Today: iPad Air debuts to smaller crowds at Apple (AAPL) stores across the Bay Area, continuing a trend of diminishing turnout at iPad launch events. Also: Google (GOOG) faces big patent lawsuit while theories about barges proliferate.
The Lead: iPad debuts continue to have lower turnouts
While Apple’s iPhone launch event last month showed that the Cupertino company’s fans are still willing to line up for hours to get their hands on a new smartphone, Friday’s iPad Air debut showed that Apple’s tablet offering continues to debut to dwindling crowds.
At Apple’s two popular Palo Alto retail outlets, crowds barely topped 20, if that, and nobody was in line at San Jose’s Oakridge Mall a couple hours before that Apple Store opened, Mercury News staff writer Troy Wolverton reported. The Los Angeles Times reported that two dozen or fewer fans showed up at Apple Stores in San Francisco and Emeryville, as well, and Philip Elmer-DeWitt of CNN Money reported that the New York turnout was the lowest yet for an iPad launch event.
In Palo Alto, a confused passer-by asked employees, “Hey, where are all the people?” In Los Angeles, a customer who arrived just 30 minutes before the Beverly Center store opened was the only person in line despite workers’ warning of a big turnout.
“It was surprising to me,” Ivan Stanchev told the L.A. Times. “Yesterday, I was here to buy the iPhone 5S, and they told me to expect a huge line.”
Friday morning’s launch events were a decline from the crowds that showed up for the iPad Mini’s debut last October, which surprised many longtime Apple launch event attendees at the time with small to absent overnight crowds.
Brad Peterson of Los Altos arrived for last year’s launch at 2 a.m. and found nobody waiting. “I go to these things all the time, and (2 a.m.) usually gets me somewhere in the middle of the line,” he said then.
iPad launch events weren’t always the runty cousins of the iPhone debuts — They kicked off in 2010 with co-founders Steve Wozniak and Steve Jobs attending different Silicon Valley launches, and hundreds of people waited overnight for the 2011 iPad 2 debut in Palo Alto. Just a year and a half ago, dozens of people slept overnight at Valley Fair mall in Santa Clara, and were joined by another 100 Apple fans by 7 a.m., an hour before the third-generation iPad went on sale.
Friday’s launch did not include Apple’s new iPad Mini, which was announced at the same time as the iPad Air but has reportedly faced production issues involving the smaller tablet’s high-definition “Retina” display, and Apple has not set an official release date, which may have hurt turnout. Also, many early adopters have taken to reserving a tablet with Apple online and picking it up at a nearby Apple store at their convenience instead of fighting the crowds: The L.A. Times reported that about 200 iPad Airs were stacked up at the Emeryville store waiting for customers who had preordered the device.
Low turnout at U.S. debut events may not be a huge factor in first-weekend sales of the iPad Air, however: The device had the biggest launch yet internationally, as Apple sold the tablets in 42 countries, including China, and events overseas seemed to have much more fanfare and greater turnouts.
Piper Jaffray analyst and Apple bull Gene Munster noted the lower turnout in New York, but said that adding China to the mix could help Apple sell 2.5 million to 3.5 million iPad Airs in the opening weekend, which would challenge last year’s record debut-weekend sales of 3 million iPads. The Cupertino company could find more customers by dropping the price of its iPad Air, as the company reportedly will do in its retail stores to match a discount offered by Wal-Mart.
Apple stock dropped $2.67, or 0.5 percent, to $520.03 Friday.
SV150 market report: Silicon Valley stocks fall despite HP’s gain
Wall Street moved higher to close out the week Friday, but Silicon Valley stocks declined as weakness from Apple and Google outweighed a big day from Hewlett-Packard (HPQ).
HP gained 6.4 percent Friday to $25.92, after the Palo Alto tech giant’s $3.5 billion contract with the Navy survived a challenge from a competitor who was beat out for the task of running the armed service’s communications network. HP had the fifth largest percentage gain in the SV150 Friday, a group led by Trimble Navigation, a Sunnyvale GPS company that gained 17.1 percent to $33.41 after its earnings report showed mobile gains. SunPower (SPWRA) (up 2.2 percent to $30.87) and SolarCity (up 2.4 percent to $54.64) also had earnings-related boosts Friday, though it wasn’t those companies’ reports: Manufacturing leader First Solar shared its shine with the entire solar sector after a strong quarter.
The SV150 declined 0.1 percent Friday, however, because of declines from some of its largest members. Google fell 0.3 percent to $1,027.04 as new reports suggested the mystery barge in San Francisco Bay connected to the Mountain View search giant will be a giant showroom for Google Glass and other products, with a “party deck” on top. Google and manufacturers who use its Android mobile operating system were hit with a series of lawsuits from a consortium of companies that includes Apple and Microsoft, which outbid Google for a package of patents previously owned by Nortel and is now using them to elicit licensing fees from the companies being sued.
Facebook fell 0.9 percent to $49.75, continuing Thursday’s volatile post-earnings path despite the initial appearance of advertisements on Instagram. eBay (EBAY) fell 1.5 percent to $51.94 after publicizing the issues with governance of the mobile payments space, and Electronic Arts (ERTS) declined 2.4 percent to $25.63.
Up: HP, Pandora, SolarCity, SunPower, Netflix (NFLX), Tesla, Salesforce, NetApp, Yahoo (YHOO), Adobe (ADBE), Workday
Down: EA, LinkedIn, eBay, Facebook, Advanced Micro Devices, Yelp, Applied Materials, Juniper, SanDisk, VMware, Intel (INTC), Apple, Google, Gilead
The SV150 index of Silicon Valley’s largest tech companies: Down 1.27, or 0.09 percent, to 1,402.9
The tech-heavy Nasdaq composite index: Up 2.33, or 0.06 percent, to 3,922.04
The blue chip Dow Jones industrial average: Up 69.8, or 0.45 percent, to 15,615.55
And the widely watched Standard & Poor’s 500 index: Up 5.1, or 0.29 percent, to 1,761.64
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/jowens510.
