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Subscribe to Technology UpdatesApple Sells Half a Million iPhones
July 02, 2007 03:28 PM
by
findingDulcinea Staff
Following one of the technology world's largest ever public relations campaigns, the iPhone's tremendous first-weekend success has far-reaching implications for the future of the cell phone industry.
30 Second Summary
It has been called the "God Phone" and the "Jesus Phone," but after selling 525,000 iPhones in the first weekend of its release, most are just calling it a success.
Apple's entry into the wireless industry has received favorable reviews from most major technology pundits, with many agreeing that the iPhone's innovative design, interface, and applications make up for its problems.
But perhaps just as intriguing as the gadget itself was the phenomenal amount of attention and fanfare created during the run-up to its release. Technophiles the country over camped outside of Apple stores for days before the phone's June 29 release. People sold their spots in line, stood in line to raise money for charities, and auctioned off their newly purchased iPhones for as much as twice the retail price.
Now the question is what affect the iPhone will have on the cell phone industry at large. Despite being a boon for AT&T, with whom Apple has an exclusive service agreement, most analysts agree that the iPhone will have only a small negative impact on the bottom lines of cell phone giants like Nokia.
Many believe that the iPhone will influence both the design and functions offered in future cell phones, pushing companies to better combine the utility of smart phones like the BlackBerry with Apple's sleek design.
Apple's entry into the wireless industry has received favorable reviews from most major technology pundits, with many agreeing that the iPhone's innovative design, interface, and applications make up for its problems.
But perhaps just as intriguing as the gadget itself was the phenomenal amount of attention and fanfare created during the run-up to its release. Technophiles the country over camped outside of Apple stores for days before the phone's June 29 release. People sold their spots in line, stood in line to raise money for charities, and auctioned off their newly purchased iPhones for as much as twice the retail price.
Now the question is what affect the iPhone will have on the cell phone industry at large. Despite being a boon for AT&T, with whom Apple has an exclusive service agreement, most analysts agree that the iPhone will have only a small negative impact on the bottom lines of cell phone giants like Nokia.
Many believe that the iPhone will influence both the design and functions offered in future cell phones, pushing companies to better combine the utility of smart phones like the BlackBerry with Apple's sleek design.
Headline
Consumers bought about 525,000 of Apple's new phones over the weekend, but the glut of new account activations caused network problems for AT&T, preventing a "small percentage" of customers from activating their new phones, AT&T spokesman Mark Siegel told the Los Angeles Times.
Source: Los Angeles Times
Need to Know
PC World's Michael S. Lasky caters to those consumers who don't want to buy an iPhone by providing "a sampling of some of the best ways to dress up your current cell phone and avoid iPhone envy." The list includes music players, photo software, and Google Maps with GPS capabilities. Best of all, "some of our favorite phone enhancements are free, others come with a nominal price tag of $30 or less."
Source: PC World
Apple's exclusive deal with AT&T means that iPhone buyers who don't already have the company as their provider will have to switch. Because getting out of a cell phone contract can be frustrating and expensive, Consumerist.com's Ben Popken offers six tips on how to skirt cellular obligations. For example, "check the fine print on your latest bill. Any fee increase could nullify your obligation. Or, accuse your mobile carrier of poor service. Send complaints to the PUC and the Better Business Bureau."
Source: National Public Radio's Marketplace
The technology blog Engadget runs the numbers on AT&T's numerous service plans, comparing them with plans for comparable smart phones. The post concludes that "those worried that your iPhone will cost you a lot more in service fees than you'd pay otherwise, worry not. You're (obviously) going to pay more for the device itself, but the iPhone plans are totally fair, based on AT&T's current pricing scheme."
Source: Engadget
Consumer Reports has created an interactive guide to all of the iPhone's standard features.
Source: Consumer Reports
CNET offers a comprehensive list of all the software applications available to the iPhone, including descriptions and reviews.
Source: CNET
Background
The frenzy surrounding the iPhone's official release on the evening of June 29, 2007 spawned its own black market, as people all over the country posted classified ads on Craigslist.org offering to camp out in lines for days at a time in exchange for fees ranging from $125 to more than $1,000. Matt Grimmer even took the opportunity to start his own business, Over Here, Jerks Inc., charging customers to create diversions so unpleasant that those at the front of the iPhone lines would be forced to give up their spots. Grimmer's clientele, presumably iPhone customers near the back of store lines, hope that the abandoned spaces will give them a better shot at getting a phone before they're out of stock. Grimmer says he's got two clients.
Source: Washington Post (may require free registration)
David Clayman has made waiting in line for an iPhone a charitable undertaking. Clayman plans to auction off his newly purchased phone on eBay, and then donate any profits he makes to the Taproot Foundation, a company that provides design and marketing services to nonprofit organizations. Johnny Vulkan has done something similar, using the media attention to raise money for the AIDS charity "Keep a Child Alive."
Source: CNET
Clayman kept a blog of his experiences called iPhone Adventure.
Source: iPhone Adventure
Raven Zachary, the first person in line at Apple's flagship store in Manhattan, also kept a blog of his adventures in waiting.
Source: First in Line
Reviews
CNET editors give the new phone a score of 8 out of 10, whereas site users give it only a 6.2. The editors write that the iPhone's best features are its "stunning display ... sleek design, and ... multitouch user interface." However, they also find that it "has variable call quality and lacks ... stereo Bluetooth support and 3G compatibility."
Source: CNET
Wired's Dylan Tweney calls the phone a "delight to use and play with. Is $600 too much to spend on a phone? Probably, but I haven't had this much fun with a new product since the Palm Pilot debuted, and that was about $500 too. The iPhone's not perfect, but it is amazing." Wired also gives detailed reviews of the iPhone's major features, such as the music player, Web browser, camera, and touchscreen.
Source: Wired
PC World's editors give a similar review, writing that "the revolutionary multi-touch navigation system really is intuitive and fun ... [and] its browser, while not as versatile as the one on your notebook, is still impressive." However, the editors also note that "there are disappointments, too ... [like] the absence of instant messaging and office suite applications."
Source: PC World
PC World's Techblog runs through the various fears, misgivings, and expectations surrounding the iPhone in its post "49 Things I Now Know About the iPhone."
Source: PC World
Video of PC World's Eric Butterfield evaluating the iPhone's durability with a set of abusive tests.
Source: PC World
Apple's exclusive deal with AT&T Wireless for cellular service could be one of the device's major pitfalls. According to Consumer Reports' latest customer satisfaction survey, "AT&T had 'middling to low' customer satisfaction, with static and busy circuits cited as widespread problems (as they've been in our previous surveys)."
Source: Consumer Reports
David Pogue writes in the International Herald Tribune that "much of the hype and some of the criticisms are justified. The iPhone is revolutionay; it's flawed ... it does things no phone has ever done; it lacks features found even on the most basic phones. ... But even in version 1.0, the iPhone is still the most sophisticated, outlook-changing piece of electronics to come along in years."
Source: The International Herald Tribune
Tim Wu from Slate is less impressed with the iPhone, saying that is "not a product that will turn any industry inside out. Seen as a phone, the iPhone is striking. Seen as a small computer, it's limited, and compromised by the existing business models of the wireless industry."
Source: Slate
Reactions
The share price of Apple stock increased approximately 45 percent thanks in large part to the iPhone hype. However, it has proven harder to assess what Apple's stock will do after the mania dies down. Kevin Hunt, an analyst at Thomas Weisel Partners, explains that “trying to predict Apple’s near-term stock price movement is akin to the proverbial ‘crapshoot.’”
Source: The Wall Street Journal (may require subscription)
Nokia CFO Rick Simonson says that Apple's new phone could increase phone costs in the United States, as American consumers begin to look for the media-savvy features of higher-end smart phones. Simonson says that this would actually help his company, whose line of phones has become increasingly sophisticated and reliant on expensive media and network connections.
Source: The Macintosh News Network
Apple CEO Steve Jobs and AT&T CEO Randall Stephenson talked to the Wall Street Journal about critics' claims that the phone company's network, called EDGE, makes for slow Web surfing on the iPhone. Conceding that Web surfing speeds are slower than he would have liked, Jobs said that EDGE "is great for mail, and works well for maps and a whole bunch of other stuff. Where you wish you had faster speed is … on a Web browser."
Source: The Wall Street Journal
According to the Dallas Morning News, even people who aren't buying iPhones should thank Apple for how it has "forced the entire wireless industry to confront customer dissatisfaction and plot product improvement." Despite the fact that "many phones actually do far more than the iPhone ... they do most of this stuff terribly."
Source: The Dallas Morning News
Despite the iPhone's seeming popularity, there are a number of phone companies turning out cheaper phones with the hope that consumers won't be willing to pay $499-$599. PC World details five comparable phones, comparing each phone's features to Apple's newest gadget.
Source: PC World
Photo slideshow of some of the iPhone's leading competitors.
Source: The Washington Post
Opinions
Slate's media criticism column, Press Box, sorts through the media iPhone media frenzy. After rounding up and analyzing the coverage of all the major media outlets, Jack Shafer writes that the "press corps' romance with all things Apple has taken a coquettish turn ... [in] their stories they first scorn the universal hype over the iPhone, then they multiply it by sending a tempered message of love to their favorite new piece of gear." Shafer also points out a potential conflict of interest for New York Times iPhone reviewers David Pogue and Ed Baig, who both have upcoming iPhone books that "will succeed only if the iPhone succeeds."
Source: Slate
In his opinion piece "The iPhone As Crowning Achievement, Um, Hel-lo?" Washington Post writer Paul Farhi points to the larger cultural implications of the iPhone's hype: "The iPhone is just the latest iCon in our Golden Age of Techno-Hype ... The persistent techno-hype of this era, however, masks a simple observation: We don't live in particularly inventive or transformative times. This has been an age of scientific refinement, not revolution."
Source: The Washington Post
CNET's Tom Krazit writes that having to cover all the iPhone hype leading up to its release was probably a lot like covering the Super Bowl, producing "some of the silliest news stories of the year, as thousands of journalists exhaust every possible angle ... You think you're sick of the damn iPhone? Believe me, you have no idea."
Source: CNET
Related Topics
The iPhone has already spawned numerous counterfeits all over the world. These technological forgeries look more like an iPod than an iPhone, and run buyers about $150. It's not hard to spot the fakes; they come complete with a poorly rendered interpretation of Apple's logo: Apple's apple has only one leaf.
Source: Engadget
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