Mac news from outside the reality distortion field
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July 7, 2009, 3:21 pm

iPhone wait reduced to 30 minutes in New York City

iPhone line 7/7/09There were only four customers in the queue to buy an iPhone 3GS when I showed up at Apple’s (AAPL) flagship Fifth Avenue store in Manhattan Tuesday afternoon for what I’d been told would be the lunch-hour crush.

This is where I’d hoped to see iPhone demand collide with iPhone supply. I saw nothing of the sort.

Although Apple’s availability widget shows red “sold out” lights for selected models in every state where Apple has retail outlets (see here), there seemed to be plenty of product on hand today.

Less than three weeks after the launch of the iPhone 3GS, the lines that once snaked in front of the big glass cube had dwindled to the point where the customers that showed up could fit comfortably between a few retractable belt posts within the store itself.

Justin, one of the teal-shirted Apple employees manning the stanchions Tuesday, said that the big lines had disappeared within a week or so and that what crowds there were now didn’t start to gather until later in the day — around 4 p.m. As I watched for a half-hour, the queue grew until it held a dozen people. At that point it seemed to reach a steady state, with customers leaving with their new iPhones in hand at roughly the same rate as new ones joined the line.

The rest of the store, meanwhile, was hopping with its usual mix of office workers, tourists, foreign visitors flush with Euros, parents with kids in tow, and out-of-school students hunched over the laptops on display. I estimated the crowd at between 200 and 300.

Sprint storeThere were no lines in front of the nearest Sprint (S) store, 10 blocks down Fifth Ave, and no crowd inside, either. It’s not a fair comparison because there are thousands of Sprint outlets and only 240 Apple Stores, but this Sprint store was very quiet. Of the two staff on duty, one was dealing with the sole customer, and the other was reading a book. She looked up to confirm that yes, they did have the Palm (PALM) Pre in stock.

See, by contrast:

[NOTE: An earlier version of this story confused Sprint with T-Mobile. Apologies to anyone who was mystified by the switch.]

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July 7, 2009, 10:54 am

Demand for new MacBooks outstrips supplies

MacBook ProThe new MacBooks are hot — and we’re not talking about the lap-scorching temperature of their aluminum unibodies.

Apple’s (AAPL) online store is currently showing a 7- to 10-day delay in shipping two models of the MacBook Pro — the high-end ($1,500) 13-inch and the entry-level ($1,700) 15-inch.

According to Piper Jaffray’s Gene Munster, who tracks product lead times, Apple has never had a 7-10-day delay in the 13-inch MacBook — the one recently re-named the MacBook Pro. The most significant delay he’s seen was a record 5-7 days, set more than two years ago.

In addition to the shipping delays, he says, some Apple retail stores are experiencing shortages of selected 13-inch MacBook Pros. Of the 10 stores his team contacted, seven were sold out of at least one 13-inch model.

In a note to clients issued early Tuesday, Munster wrote that this “sign of strong demand for Apple’s most popular computer” gives him “increased confidence” in his estimate of 2.2 million Mac unit sales for the fiscal quarter that ended June 27.

Munster also notes that NPD’s surveys of U.S. retail outlets showed Mac sales down only 3% in April and May — considerably less than the 10% he had anticipated. When NPD releases its numbers for the June quarter — which will include June sales — Munster expects them to be up 1%.

We’ll learn more when Apple reports its third-quarter earnings on July 21. Tune in here for live coverage of the company’s earnings call with analysts scheduled to begin at 5 p.m. EDT (2 p.m. PDT).

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July 7, 2009, 7:25 am

Where have all the white iPhones gone?

White iPhone 3GSIt’s the reverse of Henry Ford’s line about the Model T.  Today you can buy any iPhone you want, as long as it’s not white.

Apple (AAPL) has been having trouble keeping the entry-level white iPhone in stock since the new 3GS went on sale two and a half weeks ago. But as of Tuesday morning, it has all but disappeared.

The 16 GB model — apparently the most popular — is out of stock in the 31 of the 41 states in which Apple has stores.

It’s available in only one of California’s 45 Apple Stores, 1 of 9 in Massachusetts, 1 of 7 in Illinois, 1 of 6 in Virginia and 1 of 3 New York City.

It’s not clear whether demand for the white 16GB model is unusually high, or if Apple just isn’t making enough of them.

When we last looked at iPhone availability, there were red “sold out” lights for selected models in all but six states (see here). Today at least one model is out of stock in every state.

The only store in Delaware — located in Newark’s Christiana Mall — is completely sold out.

According to Apple, there are $99 iPhone 3Gs available in all stores, and the 3GS models are restocked “on most days.”

To check availability in the Apple Store nearest you, click here.

AT&T (T) has had 3GS supply problems from Day 1, but Apple’s availability widget doesn’t cover their stores.

Below: A snapshot of the situation in Texas as of Tuesday morning.

Texas iPhone availablity

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June 28, 2009, 7:45 am

Apple runs short of iPhones

Texas iPhone 3GSThe iPhone availability widget is back — new and improved — and it’s showing spot shortages of selected iPhones at Apple (AAPL) stores across the United States.

The availability tool, which appears on Apple’s website in times of scarcity, was last seen in the summer of 2008, when demand for the iPhone 3G was heavy and supplies short.

When it reappeared on Friday, only 29 of Apple’s 257 stores were displaying shortages of any iPhones, according to IFOAppleStore, a website that keeps close tabs of Apple’s retail business.

By Sunday morning, however, there were red “sold out” lights for selected 3GS models in all but six states.

Kentucky’s only store, in Louisville, was completely out of stock.

Kentucky sold out

This year’s model of the widget is considerably more accurate than the original. Last year, availability numbers were updated at the end of each business day. This year, according to IFOAppleStore, the page is linked directly to Apple’s internal point-of-sale computers, allowing hourly updates for each store.

The shortages are all over the lot, but Apple seems to be having a particularly hard time meeting demand for the entry-level white iPhone 3GS. In Texas, the 16GB model is sold out in all but three of the state’s 15 Apple Stores. It’s not clear whether demand for that model is unusually high or if Apple just isn’t making enough of them.

To check availability in the Apple Store nearest you, click here.

AT&T (T) has had 3GS supply problems from Day 1, but the widget doesn’t cover their stores.

According to Apple, the older 8GB iPhone 3G is available in all its stores.

See also:

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June 19, 2009, 6:15 am

Live from the (relatively sedate) iPhone 3GS launch

First in NYC lineThe new iPhone — awkwardly named 3G S (since shortened to 3GS, no space) — went on sale in New York at 7:00 a.m. EDT. This is my live blog of the event from the glass cube of Apple’s (AAPL) Fifth Avenue store, posted in reverse order with the most recent items on top.

Processing customers8:00 Inside the store, the processing of new customers seems to be proceeding in an orderly fashion. There are scattered problems here and there, including reports of extended activation delays, but in general it’s a vast improvement over last July, when Apple’s servers crashed under the load. (Apple learned its lesson and put a couple days between the launch of iPhone 3.0 and the release of the 3GS.) Last year, after two hours trying and failing to get my then-new iPhone 3G activated in the store, I finally left and did it from home. This year I’m heading back to Brooklyn empty handed. I’m not going to buy a 3GS until I can get the full discount in December.

7:45: Wrapped up my interview with CNN International. A kindly Apple PR person has taken pity on me and let me behind the lines to get power, Apple Store Wi-Fi and access to a men’s room. The official estimate of the crowd when the doors opened, she tells me, is 300 people. [UPDATE: By the time someone talked to the New York Times, Apple's count had grown to 400. Piper Jaffray team counted 350, and senior analyst Gene Munster now thinks his prediction that Apple would sell 500,000 units the first weekend might prove to be "conservative." ]

First guy out7:18: The first customer to emerge with an iPhone 3GS is immediately surrounded by reporters, photographers and TV camera crews. I might have made a better picture, but it would have meant walking away from my MacBook.

7:02: The gates open, the crowd starts moving forward, our Jersey boys are at the head of the line. It’s a relatively orderly and civilized affair, for an iPhone launch. The employees in their blue and orange T-shirts showed great restraint, no running down the street like madmen, whooping and screaming. Just steady clapping as the customers march down the stairs in groups of 10 to pick up their iPhones. (I’ve posted a 76-second movie here.)

Doors open7:00 Crowd roaring. Whistles. Clapping.

6:55: Apple employees gathering under the big round staircase, getting ready to go crazy. From time to time small roars erupt from the crowd for no apparent reason. The TV crews are lined up to get the first people in line.

6:45: The crowd now fills 8 twists of the maze; I estimate it at about 220 people.

6:40: The tension has started to rise. I’m afraid I might get booted out of my perch near the corner of the cube, where I’m getting a weak Wi-Fi signal from inside the store.

Security guy6:38: Security guys have started to lay out the crowd control tape. I recognize the heavy who roughed up Daniel Bowman Simon, the environmental activist who was first in line for the iPhone 3G last July. I guess Apple was not unhappy with the job he did.

iPhone costume6:28: The clowns have started to show up. A guy in body-size iPhone costume and a cardboard sign urging people to recycle their iPhones; a pair of lovelies in lime-green Gazelle shirts; two guys offering to buy old 8GB iPhone 3G at $200 a pop. Lots of cameras, two TV trucks with masts and one with a satellite dish.

5:58: Two Apple employees in red shirts are manning the entrance to the barricade maze, sending newcomers to one line or the other, depending on whether they have a reservation. Apple seems to have anticipated a larger crowd than they are getting because the maze is clearly too big. Guys in black shirts are removing the extra ones, perhaps the reduce the impression that the turnout is small. Carlos, the Apple employee manning the front of the line, assures me that they have plenty of units in stock. I think he may be right.

Saadiq5:53 There are two lines, reserved and nonreserved. I count 61 in the reserved, 48 in the other, for a total of 109. The last person in the reserved line, joining it with a little more than an hour to go before the doors open, is Saadiq Akal, 30, a financial analyst from Mill Basin, Brooklyn. He has an iPhone 3G, but he wanted to get the new model. Why did he come so early? “I wanted to get home and get some sleep.”

Sam in a.m.5:50: Sam Epstein, 18, from Montclair, N.J., is first in line. Two of his buddies have gone to find a bathroom. One of them — Keith Hobin, whom we interviewed Thursday — had to go home. Spending the night on the pavement, he said, wasn’t too bad. “I managed to get a couple hours sleep.”

Small crowd

5:49 Dawn at the Fifth Ave. glass cube. There’s a small crowd bunched together on the 58th St. side.

5:43: Approaching Fifth Ave. station. Wondering how the boys from New Jersey — whom we last saw huddled under big black umbrellas loaned to them by the Apple Store staff (see here) — fared overnight.

4:55: Waiting for the R train to Manhattan.

4:45: Out the door. Thursday’s rain has stopped. The sky is already lightening over Brooklyn.

4:30: File my first story of the day: “The iPhone 3GS stripped bare in Paris

3:40: Boot up. The New York Times online has stories about Democrats scrambling to scale back health care reform plans, the deepening confrontation in Iran and the Continental flight from Brussels that landed safely with a dead pilot in the cockpit. E-mail from Rapid Repair tells me they have posted the first iPhone 3GS teardown from Paris.

3:00: Alarm.

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June 18, 2009, 3:14 pm

Lines form for the new iPhone in New York and Tokyo

First in NYC line

Here are two postcards from the front lines of the smartphone wars.

The first, at right, shows three college students from Monclair, N.J. — Matt Dodd, 18, Sam Epstein,18, and Keith Hobin, 19 — huddled under borrowed umbrellas in front of Apple’s (AAPL) flagship New York Fifth Avenue store to buy the latest in multitouch cellular technology.

They arrived at 7 a.m. EDT, 24 hours before Apple is scheduled to begin selling the new iPhone 3GS to the public. The heavy rain hadn’t let up since they arrived and the forecast was calling for more rain into the night.

The second, below, appeared on the Japanese website +D Mobile (English translation). It shows the roughly 200 customers who queued up Thursday morning near the Softbank flagship store in Tokyo’s Omotesando shopping district to reserve their new iPhones, which won’t arrive in Japan until June 26.

According a second report, smaller lines had also formed at Softbank outlets throughout the city and at many of the electronics stores that line Tokyo’s Akihabara Electric Town.

The guys from New Jersey, who were among the first 15 people in line at the Fifth Avenue cube last July when the iPhone 3G went on sale, say they’re here for the new iPhone, yes, but mostly for the “fun.”

“It’s an experience,” says Keith Hoban, a freshman at Drexel University. “This doesn’t happen too often. It’s nice to just hang out at the Apple store, see what happens and be among the first to get it.”

ys_iph01

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April 24, 2009, 8:48 am

Apple Stores: The big chill

Fifth Ave store

Is there an Apple Store near you? Count yourself lucky, because the days of Apple’s (AAPL) aggressive expansion into the branded retail space are over — at least for now.

After opening more than 250 company-owned stores in eight years — an average of nearly 8 per quarter and a total of 46 in 2008 alone — Apple in the last quarter opened just one.

The building slowdown is one of several moves that Apple has made in response to what COO Tim Cook this week called a “horrendous economy.”

Although Apple’s revenues grew more than 8% year over year in its second fiscal quarter, the average take per store took a 17% hit, falling to $5.9 million from $7.1 million in 2008.

So Apple has been cutting back. According to its latest SEC 10-Q filing, the company has slashed the ranks of its retail employees — from the equivalent of 15,600 full-time workers at the end of its December quarter to 14,000 in March, a net loss of 1,600 jobs.

It has also been closing stores — temporarily, for renovations — at a stepped up pace. IFOAppleStore, the definitive source for news of Apple Store openings, has been reporting round after round of retrofits. The latest cycle calls for stores to be temporarily closed in Tigard, Ore., Woodland, Mich., and White Plains, N.Y.

As its SEC filing notes, Apple-owned stores requires a “substantial investment in fixed assets and related infrastructure, operating lease commitments, personnel, and other operating expenses. … The Company would incur substantial costs if it were to close multiple retail stores.”

That doesn’t necessarily mean Apple plans to shutter a lot of stores, but it could signal a major reassessment of its retail strategy.

I believe Apple is at a dangerous crossroads with retail and must make very careful decisions here,” writes a retail management expert who posts on Investor Village’s AAPL Sanity board under the handle nontekkie. Although he believes Apple is doing the right thing, he also sounds a warning:

And as sales drop, expenses must be cut. So Apple faces the conundrum of cutting payroll and risking the service part of their reputation because they have sent the sales portion of their product to Best Buy, Wal Mart, AT&T, etc etc. The product gains wider distribution, the customer gains convenience, but Apple risks running stores in the red or losing their service strength.

“Apple retail stores… are not meant to saturate a market, they need to be a destination.” (link)

During Wednesday’s conference call, CFO Peter Oppenheimer said the company was still on track to open 25 stores in fiscal 2009. But he added that about half of those stores are overseas. If he’s counting the 6 U.S. stores that have opened since Sept. 27, 2008, Apple could be planning to open as few as 6 new domestic branches before the end of fiscal 2009.

To get a feel for what it means to Apple’s customers for the company to open a new store in their city — and what a loss it would be for them if Apple’s expansion were to slow or stop –  check these out:

UPDATE: MacWorld’s Dan Moran shed some light on the full-time equivalent numbers in an article posted Monday. Among other things, he tracks the number of Apple retail employees going back to Q1 2006. Here’s his chart:

Retail employee fever chart

Bottom line: Apple may not have laid off 10% of its retail workforce, as Moran initially reported, but it has definitely cut back the hours they work.

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March 8, 2009, 12:27 pm

Apple’s first D.C. store: Design by committee

georgetown_final_renderingIt took five tries — and four redesigns –  but Apple (AAPL) last week finally won approval to build a retail outlet in Washington D.C., its first in the nation’s capital.

The final rendering, shown at right, was designed to echo the architectural features of the city’s historic Georgetown neighborhood. It was enthusiastically embraced by the same architectural preservation board that had soundly rejected Apple’s previous designs.

“This is beautifully executed,” Stephen J. Vanze, chairman of the Old Georgetown Board, told Karl Backus, Apple’s architect, according to the Washington Post. “We’re very pleased.”

The Post did not say if Steve Jobs is equally pleased. Apple purchased the building that now stands on the site, 1229 Wisconsin Ave. NW, in 2007 for $13.3 million, according to IFOAppleStore. It has been navigating the maze of D.C.’s multi-layered approval process ever since.

For a company that puts so much stock in cutting-edge design, it must have been painful to be second-guessed at every turn by a couple of neighborhood boards.

How far is the final version from Apple’s original conception? We tell the story through pictures below the fold.

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February 14, 2009, 1:34 pm

An Apple Store for Brooklyn?

brooklyn-bridgeNew Yorkers know better, especially these days, than to expect any sympathy from the rest of the country — even though the city, with three Apple Stores for a population of more than 8 million, is conspicuously underserved by the company’s retail outlets. (San Francisco’s three stores, by contrast, serve a population of fewer than 800,000.)

But what about Brooklyn? The most populous of the five boroughs (pop. 2.5 million) would be, as any cabbie can tell you, the fourth largest city in the United States if it weren’t yoked to Manhattan, Queens and the rest. It is home to tens of thousands of Mac users of every stripe — teachers, students, writers, artists, designers, musicians, mobsters — yet it has zero Apple Stores.

Which is why Brooklynites get so excited when there is any news, as there was this week, about Apple putting an outlet in their borough.

At a real estate roundtable on Tuesday, the developer of a huge condominium project on the Brooklyn side of the East River announced that an Apple Store was a “real possibility” for one of its prime ground floor retail spaces.

“There’s no deal,” developer Jeff Levine told the audience, according to the website Brownstoner. “But we are talking and they are interested.”

The EdgeEdge viewThe site in question is the Williamsburg Edge, a 575-apartment complex still under construction with two blue-glass towers and million-dollar views of the Manhattan skyline.

Sounds cool, huh? The problem for the rest of Brooklyn is that the Edge is on the edge of nowhere, with water on one side and Williamsburg on the other — a crazy quilt of ethnic enclaves teeming with Germans, Hasidic Jews, Italians, Puerto Ricans, Dominicans and, most recently, artists and indie musicians fleeing Manhattan’s exorbitant rents. There is only one subway — the crowded L line — and it connects Williamsburg to Manhattan, not to the main thoroughfares of Brooklyn.

Levine’s claim — true or not — reignited the fierce internecine rivalry among Brooklyn neighborhoods that broke out a year and a half ago when word first spread, via ifoAppleStore, that Apple was shopping for a Kings County location. The pros and cons of some of the contending sites were summarized at the time by a local website called Racked.

For the benefit of my neighbors and any scouts from Apple’s (AAPL) retail division who might be reading this, I’ve excerpted Racked’s handicapping and a few of the comments. But because none of this will mean anything to the rest of the world, I’ve put it below the fold.

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February 6, 2009, 2:49 pm

Apple has NOT banned Facebook

Apple store laptop displayHow do these rumors get started? Or, more to the point, how do they get perpetuated?

Late Thursday, a site called tinycomb (”Hand-Picked Tech News”) reported that Facebook had been banned “for life” from every Apple (AAPL) store in the United States — some 207 retail outlets in all, by my count.

This must have been one of those facts that was too good to check, because I’m pretty sure none of the half-dozen newspapers and blogs that repeated and embellished the story bothered to do any legwork to confirm it.

It certainly seems that most of the readers who applauded the reported ban — a couple dozen at tinycomb, nearly 40 at Digg, more than 120 at MacRumors — took it as fact.

“Why has this been kept under the radar?” asked SherwinNero at tinycomb.

“Has it really been kept under the radar,” answered Max, “or was it considered ‘not significant enough’ to put it on the front pages everywhere?”

Or is, just possibly, not true?

I know from experience that some Apple stores put limits on where on the Web you can take their demo machines — sometimes restricting Safari to Apple’s promotional pages.

And it’s certainly possible that individual stores have blocked Facebook — as MySpace has been blocked since May 2007 — because some of its members were hogging the machines.

Indeed, Ars Technica quotes an unnamed Apple employee who says his store has been blocking Facebook for about a month.

“It’s just trying to find a balance between letting people try out the computers, but not tying them up so others can try them as well,” he told Ars. (link)

But a person at Apple headquarters  in a position to know assures me that there is no nationwide ban on Facebook in effect — permanent or otherwise.

I’m headed to the nearest Apple store to check it out. If you’re in one now, let us know in the comment stream where you are and whether the demo machine you’re using will let you get to your Facebook page.

UPDATE: CNET’s Caroline McCarthy beat me to it, did the legwork, and confirmed that Facebook is accessible at all three Manhattan Apple Stores, although as suspected there are individual machines in those stores that will redirect you to an Apple Store page. See here.

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Philip Elmer-DeWittSilicon Valley veterans like to joke that Steve Jobs must be surrounded by a reality distortion field; if you get too close to him, you start to believe what he's saying. Thanks to the success of the iPod, the launch of the iPhone and the renewed interest in the Mac, Apple has made believers out of millions of customers - and made a lot of investors rich. But Philip Elmer-DeWitt believes that an ounce of skepticism never hurts when writing about the company. He should know. He's been covering Apple - and watching Steve Jobs operate - since 1982, first for Time Magazine, then for Business 2.0, and now for Fortune.
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