Tight supply of iPhone 3G leaves customers waiting for hours

Posted:
in iPhone edited January 2014
Two weeks after it launched on July 11, the iPhone 3G is still hard to find in the US. Many Apple retail stores have no supplies at all, leaving buyers to track down the stores that do have remaining stock and wait in slow moving lines that stretched out for five hours.



The 3G iPhone Availability web page, run by Chris Barnes using updates from Apple's retail store availability feed, indicates that less than half of the US Apple retail stores are currently reporting units in stock. Of 188 US stores, 51% had inventories of the white 16 GB model, 44% had some 8 GB units, and only 40% had the black 16 GB version.



Apple only reports whether each store will have some units available the next day, not how many each store has or will be receiving; supplies can run out quickly, and sometimes the availability report isn't even accurate, as some stores have indicated that they had supplies when they did not. Flagship locations such as the landmark store on New York's Fifth Avenue and the Union Square San Francisco store appear to receive more stock, but also sell out quickly due to high foot traffic.



On Wednesday, only one of the three Apple retail stores in San Francisco had any units in stock by late morning; the Chestnut and Union Square stores were completely sold out, leaving hopeful customers the only option of standing in line waiting for an estimated "three to five" hours at Stonestown Galleria. AT&T's retail stores also reported being completely sold out in the City.



The line at the Apple Store in the Stonestown mall, located deep in the southwest residential corner of San Francisco and far from any tourist attractions, appeared to only be fifteen people deep at the door (below top), but the line continued outside the mall on the sidewalk (below bottom), with Apple store employees shuttling in waiting users a half dozen at a time as space allowed inside.











One enterprising young man standing toward the front of the line was trying to sell his spot for $400, but said if he'd known from the start that he'd have to wait five hours to get there, he wouldn't have waited. A food court fortune cookie suggested that the wait would be worth it: "Your labors will bear sweet fruit."







Delayed by activation issues



While supplies of the iPhone 3G are constrained worldwide due to strong demand, The primary reason for the long lines has been the added requirement for in-store activation. Unlike the original iPhone, the new model must be set up with a contract in the store. Last year, some users ran into problems with Apple's novel home activation process through iTunes, but the process was quite smooth for most buyers. Those who had problems didn't delay those who didn't. This year, problematic activations are holding up everyone.



The downside to home activation with the original iPhone was that it allowed users to buy iPhones and unlock them for use with other carriers, either T-Mobile in the US or any other GSM provider worldwide. Apple received a mobile service revenue share from iPhone sales, but only those activated with AT&T or its official partners in Europe. Pundits complained that Apple could potentially eventually "lose" a billion dollars in mobile service revenue from unlocked phones, but the company's own executives downplayed the problem, noting that they only viewed unlocked phones as evidence of strong demand overseas.



The iPhone 3G requirement for in store activation removes the unlocking issue, but the real reason for binding a mobile contract sale to the phone purchase is that Apple is now selling the iPhone with a traditional mobile provider subsidy, which allows the company to advertise a much lower price, either $199 for the 8 GB version or $299 for the 16 GB model. The end result is that the few users who run into activation problems delay everyone else buying the iPhone 3G.



Some customers fail credit checks or arrive without identification or their social security number or lacking a credit card in their name. Some existing AT&T users have a phone contract on a business account or family plan, which can pose a problem if they are not the primary account holder. Others have a discount mobile plan related to their employer, which must be removed prior to signing up for an iPhone account.



AT&T customers who have already received a subsidized price for new phone within the last several months may have to pay a higher price to migrate over the iPhone 3G, although existing iPhone users do not face any penalty.



Mobile launch crisis



However, the biggest problems related to new iPhone 3G activations have plagued users from other carriers hoping to move their existing number to a new AT&T plan. Mobile providers in the US are supposed to offer number portability on demand, but many customers don't realize they'll need their existing mobile account number, resulting in a prolonged, in-store telephone transaction in order to set up their new plan.



The activation situation isn't any different for other mobile phones, but the iPhone 3G launch has been particularly plagued with delays because there is far higher demand for it compared other phones, and most competing units are available from a wider selection of stores. Further, the simpler initial launch of the first iPhone last year makes the 3G model's introduction appear to be a catastrophe in comparison.



In Europe, the iPhone 3G launch has been at least as clumsy if not more so, as sales are being handled primarily by mobile partners rather than in Apple's own stores. In Switzerland, Swisscom representatives at multiple stores were refusing to sell iPhones to users who had existing contracts with the company, telling them to return in a few months when their existing contract was up. That's not the official policy of the provider, but rather an issue with sales training.



In the US, Apple has exerted more control over the launch and the training of its salespeople, down to the subtle details. While European sales agents ripped open iPhone 3G boxes to set up the units during activation, Apple Store employees followed a careful transaction script that involved handing the new box to the customer to open. Stress related to the activation complications and high demand have taken a toll on Apple's retail representatives, resulting in at least two employees being fired for walking off the job at San Francisco's downtown store.



Undaunted iPhone 3G interest



The activation complications have resulted in an average wait of 15 minutes or more per person. Even with five retail employees servicing new iPhone 3G buyers in the store non-stop, each store is limited to setting around 20 units per hour in ideal conditions. The extremely long waits and complicated transactions associated with the iPhone 3G haven't scared away customers however.



In San Francisco, around 40 people were waiting in line Wednesday afternoon at Stonestown Mall. The line included a wide spectrum of buyers, from businessmen in suits talking about corporate support for the iPhone to college students upgrading from the iPod touch. Some were current iPhone users, but most of those waiting were new to the iPhone. Apple employees frequently serviced the line, asking for information from current AT&T customers to ensure that they were eligible for the "incentive" price advertised for the iPhone 3G, and reminding users of what they'd need to complete their contract activation before making it to the front of the line.



New supply shipments should help accommodate demand in the coming weeks. Some of those waiting in line suggested ordering the iPhone 3G from AT&T online, avoiding the slow moving lines at retail stores. Online sales don't require standing around in line for hours, but do involve a roughly five day wait. That's too long of a delay to those currently waiting for hours in line.



After a half hour long wait, the iPhone 3G line progressed by about ten people, while another dozen new people joined the end of the queue. By 6 PM, the line was closed to new customers in order to get those currently waiting set up before the store closed at 9 PM. Those who only had to wait three hours were lucky; everyone in line prior to that had waited at least five hours to receive their phone.



A few interested buyers left the line after being informed by Apple employees that their existing plan had complications they'd need to resolve with their employer before making the purchase. Others were no doubt turned away by the prospect of spending most of the afternoon waiting in line. The iPhone 3G line even left a number of store visitors confused about whether they could enter the store to make other purchases.
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Comments

  • Reply 1 of 44
    justflybobjustflybob Posts: 1,337member
    Why is this still considered "news"?
  • Reply 2 of 44
    The whole thing is B.S.



    Why would ANYONE in the US buy an iPhone 3G to unlock and use on TMobile... they don't even have a 3G network! What is AT&T afraid of? The international market doesn't need to buy unlocked phones on eBay now, as they have sales in their own countries.



    If AT&T really needs to tie each sale to a contract, then have the purchase done online.. the credit check, the purchase, the contract signing. Then you get a confirmation # email you bring to Apple to walk in, buy the iPhone, take home, and activate.



    Is the benefit of the current method really worth pissing off the million legal, valid customers? It's like DRM.. bringing the hammer down on everyone because of perceived loss of potential extra revenue.
  • Reply 3 of 44
    shanmugamshanmugam Posts: 1,200member
    the whole thing is weird ...



    what will happen with next version of iPhone, everyone needs to wait 5 hours? huh thats bad ...
  • Reply 4 of 44
    Quote:
    Originally Posted by Thataboy View Post


    The whole thing is B.S.



    Why would ANYONE in the US buy an iPhone 3G to unlock and use on TMobile... they don't even have a 3G network! What is AT&T afraid of? The international market doesn't need to buy unlocked phones on eBay now, as they have sales in their own countries.



    If AT&T really needs to tie each sale to a contract, then have the purchase done online.. the credit check, the purchase, the contract signing. Then you get a confirmation # email you bring to Apple to walk in, buy the iPhone, take home, and activate.



    Is the benefit of the current method really worth pissing off the million legal, valid customers? It's like DRM.. bringing the hammer down on everyone because of perceived loss of potential extra revenue.



    Yeah but if they can activate at home then they won't buy any of the fancy accesories Apple and AT&T have plastered all over their walls.
  • Reply 5 of 44
    guestguest Posts: 112member
    I would expect Apple to give this kind of a checklist to those in line so they can deal with things like having their social security number. After nearly two weeks experience with those problems that's sad, bad organization.
  • Reply 6 of 44
    Quote:

    Apple recieved a mobile service revenue share ...



    Yes, I suppose it's better getting stories quickly, rather than to do any kind of proofreading.



    Remember ... "i" before "e" except after "c."





    As for my own iPhone, I will have to wait for some kind of saturation to take place in the stores. I will be dropping my existing T-Mobile contract, with more than a year left on it, by going to . This costs only 20.00, but when someone takes over my contract, I would be completely without a phone if I couldn't go straight to an Apple or AT&T store to buy the 3G. Oh well, I'll be patient.



    Another option, BTW, is .



    Anybody had experiences with either of these?
  • Reply 7 of 44
    jeffdmjeffdm Posts: 12,946member
    Quote:
    Originally Posted by Thataboy View Post


    The whole thing is B.S.



    Why would ANYONE in the US buy an iPhone 3G to unlock and use on TMobile... they don't even have a 3G network! What is AT&T afraid of? The international market doesn't need to buy unlocked phones on eBay now, as they have sales in their own countries.



    In my opinion, 3G doesn't seem to be a big deal. iPhone isn't a very swift device anyway, WiFi, Edge or 3G, it's not anywhere nearly as fast as a desktop or notebook computer. Opening a web page on 3G still feels pretty darn slow.
  • Reply 8 of 44
    jeffdmjeffdm Posts: 12,946member
    Quote:
    Originally Posted by shutterrelease View Post


    Yeah but if they can activate at home then they won't buy any of the fancy accesories Apple and AT&T have plastered all over their walls.



    I don't think that makes any sense, I need you to explain that better.



    My perspective: let's say you want to buy the thing. You're already in the store. How does activating in-store vs. at home determine whether the customer would buy accessories at the store?
  • Reply 9 of 44
    dagamer34dagamer34 Posts: 494member
    People, the iPhone store checker is useless because any shipments of iPhone 3Gs to a store are going to be immediately bought out. So your local store may actually be receiving shipments but none are left at 9pm when the store closes.



    Easiest way to find out is to either a) camp out at your local Apple store at 7am until they open or b) call around 10-10:30am when they usually receive shipments from UPS to see if they actually came in that day.
  • Reply 10 of 44
    SpamSandwichSpamSandwich Posts: 29,915member
    It's amazing that despite the ongoing screw-ups and now technical problems being reported, people are still willing to endure the pain and possible additional issues to have that bloody phone. Good news for all AAPL holders, I guess... teh Steve still has 'em all fooled.
  • Reply 11 of 44
    "Others have a discount mobile plan related to their employer, which must be removed prior to signing up for an iPhone account."



    Not exactly.



    I was told, at the Apple store Bethesda, MD that I had to order my 3G iPhone from the AT&T store. no options.



    I placed an order 7/19/2008 - I am still waiting.



    Brian
  • Reply 12 of 44
    I'm an existing AT&T customer who's had his current motorola KRZR since January of 2007. In other words my phone is 18 months old and my contract expires in 6 months.



    Dispite first logging onto the att.com/appleupgrade site, then calling customer service, then going to a store, I've been told I cannot get an iPhone at the $199 rate until October 23rd of this year.



    Reps have told me that I can upgrade to any other type of phone, no problem. But for the iPhone they cannot override the upgrade eligability. This is pretty annoying to say the least and I'm not sure why the policy is in place. As multiple sites have shown I"ll be paying more to AT&T over the life of my contract iwth the new iPhone. I figure they'd want the increase revenue ASAP.



    Also, makes me wonder how many current AT&T customers are in the same boat. I'd guess a WHOLE LOT OF THEM, since I only have 6 months left in my current contract.
  • Reply 13 of 44
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by dagamer34 View Post


    People, the iPhone store checker is useless because any shipments of iPhone 3Gs to a store are going to be immediately bought out. So your local store may actually be receiving shipments but none are left at 9pm when the store closes.



    Easiest way to find out is to either a) camp out at your local Apple store at 7am until they open or b) call around 10-10:30am when they usually receive shipments from UPS to see if they actually came in that day.



    The easiest way to find out is to check use the iPhone checker site. It's kept up to date throughout the day. You can even check it before your local 9pm time by changing your system time or by using that one site that does it all for you (I'm too lazy to locate it).





    Quote:
    Originally Posted by SpamSandwich View Post


    It's amazing that despite the ongoing screw-ups and now technical problems being reported, people are still willing to endure the pain and possible additional issues to have that bloody phone. Good news for all AAPL holders, I guess... teh Steve still has 'em all fooled.



    The first few days I can understand, but why didn't these people no just pay for it at an AT&T store and pick it up the following week when they are called. I was called yesterday for my 4th iPhone 3G which I ended up declining anyway. They said it would have to be shipped back to the warehouse, but that seems excessive when they can just sell it in the store.



    edit: Just saw this explaining this is(was) the way to go...
  • Reply 14 of 44
    schralpschralp Posts: 22member
    They could've avoided much of this angst by offering it at the higher price and giving a $200 (or whatever) rebate at activation with AT&T; this would have solved the "issues" they were concerned about and alleviated the line situation. Now as far as the server and mobileme SNAFUS, that's a different story.



    I got lucky and walked into a store a week after launch with no line and was out in 20 minutes with a newly activated phone. If that hadn't happened, who knows if they would have ever secured my business....
  • Reply 15 of 44
    Quote:
    Originally Posted by JeffDM View Post


    In my opinion, 3G doesn't seem to be a big deal. iPhone isn't a very swift device anyway, WiFi, Edge or 3G, it's not anywhere nearly as fast as a desktop or notebook computer. Opening a web page on 3G still feels pretty darn slow.



    I am one of the luckier ones and just had to wait in line for 1.5 hrs on the 12th. I have found that the 3G is much faster than EDGE buy a big difference in download larger web pages (ESPN.com). Also, in comparison to the iTouch with wifi, 3G is slower than wifi. I have done some side buy side comp. with both devices on wifi, and the iPhone is slightly faster than the iTouch.



    I use the 3G feature when I'm home, in the car and web surfing/emailing large info. (for reason to concerve battery for voice function). Other than that, I leave the edge on only and have found the service, battery life and connection to be above average-average. I can go the whole day without going past 1/4 battery life, for about 45-60min of talk and 20 minutes of web use. Buy using the 3G part time, and closing wifi and bluetooth, I feel that it extends the battery big time.
  • Reply 16 of 44
    drazztikkadrazztikka Posts: 240member
    I don't get it, why don't the apple stores hang out a sign that people need to make an appointment for buying an iphone?
  • Reply 17 of 44
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by drazztikka View Post


    I don't get it, why don't the apple stores hang out a sign that people need to make an appointment for buying an iphone?



    How would that work? They'd have to be able to assure supply of your model come appointment time.
  • Reply 18 of 44
    Ordered a black 16G and a white 16G from ATT - the white came in 24 hours (not waiting in line) - no word on the black - but ATT said 10 - 20 days - although people have been receiving more quickly than that.
  • Reply 19 of 44
    8corewhore8corewhore Posts: 833member
    That Panda Express cookie is what they give to their dish washers in lieu of a fair wage.
  • Reply 20 of 44
    0sx0sx Posts: 9member
    Quote:
    Originally Posted by schralp View Post


    They could've avoided much of this angst by offering it at the higher price and giving a $200 (or whatever) rebate at activation with AT&T;



    That would defeat the purpose of marketing the lower $199 price point and advertising it as "half the price" of the original iPhone. Even though we all know it costs more in the end, the lower intial sales price has a strong psychological attraction.



    What's surprising is even with the unbearable long waits in line and issues with the 2.0 software, Apple still can't supply iPhones fast enough. That says alot about people's desire for a good mobile phone experience.
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