Apple 2.0

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iPad 2: Will there be long lines?

March 7, 2011: 12:44 PM ET

That depends on a host of variables -- including the day, the time and the weather

iPad launch, April 3, 2010. Photo: PED

After the enormous queues that many had predicted failed to materialize the day of the Verizon (VZ) iPhone launch, it was hard not to take it as bad omen.

"The best indicator for underlying demand for a product is the lines at launch," says Piper Jaffray's Gene Munster. "Verizon threw a party and nobody came."

Which may explain some of the changes Apple (AAPL) has made in advance of this Friday's launch of the iPad 2 -- starting with the availabilty of pre-orders, or rather the lack thereof.

But there are some things even Steve Jobs can't control. Here are some of the factors that could make Friday's lines longer or shorter:

LONGER:

  • Limited pre-orders. According to Verizon, its iPhone 4 turnout was low because 60% of its sales were made online. Last year customers had 22 days to pre-order their iPads. This time Apple won't be taking orders online until 12:01 a.m. PST (3:01 a.m. EST) the day of the launch, which means if you want an iPad 2 on Day 1, you have to get in line.
  • Work-day crowds. Apple has scheduled Friday's launch at 5 p.m. local time, perfect for drawing crowds that can grow during the day and be swollen at the last minute by workers leaving early to join the queue -- just in time for the evening news broadcasts.
  • Rumors of limited supplies. Between the retail chains -- Best Buy (BBY) and the rest, which never seem to get enough units to meet first-day demand -- and a report last week hinting at touch screen "yield issues," rumors of short supplies have taken on a life of their own. Apple's own retail stores generally have both the largest supply and the longest lines.
  • A proven success. Last year, nobody knew for sure how useful a tablet computer might be. This year, the iPad's reputation precedes it.

SHORTER:

  • 15 million iPads. Apple sold a ton of iPads last year -- 14.8 million by Christmas Day. It's possible that most of the people who really really wanted an iPad have already got theirs. The customers who will buy iPads this year may not be the type that enjoy camping out in front of an Apple store.
  • Evolution, not revolution. Except for the smaller form factor and the addition of two cameras, the main difference between last year's iPad and this year's is a speed bump. Impressive as it may be, it's not likely to have the same kind of draw as a brand new product.
  • Verizon and AT&T. Last year, Apple launched the Wi-Fi-only iPad three weeks before the 3G model arrived. This time the 3G iPad 2 will be available from Day 1 at thousands of Verizon and AT&T (T) outlets.
  • The competition. Much as Steve Jobs would like to dismiss them as "copycats," there are dozens of other companies out there building tablet computers. A few have actually shipped.
  • The day and the weather. The first iPad went on sale on a balmy Saturday in early April -- with temperatures that reached the low 70's in New York City. It could be a lot chillier and wetter this time around. Weather.com is predicting showers and a high of 49°F in New York City, 46° with a 20% chance of precipitation in Chicago, and the usual in San Francisco -- 60° and sunny.

We'll bring an umbrella to Apple's big glass cube on Manhattan's Fifth Avenue Friday to see first hand how this year's iPad crowd compares with last year's. Join us here for our report.

UPDATE: Apparently, the first tent has pitched. In Dallas, Texas, four days early. See here.

UPDATE 2: Piper Jaffray issued a note to clients early Tuesday addressing the question of how long the lines will be on Friday. Munster's conclusion:

"We believe initial demand for iPad 2 will be strong but lines at Apple retail stores could be shorter than lines for the first iPad. We also believe Apple will reach sales of 1 [million] iPad 2s faster than the 28 days it took to sell 1 [million] first generation iPads. Higher sales are possible despite shorter Apple store lines given the dramatic increase in distribution points for the iPad 2 launch."

Also on Fortune.com:

[Follow Philip Elmer-DeWitt on Twitter @philiped]

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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