By Nicole Maestri
Reuters
Tuesday, September 19, 2006; 12:22 PM

NEW YORK (Reuters) - Mattel Inc. (MAT.N) on Tuesday unveiled the 10th anniversary edition of its Tickle Me Elmo doll, a new red plush "T.M.X. Elmo" that slaps its leg and keels over in a fit of laughter when tickled.

The doll, which stands for "Tickle Me Extreme" or "Tickle Me Ten," has been shrouded in secrecy for months as Mattel tried to generate buzz for the latest Elmo version and kick off the holiday toy-selling season with a bang.

The launch was greeted by a line of eager shoppers at Toys "R" Us' Times Square store, which opened an hour early for the event. Sales associates, decked out in Elmo shirts, said many of the customers who waited in line snapped up three or four of the $39.99 dolls.

Steve Fox, an attorney, stopped by the store on the way between court in lower Manhattan and his office to pick up a doll for his daughters, aged 2 and a half and 7 months.

"She does not know there's a new Elmo," he said of his eldest daughter.

But the attorney, who said he had never purchased a toy on the day of its launch, was planning to surprise her with Elmo when he got home from work.

"T.M.X. Elmo" is being introduced 10 years after Tickle Me Elmo, which giggled when its stomach was pressed, created a toy craze. The doll flew off store shelves as parents and grandparents scrambled to secure one of the scarce dolls for their children in time for the holidays.

The new Elmo, made by Mattel's Fisher-Price unit, was delivered to retailers two weeks ago, but was not be put on store shelves until today, according to Mattel.

The Times Square Toys "R" Us had nearly sold out of its initial shipment of the dolls by 11:00 a.m. and was waiting for a second shipment to arrive in the afternoon. It would not disclose how many Elmo dolls it was given to sell.

The decision to keep "T.M.X. Elmo" a secret was a highly unusual move in an industry that typically previews its toys months in advance to drum up positive reviews and guarantee space on retailer's shelves.

"I think it's just short of a miracle" that no one spilled the secret, said Gina Sirard, vice president of marketing at Fisher-Price.

Jim Silver, publisher of Toy Wishes Magazine, was one of the few industry executives to see the doll before its official launch.

"When I saw Elmo, I was laughing very hard," he said in an interview before the launch. "It's not your typical Elmo, but it is funny and it delivers."

Since Tickle Me Elmo's introduction in 1996, there have been numerous versions of the doll, including "Knows Your Name Elmo," that could greet a child by name.

The latest Elmo has "tickle spots" on its chin, tummy and foot. When a child tickles Elmo once, the doll laughs, slaps his leg, falls down into a sitting position and then stands up while laughing.

The second time Elmo is tickled, the doll repeats that pattern, but then falls backward and starts kicking his feet while laughing. It then stands up and asks to be tickled again.

The third time Elmo is tickled, the doll goes through the first two patterns and then rolls over onto its tummy, thumps his hand on the floor, rolls onto his back and stands up again.

Retailers selling the doll include Wal-Mart Stores Inc. (WMT.N), Toys "R" Us and KB Toys. The doll is geared toward children ages 18 months and older.

Mattel shares declined 12 cents to $19.35 in midday trading on the New York Stock Exchange.