Apple's iPhone launch – a disaster in the making?

iPhone

The new Apple iPhone is a very desirable bit of kit, no doubt about it. Even at the $499 (4GB) or $599 (8GB) asking price.

I spoke to a contact in Apple about the iPhone which they are launching with AT&T this coming Friday and, from what he said, the launch sounds like it has all the makings of a disaster in the works!

First off the phone is sold brick-locked – in other words the iPhone is dead when you get it. You have to bring it home, hook it up to an Internet connected computer , and activate it online.

Remember, there are 1m of these puppies pre-sold. What happens when 1m people all try to log in to the site to activate their phones around the same time. How well will the activation server infrastructure hold up?

Presumably, if you have a PC, this process also involves the installation of iTunes and Safari (Macs come with these installed).

Then there is the issue of the iPhone being sim-locked. And I don’t just mean that the phone is locked, nope, the sim is locked physically into the phone! It can’t be removed.

Seemingly there is a way to map your existing number to the sim in your iPhone – this will be part of the activation process. But you can’t take your sim out of the phone for any reason. What happens when you want to upgrade to a new phone? No idea. Presumably this will be straightforward if your new phone is another iPhone – but if it is not…

Joy, oh joy, I can see lots of potential for support issues right there.

Keep in mind also that the phone is not being sold to business customers – the AT&T shops are only going to sell the phones to consumers.

Consumers with a good credit record. If you have any history of bad debts, you can forget about getting an iPhone! They won’t sell you one.

Why is the credit record important? Well, if you buy an iPhone, you are signing up to a two year AT&T contract with a minimum spend of $60 per month! $60 per month for two years is $1440. So, after the initial purchase, you are committing to give Apple and AT&T at least another $1440.

So, if you are a technically minded consumer, have access to an Internet connected computer, can logon to the activation site, have a good credit history and a steady income for the next two years, it should be no problem.

I’d hate to be working for AT&T or Apple’s support next weekend!

UPDATE: – I see AppleInsider are reporting that the first shipments of the iPhone have arrived in the US under unprecedented security.

Further Update: Apple have confirmed that activation of the phones is done by the consumer “in the comfort and privacy of their own home or office, without having to wait in a store while their phone is activated” as I mentioned in the post above and that the price plans start at $60 per month, again, as I said above.

35 thoughts on “Apple's iPhone launch – a disaster in the making?”

  1. Hi Tom until the last paragraph I wasn’t with you. Most sales will go to Mac users who already use iTunes/Safari. Docking it will probably be easy as most MAC stuff is. I think the SIM issue is a red herring if I can use a PAC number to move my existing number.

    $1440 at first seems very expensive but that is only $720 per year or £360 which is cheaper than the Nokia n95 under contract to T-Mobile in the UK. I personally will wait for the next version of the iPhone which hopefully will add in support for 3G, video recording and be cheaper.

    That said I do agree that is has too many possible points of failure. Right now I like the N95 with video recording, kyte.tv support etc.

    I am sure after this post that Apple PR will be sending you a free one to prove you wrong.

  2. That reminds me of Half Life 2’s launch and the ensuing problems with thousands of people trying to activate the game on Steam. Locking the SIM card into the phone is just unnecessary.

  3. Tom,

    Please clarify. If the iPhone will be sold “brick-locked” requiring in-home activation, when will they run a credit check before selling you the phone? I don’t believe either Apple or AT&T will let un-activated phones out of the store (meaning in-store activation). You also seem to contradict yourself. If a credit check is required before selling you the phone, how do you suppose they’re going to do that at the POS (Apple stores, specifically)? The answer is that the phone activation (and credit check) will all be done on-site/in-store, not at home or online after the fact. Yes, people will need to register their iTunes account with their iPhone, but that’s quite different from phone activation.

    I can just see it now: A new iPhone buyer getting home, firing up his computer to activate online, then then getting a message: “Sorry, you have bad credit. Please return your iPhone to the store immediately.” Right.

    -Hark

  4. Hark,

    the exact mechanism hasn’t been communicated yet – or not to my contact anyway.

    Having said that the bit about the phone being brick-locked on sale and the credit check (whatever order they occur in) are both definite according to my source.

  5. hark, you’ll still do all the credit check etc online, and the contract, but when you get home (if this is the model) you then have to hook up the iNewton to your PC or Mac, take it online and register the IMEI, x-ref this with a contract number, and then have the software unlocked by Apple. A nice way for Apple to get the volume numbers asap, and to see if any ‘dodgy’ phones get unlocked.

    Plus it associates EVERY iNewton with an iTunes account. That’s just sneakily brilliant.

  6. Hark,

    you’ll still do all the credit check etc online, and the contract, but when you get home (if this is the model) you then have to hook up the iNewton to your PC or Mac, take it online and register the IMEI, x-ref this with a contract number, and then have the software unlocked by Apple. A nice way for Apple to get the volume numbers asap, and to see if any ‘dodgy’ phones get unlocked.

    Plus it associates EVERY iNewton with an iTunes account. That’s just sneakily brilliant.

    Sam,

    On the Nokia N95, I piad £90 for mine with 18 months on Orange (and recieved a £100 voucher for handing back an old GSM phone I had kicking around), plus a service plan of £15 a month. That works out at a nice £260 for eighteen months.

  7. Ewan,

    That still sounds way to complicated and bound to produce thousands of support calls. I see two different process:

    1. iPhone Activation and Contract: All happening in-store with AT&T employees (or cross trained Apple employees) and AT&T computer systems. You’ll be able to walk out of the store with a functioning cell-phone, but the internet stuff might have to wait until:

    2. iPhone Registration at home: Registering the iPhone with iTunes and unlocking the rest of the functionality of the iPhone. Very different from actual phone activation.

    -Hark

  8. I can’t talk to being over hyped, I bought Newton the first day they were available on east coast, while living on the west coast. And paid top dollar. I still have it, still like it.

  9. Not completely desirable…with just 2.5G on ATT you will be heavily dependent on WI-FI. Which I can do on my current PDA for $ 400 less.

    Also, ATT hotspot availability is spotty in US compared to T-Mobile (though it partners with Boingo) and you would pay for that additional each month or per day.

    On my current PDA, when I cannot get a free hotspot I use the modem feature – not a great speed but I can at least download and send mail – included in my data plan. Not available on iPhone.

    With the locked SIM when you leave the US you will pay AT&T $ 2.99 a minute in India and $ 3.49 in Romania. More reasonable in UK, Germany etc at 99c a minute (if you consider that reasonable) . Plus $ 5 a month for the intl roaming privilege. Plus taxes.

    I have other questions around GPS, camera, VoIP etc

    So Apple may be bringing out a beauty but our telecom networks are not there yet…and the premium price expectations of both ATT and Apple make it what David Pogue of NY Times calls “one heck of a status symbol”

  10. Credit check – is this done at the apple store? Do they sell the phone, then you go home THEN find out it you fail the check? (ok, i have bad credit)

  11. Mike,
    It’s optional. They’ll tell you all about it at time of sale. If you akip the credit check, take the iphone home and do it via itunes, you might have to return to an AT&T store to leave a deposit if your credit doesn’t check out. If they do it in-store, they’ll give you a credit check code to use during at-home activation. If you decide to return the iphone after opening it if you don’t want to leave a deposit, they’ll charge you a 10% restocking fee.

    handy iphone locator: http://wheresiphone.com

  12. Whats the big Deal people….

    #1. You can buy the phone either in the store or online or at an Apple Store. YOU DO NOT HAVE TO HAVE A CONTRACT TO BUY IT OR A CREDIT CHECK.

    BUT To get the service you have to a credit check. You can do that a couple of different ways. Either in the Store or online Through your Itunes. Don’t make it sound like its hard. Millions of people already use Itunes for their ipods. All you have to do is hook it up the same way BADA BING….You can do a credit check right there if you want to and begin loading stuff on it just like you do your IPOD.

    I AM GOING TO A STORE BUYING MY PHONE AND HEADING HOME…FORGE THE HASSLE. Apple has done this right.

    LASTLY, JUST GO TO A STORE AND HOLD ONE. ITS LIKE A NEW PUPPY….YOU WONT BE ABLE TO PUT IT DOWN…

  13. The NYT article is just poorly worded. The SIM card does come out and is replacable… but the phone is still locked to AT&T.

    I put the iPhone SIM into my BB Curve, and it worked just fine.

  14. Disaster in the making? I bought the iPhone Friday (Fun experience).
    I am writing this Sunday on DAY THREE of my iTunes ACTIVATION.

    I have been on the phone with one Apple Care person after a 30+ minute wait. They asked me to reboot, restart iTunes and then gave up! Passed me back into the queue (to see if th next person could handle it?)

    Friday and Saturday I spent talking with just a few representatives. I actually was busy doing some of the things I had planned for my weekend. By Sat evening AppleCare had closed 8pm(Hello Phone support does not really close right? Wrong.) I needed to reset the activation which had hung. This is what I am trying to do for my Sunday.

    If I cannot have the phone activated by Noon, I’ll return the ’emergency only puppy’

  15. Its Noon! I spent the last four hours trying to get activated. After getting disconnected 2.5 hours into a reasonable useful call, I had given them the call back number and about 20 minutes after the disconnect THEY CALLED me BACK.
    Now what they told me was that they will call me back again. In the meantime my old cell phone has been popped off the network. Elaped time since ‘iPhone activation’ began (11pm Friday to Noon Sunday is 37 hours); Ten hours my time on phone with support peopleat this time, Not active, no old cell phone, awaiting a call that I believe will come. It is past my noon deadline but I hope they can sort this soon.
    There are only about 1,300 complaints out of 99,000 members of MacRumors.com… Still Not Activated

  16. Hark, the error that I pointed out is in the above post on this site, I’m not sure if there is the same error in the New York Times article but their graphic of the iPhone correctly shows that there is a sim slot.

  17. Let me tell you what I have had this phone now for almost a month and I cannot get over how much I love this phone. I feel like a celebrity anytime I pull it out. Everyone is like “Hey, is that one of those cool iphones?” I say “yes”. They say “Does it really work like they say it does?” I say “absolutely Want to see?”
    Let me tell you what. I will never own another phone as long as apple is in the phone business. They have done it right.
    Ben

  18. Tom,
    Is it true the rumors that there are no plans to bring the iphone to Ireland. I have heard that 3 have passed up the opportunity

  19. when i first got my hands on my iphone it was apart in days modded chipped etc. and broke…. :(, although mods can be added to the piece of hardware “bigger hhd” and software such as a programme as simple as paint keep your eyes open for mods and upgrades because the iphone is pretty much a handheld mac, also does any one have any information of the cyrsis in romanina all i know was that the waves been sent out via sattile were far to storng and put people at extreme risk

  20. listen to yourselves for godsakes! give the phone a damn chance. its way ahead of any other phone technically. That alone justifies any percieved rip-off with the contract. Apple are not perfect….nothing is….but they are more perfect than any other mobile phone manufacturer. Such as Nokia(laughs). They release about a million phones each week with the same out-dated interface. And my da has an N95,it crashes alot and the wifi system is awful……..nuf said!

  21. this thread shows how full of shit some people are and how they jump at every little piece of junk published to create a disaster scenario.

    TO HELL WITH YE BEGRUDGERS!!!!!!!!

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