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It's iPad launch week, but the iPhone still dominates

The new iPad Air 2 and iPad Mini 3 are overshadowed by continued demand for the new iPhone 6 and iPhone 6 Plus.

Ben Fox Rubin Former senior reporter
Ben Fox Rubin was a senior reporter for CNET News in Manhattan, reporting on Amazon, e-commerce and mobile payments. He previously worked as a reporter for The Wall Street Journal and got his start at newspapers in New York, Connecticut and Massachusetts.
Ben Fox Rubin
3 min read

The line outside Apple's Fifth Avenue store Thursday, where the iPhone 6 continues to be the big draw. Ben Fox Rubin/CNET

NEW YORK -- With two new iPad tablets going on sale this week, hundreds of customers braved the rain and wind Thursday morning, patiently lining up outside Apple's flagship Fifth Avenue store in Manhattan.

Here's the thing: those folks were buying iPhones.

The new iPad Air 2 and iPad Mini 3 became available in some Apple stores Wednesday. But, for the first time since its tablet line launched in 2010, Apple opted to forgo a specific launch date, vaguely referencing its launch this week before it quietly made its debut in select cities.

The Fifth Avenue scene underscores the opposite paths that the iPhone and iPad franchises have taken in regard to demand. While the iPhone 6 and iPhone 6 Plus remain hot sellers, there was a noticeable lack of excitement with the recent unveiling of the iPad Air 2 and iPad Mini 3. It's a further illustration of the slackening demand for tablets, which are starting to see slowing sales growth.

Apple may have kept the iPad launch date vague because its stores have been inundated with buyers of its new iPhone 6 and 6 Plus smartphones since it started selling the devices on September 19. Juggling lines for both the iPhone and iPad at stores may have been too much to handle.

Backing that view, an Apple employee at the Fifth Avenue store said Thursday that the soft launch of the iPads was prompted by continued lines for the new iPhones. The employee said the store has had lines outside every day for the past month, with the location selling out of every iPhone it gets shipped. The line outside on Thursday would have been longer had it not been for the rain, the employee said.

The Apple store at Grand Central Terminal also had an iPhone line, but it was far smaller, with about 40 people waiting on Thursday morning. Only a few potential customers were checking out the retail displays for the new iPads at both Manhattan locations.

While the two stores represent only a snapshot of the interest in Apple products, their situation fell in lockstep with the broader picture Apple CEO Tim Cook painted on Monday during the company's earnings conference call. Cook said that the supply of new iPhones isn't close to meeting demand, and he couldn't say when the company could get through its inventory constraint issues.

"We're selling everything we're making," he said.

An Apple representative declined to comment Thursday.

Both AT&T and Verizon, which reported their quarterly results over the past two days, said they continued to see inventory issues with the new iPhones.

The iPhone 6 and 6 Plus, which offer larger screens than past designs, have brought in record sales, with Apple selling 39.3 million iPhones in its latest quarter, up 16 percent from a year earlier. The iPhone is much more important to Apple than the iPad, since it's Apple's biggest moneymaker by far. So underplaying the new iPads for the good of the new iPhones may even benefit Apple's earnings overall.

Koos, right, and Nemo Zonderland waiting for the iPhone 6. Ben Fox Rubin/CNET

The soft launch also speaks to the continued lack of vigor in iPad demand, with the company's tablet business on Monday posting its third straight quarter of declining sales. The iPad Air 2 is thinner than older models and provides a new processor, as well as adds a Touch ID fingerprint sensor. Yet those new features may not be enough to goose flagging sales and convince customers to upgrade their older tablets, as evidenced by the scene on Thursday.

Outside the Fifth Avenue store, Koos Zonderland and his son Nemo waited in the rain to get a new iPhone 6. The family, which was visiting from the Netherlands, already has two iPads, with one that's about 4 years old. The elder Zonderland explained that he sees no need to replace either model -- they both work perfectly well.

"The iPhone is just a small iPad, actually," he added.