How To Know If The iPad 2 Is A Success: Follow The Curious

Apple employees iPad 2 launch San Francisco

There is no question that Apple (NSDQ: AAPL) loves the fact that thousands of people are willing to wait in lines for its new products. What really matters, however, are those with more important or relaxing things to do on a Friday night.

The Moses of Silicon Valley-Apple CEO Steve Jobs-came down from on high with yet another tablet at 5 p.m Friday evening in cities around the U.S. as iPad 2 sales began amid longer-than-expected lines in many parts of the country. Years after retail analysts fretted about the death of the “brick-and-mortar” store, people once again proved willing to queue up by the thousands outside Apple’s shiny metal cathedrals for something they weren’t willing to wait two or three weeks to receive via the Internet.

Lines at Apple stores are an amazing thing. The line outside Apple’s downtown San Francisco store stretched all the way around a city block, with blue-shirted Apple retail employees handing out flash cards to those waiting in line with the color and capacity of their desired iPad 2, so those orders could be fulfilled as quickly as possible once they finally reached the front door of the store.

Over the years–especially since Apple stopped appearing at MacWorld–the lines have become almost a carnival-like event (even outside of sunny California), offering a shared experience with like-minded people who are genuine fans of the latest and greatest that the tech industry has to offer. In recent years the lines have also taken on another dimension, as spots in line become commodities for those hoping to get their hands on iPads or iPhones for resale in other markets, but for the most part they remain gathering spots for the devoted.

However, even the people stopping by on their way to the Powell BART station to gawk at the lines on Stockton Street knew what the event was all about, murmuring to their companions about iPads, iPhones, and Apple’s knack “for making you feel bad about your Christmas presents,” as one passerby was heard saying.

Those are the people that really matter. Apple sold 300,000 of the original iPad on its first day last year, when it was Apple’s debut product in a category that wasn’t fully understood. But it wasn’t really until the next 14.7 million iPads left Apple stores throughout the rest of the year that it became clear: Apple was once again forcing an industry to dance to its tune, with competitors like Samsung’s Galaxy Tab, Motorola’s Xoom, and forthcoming models from HP (NYSE: HPQ) and RIM (NSDQ: RIMM) hastily borrowing much from Apple’s iPad concept.

All the same, first-day sales will be heavily scrutinized on hopes of playing Apple’s stock on Monday. Analysts are predicting anything between 600,000 and 1,000,000 iPads the first weekend, and any one estimate should come with a salt shaker. And once the number hits, any proclamations of success or failure based on those first-day or first-weekend figures should be treated with an equally skeptical eye.

What’s not controversial, however, is the notion that Apple is poised to sell a lot more iPad 2s. One key advantage for Apple this time around is that it has cast the distribution net far and wide for the iPad 2, with availability at well-known places like Best Buy and Wal-Mart (NYSE: WMT) as well as its network of stores and its carrier partners, not to mention online sales. Last year, it sold the original iPad at its just its own stores and “most Best Buy stores” on launch weekend, and didn’t launch a version that could connect to AT&T’s data network until the following month.

But perhaps the most powerful catalyst for iPad sales is that Apple has convinced a lot of those who were sitting on the sidelines in 2010, waiting to see if the iPad was everything Apple had promised, to at least consider buying a tablet in 2011. Unlike smartphones, which average consumers knew about before the iPhone but were mostly used by businesspeople, tablets were a much more unfamiliar concept in 2010 and no one company had sold a similar product in any kind of real volume before the original iPad launch.

The sales numbers from last year bear this out: even though Apple sold 300,000 iPads on its first day, it took the company almost a full month to sell another 700,000, meaning there was a huge surge amid the hoopla of a launch event but it took weeks of momentum and word-of-mouth reviews for sales to really pick up. Apple then went on to sell 3.27 million iPads in its first full quarter, 4.2 million in its second full quarter, and really hit its stride in the fourth calendar quarter of the year with 7 million shipments and a total of 15 million for the year.

This year, tablets are a known quantity, the talk of the Consumer Electronics Show in Las Vegas in January. Make no mistake, all these companies read the same market research reports, and that implies a serious amount of pent-up demand for tablets in general that Apple is poised to capture. Sure, there are competitors this year (although HP and RIM’s offerings have yet to ship), but few among the sizable tech reviewer community seem to think that any are superior the iPad 2, and many feel they are in several ways behind Apple’s pace.

It’s also important to keep things in perspective. While 15 million iPads in three quarters is definitely a large and successful number for such a new product, Apple sold 19 million iPods, a product it rarely hooks up to its vaunted marketing machine anymore, in the fourth quarter alone alongside a mere 16 million iPhones sold that quarter. iPads are obviously new and more expensive, and so therefore won’t sell at quite the same clip, but a true indicator of the staying power of the tablet will be when Apple and/or other tablet companies are moving shipments in those volumes.

So while this weekend’s tech coverage will likely focus on that initial number, consider a few others before dictating whether or not Apple has done it again: such as, how long will it take until 1,000,000 have been sold, how may will it sell in its first full quarter, and how many will it sell in the holiday quarter. Rumors persist that Apple has another iPad up its sleeve for the holiday season, which could skew iPad 2 adoption numbers, but that remains to be seen.

Apple has a reputation among the financial community for consistently downplaying its financial expectations for an upcoming quarter only to blow those numbers out of the water once the true figures arrive. When it comes to product sale predictions, however, Jobs showed little interest in playing that cat-and-mouse game at the company’s preview event last week, declaring 2011 to be “the year of the iPad 2.”

Early adopters are welcome customers for tech companies. It’s the slightly more cautious ones who present the greatest overall opportunity, the ones who stopped to shake their heads at the Stockton Street spectacle but were still curious. It’s the ultimate reaction of that group to the iPad 2 launch that will really tell if tablets are ready for prime time.

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