A day intended to celebrate a second coming-out party for the world’s most-talked-about phone turned into a frustrating snarl of glitches and shortages for customers Friday waiting in long lines to be first to own the new iPhone 3G.
In Chicago, the top-of-the-line iPhone 3G was sold out at some AT&T stores by mid-morning.
Then another problem developed: Overwhelmed Apple servers crashed, causing activation delays of several hours across the country and ensuring the long lines would advance at a snail’s pace.
The iPhone 3G went on sale at 8 a.m. in Chicago and in 21 countries worldwide over the last 36 hours. Plus, a free software update was released to existing iPhone owners at the same time.
The demand placed on the iTunes online store, a component of the activation process, appeared to overload Apple’s servers, preventing eager customers from getting their phones working quickly.
Apple’s plan had been for customers to walk out of stores with an activated iPhone within 15 minutes, but that didn’t happen. In many cases clerks urged frustrated customers to finish the process on their home computers. But the same problem persisted there, according to accounts from across the country.
While Apple is poised to sell a lot of iPhones, Friday was not the smooth start the company had hoped for. Apple’s stock shed $4.05, or 2.3 percent, to close Friday at $172.58.
Representatives for Apple did not respond to calls or e-mails about the software problems.
Frustrations started early for customers.
Shortly before 10 a.m., an employee from the AT&T store at 57 E. Chicago Ave. bellowed out to iPhone buyers, waiting in a line about 50 yards long, that the 16 gigabyte iPhone 3G, retailing for $299, had sold out. The 8 gb model sells for $199 with a two-year contract.
“I repeat, we no longer have the 16 gigabyte iPhone,” he said, as several people then left the line and headed to the nearby Michigan Avenue Apple store. There, even after 10 a.m., the line was two blocks long.
The iPhone 3G has faster network speeds and a revised operating system that allows outside software developers to build programs. The price has been reduced as well, but monthly service fees are reportedly higher.
The new features, plus Apple’s track record with the first iPhone, led to long lines and waits on Friday.
“The demand was amazing today,” said Kevin Petersen, vice president and general manager for AT&T’s Illinois and Wisconsin markets. AT&T is the exclusive carrier for the iPhone in the U.S.
He said the activation process improved significantly by midday. “We’re still having a little bit of a problem, but about three out of every four customers are getting through without a problem. Apple is putting a lot of resources on fixing this.”
Petersen would not say how many 16 gb iPhones AT&T had on hand or how many iPhones it sold, but he acknowledged that a “handful of stores” ran out of the pricier model.
“By next weekend, we should be fine” on stock, Petersen added.
Giao Nguyen, a software developer, was waiting in line at AT&T, playing with his “old” iPhone, when the 16 gb model ran out.
Will you still wait, I asked, or come back?
“Yeah, I’ll wait. I’m fine with the other model,” he said.
Nguyen is developing financial applications for the iPhone so storage space was not a concern. One app will calculate the sales tax for a product based on your location. So if you want to buy a gadget in Chicago, his program will compare the tax to a store outside the city.
“It will help people understand the true cost of an item,” he said.
Outside Apple’s Michigan Avenue store, clerks were assuring people who had been waiting for hours that plenty of the 16 gb models were in stock and would not run out.
“But don’t quote me on that,” one clerk said when he saw I was talking notes.
Alex Webb, who was toward the middle of the line after arriving at 8 a.m., wanted the 16 gb and did some fact-finding Thursday night to make sure he’d get one. “I went to an AT&T store and they told me they had a three-hour supply. Then I came here and they said it would be no problem,” he said.
But he was nervous after hearing about the shortages. Plus, the line was hardly budging. “I will not buy the 8 gb model. I should have gotten in line last night,” Webb said.
I called that store late Friday afternoon and the clerk assured me there were still plenty of 16 gb iPhones — if I wanted to get in line.
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ebenderoff@tribune.com
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