can all impact a consumer's willingness to go stand in line, but may not necessarily be indicative of immediate purchase intentions. For example, lines for the iPhone 3GS were 35% shorter than lines for the iPhone 3G, but it reached 1m in the same 3 day span (despite shipping in fewer countries at launch). Likewise, lines for the original iPad were longer than previous iPhone lines, but Apple sold just 300k iPads on launch day; then iPad sales consistently beat estimates as Apple increased its supply.
To cap it all off Munster has a line graphic.
So here's the scenario. Some fool will surmise that short lines mean iPad 2 didn't come out of the gates fast enough. Then Apple will prove them wrong on Monday. Distribution matters a lot more than photo ops.
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