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Apple Has A Bad Day

Glitches plague 3G intro

By Mark Huffman
ConsumerAffairs.com

July 11, 2008

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It was supposed to be a day of celebration but Apple's launch of the iPhone 3G quickly turned to consumer angst today as many consumers were unable to get their new gadgets to work.

Various media reports quote frustrated consumers who say they had to spend hours on the phone with Apple and AT&T trying to get their iPhones to operate properly.

Many consumers had previously waited several hours in line this morning to make sure they got one of the new generation iPhones, which Apple advertised as "twice as fast and half the cost" of last year's model. There were also technical glitches on day 1 when Apple launched its iPhone.

A spokesman for AT&T told the AP that there was a "global problem" with iTune's servers that prevented proper activation of the phones in the stores. Consumers were instructed to go home and complete the last step themselves be connecting their phones to their computers.

Perhaps complicating things for the computer maker, company technicians chose today to issue a software update for the original iPhone. Users of that model were instructed to connect with iTunes to download the software. Many reportedly were unable to do so.

Bells, whistles

The main advantage to the new model is its increased horsepower. The 3G offers high-speed connectivity, as well as a few other bells and whistles, including GPS navigation.

And then there is the price. The early adopters who rushed out last year to buy the iPhone paid $499 and $599 for the devices. The 3G starts at $199 for the 8 gigabyte model, with 16 gigabyte model available for $299.

Both the older iPhone and the new models only work on the AT&T network.

Apple announced this week that more than 500 native applications will be available on the iPhone's App Store. iPhone 2.0 software includes support for Microsoft Exchange ActiveSync.

The Apple Store will offer over 500 native applications from hundreds of companies around the world in a variety of categories including games, business, news, sports, health, reference and travel. Some applications are free, but others have to be purchased through an iTunes account.

"iPhone represents a new software platform for developers, combining the most advanced mobile operating system, sophisticated developer tools and a breakthrough way for developers to wirelessly sell and distribute their applications right onto every iPhone," said Philip Schiller, Apple's senior vice president of Worldwide Product Marketing.

"The reaction from developers has been very, very positive and we're opening the App Store with over 500 native iPhone applications available for immediate purchase and download," he said.

No contract

Earlier this month, AT&T announced that the new iPhone would be available without a contract.

But there is one very hefty string attached. In order to get the service without the contract, you have to spend an extra $400 for the iPhone.

In announcing its new policy, AT&T said the iPhones without a contract will cost $599 or $699. It didn't say when it would start its new policy, only saying it would happen "in the future," which covers a lot of territory.

AT&T says the new iPhones, which will normally cost $199 and $299 with a two-year contract, are priced higher without a contract because that's the actual cost of the phone. AT&T says it subsidized part of the cost for contract customers, getting the money back over the life of the contract.

AT&T says it's offering the no-contract option in response to customer demand. Regulators and members of Congress have also prodded cell phone companies to be more accommodating to subscribers when it comes to early termination fees.

Even though you can get an iPhone without signing an AT&T contract, you will still have to use AT&T service. The iPhone remains locked, meaning it can't be used on other networks.

Since the early termination fee for ending a contract is normally $175, it isn't immediately clear if many consumers will pay an extra $400 just to avoid a contract.

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