Heavy demand expected as iPad goes on sale Friday

The customary storefront crowds are expected to gather as Apple's latest iPad goes on sale Friday. Long lines are likely even though customers could have ordered the new tablet computer ahead of time for first-day home delivery.

The third version of Apple's iPad will be available in the US and nine other countries. The new model comes with a faster processor and a much sharper screen. It also boasts an improved camera, similar to that of the latest iPhone.

For many customers, visiting a store in person — instead of having one shipped — offers consumers a chance to mingle with die-hard Apple fans.

Two years after the debut of the first iPad, the device's launch has become the second-biggest "gadget event" of the year, after the annual iPhone release.
Although Apple's product releases have become a cultural phenomenon, the cult-like crowds that line up outside of its stores have made the company vulnerable to gentle ribbing from its competitors.

Television ads for Samsung's Galaxy line of phones routinely poke fun at people who are camped out in line for what appears to be an Apple product release.

The spots, in heavy rotation since December, portray Apple fans as clueless drones who think they're too cool to buy gadgets made by companies other than Apple. In one of the commercials, a bearded hipster says he could never buy a Samsung phone because he's "creative." A bystander observes: "Dude, you're a barista."

For some customers, standing in line will offer the only chance to get a new iPad on Friday. Apple quickly ran out of supplies it set aside for advance orders. The company was telling customers Thursday to expect a two- to three-week wait for orders placed through its online stores.

The new iPad is called just that: "the new iPad." Apple declined to give it a name like "iPad 3" or "iPad HD." That is consistent with its naming practice for iPods, MacBooks and iMacs, but a break with the way iPhone models are named.

In the US, the new iPad starts at $499, the same as the previous model, the iPad 2, when it debuted a year ago. The iPad 2 remains in stock, for $100 less.

Despite competition from cheaper tablet computers such as Amazon.com Inc.'s Kindle Fire, the iPad remains the most popular tablet computer. Apple has sold more than 55 million iPads since its debut in 2010, including some 40 million last year. Researchers estimate that the iPad has more than 60 percent of the market for tablets.

The iPad's accomplishments have contributed to the company's success on Wall Street. Apple's stock touched $600 briefly for the first time on Thursday. Apple is the world's most valuable company, with a market capitalization of nearly $555 billion. It topped $500 billion for the first time in late February, a market value peak where few companies have ventured.

Apple's retail stores are likely to draw the biggest crowds because they usually have the largest launch-day supplies, but the tablet will also be sold at Best Buy, Radio Shack, Sam's Club, Target and Walmart.

AT&T and Verizon Wireless will also sell iPads, but only models with built-in cellular broadband modems. Those models use the companies' latest high-speed wireless networks, based on so-called "4G LTE" technology. They'll be the first Apple devices with that capability built in.

The cellular-capable models cost $130 more than Wi-Fi-only versions. There's a separate monthly data fee, but none of the long-term contract requirements typical with phones. The priciest iPad goes for $829; it comes with cellular access and four times the storage capacity of the basic, $499 model.

Apart from the US, Puerto Rico and the U.S. Virgin Islands, the device goes on sale the same day in Australia, Canada, France, Germany, Hong Kong, Japan, Singapore, Switzerland and the United Kingdom.

A week later, another 25 countries will get the device, altogether making for an unusually fast product roll-out for Apple.

How US lost out on iPhone work

When Barack Obama joined Silicon Valley's top luminaries for dinner in California last February, each guest was asked to come with a question for the president.

But as Steven P Jobs of Apple spoke, President Obama interrupted with an inquiry of his own: what would it take to make iPhones in the United States?

Not long ago, Apple boasted that its products were made in America. Today, few are. Almost all of the 70 million iPhones, 30 million iPads and 59 million other products Apple sold last year were manufactured overseas.

Why can't that work come home? Mr Obama asked.

Mr Jobs's reply was unambiguous. "Those jobs aren't coming back," he said, according to another dinner guest.

The president's question touched upon a central conviction at Apple. It isn't just that workers are cheaper abroad. Rather, Apple's executives believe the vast scale of overseas factories as well as the flexibility, diligence and industrial skills of foreign workers have so outpaced their American counterparts that "Made in the USA" is no longer a viable option for most Apple products.

Apple has become one of the best-known, most admired and most imitated companies on earth, in part through an unrelenting mastery of global operations. Last year, it earned over $400,000 in profit per employee, more than Goldman Sachs, Exxon Mobil or Google.

However, what has vexed Mr Obama as well as economists and policy makers is that Apple - and many of its high-technology peers - are not nearly as avid in creating American jobs as other famous companies were in their heydays.

Apple employs 43,000 people in the United States and 20,000 overseas, a small fraction of the over 400,000 American workers at General Motors in the 1950s, or the hundreds of thousands at General Electric in the 1980s. Many more people work for Apple's contractors: an additional 700,000 people engineer, build and assemble iPads, iPhones and Apple's other products. But almost none of them work in the United States. Instead, they work for foreign companies in Asia, Europe and elsewhere, at factories that almost all electronics designers rely upon to build their wares.

"Apple's an example of why it's so hard to create middle-class jobs in the US now," said Jared Bernstein, who until last year was an economic adviser to the White House.

"If it's the pinnacle of capitalism, we should be worried."

Apple executives say that going overseas, at this point, is their only option. One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone's screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.

A foreman immediately roused 8,000 workers inside the company's dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.

"The speed and flexibility is breathtaking," the executive said. "There's no American plant that can match that."

Similar stories could be told about almost any electronics company - and outsourcing has also become common in hundreds of industries, including accounting, legal services, banking, auto manufacturing and pharmaceuticals.

But while Apple is far from alone, it offers a window into why the success of some prominent companies has not translated into large numbers of domestic jobs. What's more, the company's decisions pose broader questions about what corporate America owes Americans as the global and national economies are increasingly intertwined.

Companies and other economists say that notion is naive. Though Americans are among the most educated workers in the world, the nation has stopped training enough people in the mid-level skills that factories need, executives say.

To thrive, companies argue they need to move work where it can generate enough profits to keep paying for innovation. Doing otherwise risks losing even more American jobs over time, as evidenced by the legions of once-proud domestic manufacturers - including G.M. and others - that have shrunk as nimble competitors have emerged.

Apple was provided with extensive summaries of The New York Times's reporting for this article, but the company, which has a reputation for secrecy, declined to comment.

This article is based on interviews with more than three dozen current and former Apple employees and contractors - many of whom requested anonymity to protect their jobs - as well as economists, manufacturing experts, international trade specialists, technology analysts, academic researchers, employees at Apple's suppliers, competitors and corporate partners, and government officials.

Privately, Apple executives say the world is now such a changed place that it is a mistake to measure a company's contribution simply by tallying its employees - though they note that Apple employs more workers in the United States than ever before.

They say Apple's success has benefited the economy by empowering entrepreneurs and creating jobs at companies like cellular providers and businesses shipping Apple products. And, ultimately, they say curing unemployment is not their job.

"We sell iPhones in over a hundred countries," a current Apple executive said. "We don't have an obligation to solve America's problems. Our only obligation is making the best product possible."

Sources: Apple to launch iPad 3 in March

Apple Inc's next iPad, expected to go on sale in March, will sport a high-definition screen, run a faster processor and work with next-generation wireless networks, according to three people familiar with the product.

The company's manufacturing partners in Asia started ramping up production of the iPad 3 this month and plan to reach full volumes by February, said one of the people, who asked not to be named because the details aren't public. The tablet will use a quad-core chip, an enhancement that lets users jump more quickly between applications, two of the people said.

Chief Executive Officer Tim Cook is counting on the new model to ward off mounting competition in a market that Apple pioneered two years ago. After its debut in 2010, the iPad emerged as the company's second-biggest source of revenue -- after the iPhone -- and inspired rival products from Amazon.com Inc and Samsung Electronics Co. Apple has sold more than 40 million iPads, generating at least $25.3 billion in sales.

Natalie Kerris, a spokeswoman for Apple, said the company doesn't comment on rumor and speculation.

The Cupertino, California-based company has been working on making the iPad compatible with a wireless standard called long- term evolution, or LTE, said one of the people. Carriers such as Verizon Wireless and ATT Inc are rolling out LTE networks to give users faster access to data.

Smartphone makers, including Samsung, Motorola Mobility Holdings Inc and Nokia Oyj, have already introduced smartphones that work on the faster networks. Apple is bringing LTE to the iPad before the iPhone because the tablet has a bigger battery and can better support the power requirements of the newer technology, said one of the people.

The new display is capable of greater resolution than the current iPad, with more pixels on its screen than some high- definition televisions, the person said. The pixels are small enough to make the images look like printed material, according to the person. Videos begin playing almost instantly because of the additional graphics processing, the person said.

The new iPad is being assembled by Apple's main manufacturing partner, Foxconn Technology Group. Like most technology companies, Apple contracts with companies in Asia for labor to assemble its devices. Foxconn, which also builds the iPhone and other Apple products, gets about 22 per cent of its sales from Apple, according to supply-chain data compiled by Bloomberg.

Mass production began at the start of this month, with factories running 24 hours a day in China, one of the people said. Manufacturing will halt over China's Lunar New Year holiday this month and then ramp back up to a peak in February, the person said.

The introduction of the new iPad will be Apple's first major hardware release since the death of company co-founder Steve Jobs in October. The company is hosting an education event focused on electronic textbooks next week that won't include any hardware introductions, said a person familiar with the matter.

Apple, the world's largest technology company by market value, was little changed yesterday in US trading at $419.81. The stock rose 26 percent in 2011, marking its third straight year of gains.