MacOS KenDensed: iPad mini Wins & So Does VirnetX

| MacOS KenDensed

Ken Ray makes the Kessel run in under 12 parsecsApple was happy with its iPad mini launch weekend sales, but at least a few analysts weren't quite as enthusiastic. VirnetX won its patent infringement lawsuit against Apple over FaceTime video conferencing, and Pixar named its offices after Steve Jobs. Pull up a chair and Mac OS Ken's Ken Ray will fill you in.

Hello, iPad mini
We sort of got one of the press releases this week I hoped we'd get, but not exactly. What Apple did was send out a press release saying that it had sold three million iPads in three days, those three being November 2nd, 3rd and 4th.

So the iPad mini's a hit then? Probably. While most of the focus of Apple's October event was on the iPad mini and while most countdowns and coverage of this past weekend were countdowns to and coverage of iPad mini sales and prices, there was another iPad announced on October 23rd and it too went on sale on November 2nd.

That would be the fourth-generation iPad that has a lot of people excited, and some iPad 3 owners more than a little perturbed.

The long and the short of all of that: Apple sold three million new iPads over the weekend, though we don't know how many were iPad mini and how many were the revised, full-sized iPad.

There's not even indication in the quotable quotes, like the one in the press release from Apple CEO Tim Cook, who said, "Customers around the world love the new iPad mini and fourth generation iPad."

Grrrr.

The follow-up line may make it not matter, though. CEO Cook continues, "We set a new launch weekend record and practically sold out of iPad minis. We're working hard to build more quickly to meet the incredible demand."

Well that's something. Three million iPads; a weekend record launch for WiFi-only iPads.

Not bad.

What Apple did say about the iPad mini specifically was that "Demand for iPad mini exceeded the initial supply and while many of the pre-orders have been shipped to customers, some are scheduled to be shipped later this month."

Which also sounds like, "not bad." It's kind of like "Fun with numbers without numbers, wrapped up in some numbers." It's not that Apple didn't give numbers, they just didn't give the exact numbers some people wanted.

This actually created an interesting back and forth between a few Apple news types online.

AllThingsD's Peter Kafka kind of took issue with Apple not breaking out individual sales.

Then The Loop's Jim Dalrymple took issue with Kafka's taking issue with Apple, saying, "Apple never breaks out numbers of multiple products in a category. iPods are iPods, iPhones are iPhones, and wait for it Peter, iPads are iPads."

"It is true that Apple reported iPhone 5 sales numbers," continues Dalrymple, "but that was a single product launch, not a multiple product launch like the iPads."

Then BusinessInsider's Jay Yarow took issue with Dalrymple's taking issue with Kafka's taking issue with Apple, saying:

Apple blogger Jim Dalrymple is attacking people who question Apple's decision to not reveal iPad Mini sales. He says, "Apple never breaks out numbers of multiple products in a category."

Except that's not true. Apple says how many iPod touches it sells on its earnings calls — 'iPod touch continues to account for over half of all iPods sold.' And when it releases a new iPhone or new iPad it talks about those new product sales, separate from ongoing, older iPhone and iPad sales. Besides, if there are rules in place, they're Apple's rules and it can break the rules for a special occasion like the launch of the mini.

What's that, where do I get it, and how do I trade it for that other thing?

I'm pretty sure they are each right to a certain extent.

iPad mini, by the Numbers. Sort of.
How did iPad mini sales go over the weekend? Depends who you ask.

The Mac Observer says "hundreds of people lined up at Apple's flagship store on Fifth Avenue in Manhattan," though that's being viewed differently by different people. For its own part, TMO says shorter lines at the NYC store shouldn't be surprising for a couple of reasons: for one, New York got the crap beaten out of it by Hurricane Sandy just one week ago, or four days before Friday's iPad mini releases. Then there's the idea that the iPad mini just won't be the immediate barn burner that devices like updates iPhones or iPad 2 were.

Can we put Friday's line into some kind of context, though?

The Mac Observer has the Wall Street Journal saying, "The crowds at Apple's main store in New York looked noticeably smaller than for the iPhone 5 launch in September, but still impressive considering how disrupted the city remains following the storm."

Even with that taken into account, however, Piper Jaffray analyst Gene Munster says, to him, this line looked about on par with other Apple product launches.

MacRumors has Uncle Gene doing what he's done for product launches such as Friday's since 2008: standing outside and counting the number of people in line. According to the Piper Jaffray analyst's account,

by 9:56 a.m. -- four minutes before the doors finally opened -- I counted 801 men, women and children. Only the iPhone 4 (1,300) and iPad 2 (1,190) drew bigger crowds.

So despite the superstorm aftermath and pricing concerns, the launch of the iPad mini drew the third longest line for an Apple product in four-years. According to Gene Munster.

How quickly those people were served, I do not know. What we do know, thanks to Topeka Capital Markets analyst Brian White, all of the Fifth Avenue store's iPad minis were gone in a little over two hours. Like sold-out.

MacRumors has White saying the white ones sold out by 11:15 Eastern, while the black ones were sold out at about 12:10.

Are there variables here? Sure. It's possible -- I don't know how likely but possible -- that Apple shipped fewer of the machines to the New York City store, thinking that New Yorkers might have other things on their mind to end the week.

Third longest line, though. Curious.

Sexy and strange as the Fifth Avenue Store line might be these days, there are many more Apple Stores outside the five boroughs as in them. Barrons has R.W. Baird analyst William Power saying his "team" fanned out to "Apple stores in Dallas, Chicago, and Milwaukee, and that lines were seen of about 20 to 30 people, 'a sharp contrast to other product launches which typically draw several hundred per store on launch day.'" And this, he takes in stride, writing in his research note:

We expected smaller lines this morning given the proximity to the iPhone 5 launch, the lack of a cellular version and the fact that this is only a "quasi" new product. We expect Apple to sell approximately 6-8 million iPad Mini units this quarter.

This sounds like a man with a good head on his shoulders.

Similarly, I was at the Walden Galleria Apple Store Friday night. Got to play with an iPad mini. I like it, though I'm not dying to own one. Either way, this is not about me. One of the workers there said that, while they did still have some of the devices on hand, sales had been pretty consistent throughout the day. Hot sure how many that is, but you've gotta figure it's anywhere from a few to several an hour.

I also read somewhere, and forgive me for losing where, but I also read somewhere that lines could be expected to be shorter as more people do the pre-order thing. Pre-order iPad minis sold out, so there's a bunch of people who might have stood in line who decided they'd rather secure their device early and sleep in on Friday instead.

The VirnetX Patent Smackdown
I've joked about one of Apple's cases versus Motorola Mobility being "the forgotten lawsuit," but the fact is, there are so many lawsuits with which Apple's involved at this point, I'd imagine most of them are forgotten cases.

That said, one of the many forgotten cases has hit Apple in a fairly hard way. TechCrunch says a court has ruled that Apple's FaceTime video-chat technology infringes four patents held by the company VirnetX. The piece says the "U.S. Court for the Eastern District of Texas has ordered Apple to pay more than $368 million in damages to VirnetX."

I say that hits the company in a "fairly hard way" because, while $368 million is a lot of money for most people and most companies, Apple's sitting on somewhere in the neighborhood of $121 billion. So they could pay the VirnetX fine with no stress whatsoever, though it seems at least as likely -- if not more so -- that the company will try first to appeal the East Texas ruling.

Steve Jobs in is the House
And finally this week, talk about your crazy, circuitous something-or-other.

A couple of weeks ago, The Walt Disney Company bought Lucasfilm for something like $4 billion. Over two-and-a-half decades ago, Steve Jobs bought Pixar from Lucasfilm for $5 million, selling it to Disney 21-years later for $7.5 billion. Sounds like Disney would have ended up with Pixar either way, except without Jobs, there would be no Pixar.

While he bought them as a hardware company, he kind of got turned on to some of the Pixar staff's idea that they could make their own computer-generated shorts and, eventually, their own full-length features. So he bankrolled them when others might have pulled the plug.

Funny how things work. And none of that has anything to do with this week's news; it's just funny how things work. What has to do with the news is a new honor for Jobs from what was -- for a while -- his other company.

The Unofficial Apple Weblog says Pixar has honored Jobs by naming the studio's main building the Steve Jobs Building. Sure I could have made that shorter, but I didn't.

I think it's funny how things work.

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