For some, the longest week in iPhone history

Long lines, delayed activations, short supplies ding Apple image

With the iPhone 3G launch now a week behind us, it's time to look back and see how the second coming of the iPhone turned out.

Short answer: For a lot of people, not so good.

If you absolutely had to have the new iPhone 3G as soon as the Apple and AT&T stores opened last Friday, you were most likely standing in slow-moving lines, waiting for hours -- sometimes while being mocked by an inept TV reporter trying to get "the story."

The glacial drift of these lines, while they were encouragingly in the general direction of the store entrance, was due in part to the new policy of not allowing customers to buy the hardware and take it home to activate the unit with AT&T's central command via iTunes and your home computer. That's how it was done last year, when the first iPhone hit the market. Even if all had gone as planned, this policy would have slowed the take-my-credit-card-and-let-me-go process. But all did not go as planned.

First off: hardware. As of earlier this week, iPhone 3Gs are sold out in (in alphabetical order) Connecticut, Delaware, Hawaii, Indiana, Iowa, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, New Jersey, New Mexico, Oregon, Rhode Island, Tennessee, Utah, Washington, Wisconsin. Now, try singing that to Johnny Cash's I've Been Everywhere . As of early yesterday, 27 per cent of Apple's stores had at least one iPhone 3G model in stock, and analysts now say it could be two to four weeks before its stock is replenished. (You can check for yourself using Apple's stock-checking tool online.)

Even in places where stock held out on launch day, it wasn't exactly manna-from-heaven time. Friends told me about four-hour waits in Manhattan and similar fun times in Tampa. Apple stores, AT&T stores -- it didn't matter.

What's going on? It's true that people do react as capitalists dream they would when faced with an economic of scarcity: the harder it is to get something, the more fervidly people will want it. (Remember Beanie Babies?) But the price of an iPhone 3G is fixed. It's not as though Apple will sell more, or get a higher price, by throttling supply. It seems that the supply chain mucked up somewhere along the way from manufacturing to customers' hands.

This isn't like the new-and-improved Apple that's been on a roll in recent years. Mac fans are used to shipping delays, or even poor allocations or distributions. Many longtime Mac users can remember Apple's bad old days of flooding cheap stores with an incomprehensible slew of Performa SKUs -- but that was in another time, and besides, that version of the company is dead. While the delays in Power Macs, Mac Pros and the like were a pain for those waiting for their shiny new computers, they were hardly on the scale of this past week's mess.

The desktop and laptop shipping problems were, at times, due to choked supplies of parts such as CPUs. In the Power PC days, Apple even had to step back its top-of-the-line Mac's CPU because Motorola couldn't push out chips with the promised megahertz. Could the iPhone 3G shortage be due to a similar problem? It's hard to say. Although manufacturers of cell phone components are used to churning out parts by the hundreds of thousands, the iPhone has a few unique tweaks, such as the touch screen and the CPU. Then again, maybe Apple could buy up only so much NAND flash memory.

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Dan Turner

Computerworld
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