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June 26, 2010

To many observers now, it's pretty clear that Apple is struggling to deliver its shiny new iPhone 4 on time to everybody that wants it. It's launch Thursday was a real success, however.

From Tokyo Japan, to San Francisco, CA., some Apple stores started selling out the iPhone 4 just hours after it went on sale June 24. Some would-be buyers walked away very disappointed. Overall, tensions grew at Apple stores that hadn't run out.

So the question is: Can Apple really deliver the iPhone 4 and on time to the many people that want it so badly?

Well, in Aventura, Fla., Loren and Veronica McHenry held out hope, even after miscommunications landed them at the back of the line. They were told Wednesday that no one was allowed on mall property overnight, but returned the next day to learn that 120 people had camped out at a nearby parking lot.

As the crowd pushed closer to the store, Apple employees started yelling that the fire marshal was going to shut the store down unless people moved back. The McHenrys were shoved out of place and behind a large group of people who refused to budge from their spots. McHenry, 42, said two men in front of them threatened to fight each other rather than move, and guards sent a handful of people home for cutting in line.

After no less than eleven hours, the couple finally had their iPhones 4s, but Veronica McHenry vowed to pre-order to avoid such a scene in the future. Oh- when's the iPhone 5 coming? :-)

At other Apple stores, even people who pre-ordered the smartphone still waited in line for eight hours or more. And many Apple fans simply ran out of patience, even though they stayed in line waiting for their phones.

Apple is having a tough time getting enough of the new custom parts for the iPhone 4, such as its new higher-resolution screen. Apple has said the white iPhone it plans to produce has been more challenging than expected, and won't be available until late July or even early August. Only black models went on sale on June 24.

It may also be the case that Apple correctly anticipated opening-day demand but sent too many phones to some of its 200-plus U.S. stores and not enough to others, said Kaufman Brothers' analyst Shaw Wu.

Despite heightened concerns about a very short supply of the iPhone 4, the mood at Apple stores as the phone went on sale in Japan, Germany, France, the U.K. and the U.S. were familiar ones. As was the case with last year's iPhone 3GS launch, the eager throngs seemed unfazed by ongoing economic uncertainty.

Apple employees continued the company's old tradition of providing bottled water, coffee, bagels and even cupcakes to people in line. In downtown Chicago, the store handed out black umbrellas with white Apple logos for customers who waited overnight through severe thunderstorms and even defied tornado sirens that wailed around the city.

Outside of New York's Fifth Avenue store, Jasmine Cordova said that given the hype and advertisements surrounding the launch of the iPhone 4, "they should make sure to stock enough units on hand."

It seems even Apple was surprised by the number of people who wanted to snap up the fourth version of the smartphone. More than 600,000 had rushed to pre-order it on the first day they were available, prompting Apple and its exclusive wireless partner in the U.S., AT&T, to stop taking orders for pickup or shipment by Thursday's launch.

To make matters worse, on Apple's corporate website, new orders weren't promised for delivery until July 14 at the very earliest.

Those who didn't pre-order in advance lined up outside Apple stores in the hopes of snagging one on a first-come, first-served basis. But that was a big risk, since many went back home empty handed.

In Tokyo's popular Ginza shopping district, a man dressed as a giant iPhone danced and waived his arms as he made it to the front of the line. As always, people traveled long distances to get an iPhone before their countrymen. Alex Lee, 27, flew from Dubai to join the 500-person-long line along London's popular Regent Street.

Of course, and as it's seen very often, enterprising people with a lot of time on their hands found ways to make some money out of this... Jordan Richardson, who waited outside the Chicago store since 7 a.m. Wednesday, sold his spot early Thursday for $500, then paid another customer $200 to get back in line. His profit of $300 was enough to cover the cost of the higher-capacity model. A lower-capacity version of the iPhone 4 sells for $100 less.

Apple spokeswoman Natalie Harrison said demand was off the charts, and that Apple was working hard to get phones into customers' hands as quickly as possible.

Some stores sold out completely within just a few hours. Brian Marshall, an analyst for Gleacher & Co., said certain Apple stores likely had enough iPhones to last into Friday before selling out. A new shipment could be in stores as early as Saturday, he said, but more likely won't arrive until early next week, probably not even before Wednesday, June 30th.

But make no mistake: both models of the iPhone 4 require a two-year minimum contract, however. AT&T abandoned its unlimited-use data plan and now requires people to pay $15 a month for 200 megabytes of data, or $25 for two gigabytes.

But existing AT&T wireless subscribers can still keep their $30-a-month unlimited plans if they wish to do so.

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Source: Apple.