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Greatest fans of iPad 2: Scalpers

With resellers first in line and the supplies limited, few devices left for others

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By Billy Baker
Globe Staff / March 26, 2011

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CAMBRIDGE — The garage at the CambridgeSide Galleria opens at 4:30 a.m., and yesterday a line of cars was waiting when a security guard raised the gate to begin what has become a ritual these last two weeks: the iPad dash.

Down the ramp. Park quickly. Sprint up two flights of escalators — they won’t be turned on for hours — and race to the front of the Apple Store. Then wait 4 1/2 hours for the store to open and hope for the best.

Two weeks after the iPad 2 went on sale, the competition to buy it remains brutal. Online orders face a wait time of three to four weeks (down from four to five weeks just a few days ago), and Apple Stores around the country are experiencing epic lines for the few devices that are released each morning.

At the Galleria yesterday, 22 people were in line by 4:35 a.m., and 21 of them shared something in common: They were there to buy and then resell the devices overseas, where they said the tablet computers can fetch more than triple their retail price.

“We’ve got people at all of the Apple stores around here,’’ said one of the resellers, who declined to give his name, but said he had been out every morning since the product launched on March 11. “Especially in New Hampshire, because there’s no sales tax.’’

The man said that he and other resellers deliver the iPads to someone who drives them to a buyer in New York each day — whom he said pays them close to double the retail value. He said a black market thrives in countries like Russia and China, where the devices may be sold in some electronics stores but are typically rare and hard to find.

And then there was Jenneen Sambour, 27, a chef at the Royal Sonesta Hotel just across the street, who was the only one there because she simply wanted an iPad. Or, rather, another iPad. She already has, and loves, the first generation.

“The new one is faster and thinner,’’ she said, attempting to justify the purchase.

“And it’s prettier,’’ she added, though it sounded more like a question.

As the morning went on, Sambour was eventually joined by others like her, the Apple fans who have turned product releases into mini-festivals in which the giddy experience of waiting in line with fellow diehards is, they say, part of the fun.

With the iPad 2, Apple is using an old trick of controlling supply to keep the hype high, said Sarah Rotman Epps, a senior analyst at Cambridge-based Forrester Research who specializes in tablet computers.

“But there’s a fine line where they could be missing out on sales, because you have people going into the Apple stores, having this great experience testing out the product, but then they’re not able to make an impulse buy,’’ said Epps, who predicts Apple will sell 20 million iPads in the United States this year, double the number last year.

At the Galleria yesterday, as the scalpers at the front of the line passed the time playing cards, pulling pranks on companions who had fallen asleep, and discussing what impact yesterday’s release of the iPad 2 in 25 more countries would have on resale prices, there was some real resentment brewing at the back of the line.

“Apple should be ashamed of this,’’ said Vildan Gok, who was visiting from Turkey and making her second attempt to buy an iPad at the Galleria. “If they allow this to go on, they are part of this crime. It should be one per person. Who needs two?’’ she said. Apple allows people to buy two iPads at a time. An Apple representative yesterday declined to comment on the black market resellers.

Inna Markus, a psychology graduate student at Harvard who was in line just after the last of the resellers, said the notion of fast profits was giving her ideas of her own. “Now I’m thinking of getting a second one to sell,’’ she said.

At 8:15, an Apple employee appeared with about 80 white cards — representing the number of iPads they had in stock that day — and began handing them out. By then, 77 people were in line. All of the scalpers wanted two each — to buy Apple’s $829 64GB model that runs on the AT&T 3G network, which works overseas. As the Apple employee’s stack of cards dwindled, grumbling at the back of the line intensified.

When the employee got to Gok, who was number 25 in line, the model she had come for was no longer available. The couple just in front of her got the last claim to one. She was not happy and stormed away, though she did not rule out making one more attempt before she returns to Turkey.

Markus settled on her plan to buy an extra iPad to sell and took two cards. Almost immediately, someone from the back of the line offered her $150 for one of her cards. She thought hard about it but then decided against it, figuring she could make more by buying the extra iPad and selling it online.

The last card went to Patrick Harrington, a 27-year-old web designer from Somerville who already owns the first generation iPad. He’d come to get the 32GB wi-fi model, which sells for $599, but all they had left was the 64GB version, which costs $100 more.

“I don’t need it, but . . .,’’ he said. Then he got on his iPhone and began texting his wife for permission to spend even more. Her reply: Yes, but we’re not doing this again next year.

Back at the front of the line, as the resellers got ready to go in to make their purchases, one turned and looked at the customers well back in the line said he didn’t understand the willingness to go to such lengths merely to own an iPad.

“It’s a useless device,’’ he said. “You can do the same things with your phone. And if you want to read a book, you can go to the library and get them for free. Technology has made everyone lazy.’’

Billy Baker can be reached at billybaker@globe.com.