New iPhone goes on sale

New York, June 20: The new iPhone went on sale Friday morning, greeted by much smaller lines and less hoopla than previous models.

A few hundred people were in line just before the 07:00 local time opening of Apple Inc’s flagship store on Manhattan’s Fifth Avenue, a fraction of the people who lined up around the block for last year’s launch.

That launch turned into a debacle as Apple’s servers failed to cope with the load of new customers trying to activate their phones. People who already had iPhones were trying to install a software update on the same day, adding to the pressure.

This year, Apple and AT&T Inc, the phone’s US carrier, defused the drama by taking pre-orders for the new phone online. That means fewer prospective buyers had a reason to stand in line, in theory speeding up the activation process.

Apple also released its software update for previous customers two days early. There were only scattered reports of problems with that upgrade.

While activation seems to have proceeded more smoothly this year, posts on blogs, Twitter and Apple’s own support forums indicated it may take as long as two days for some iPhones to be operational.

The devices must be plugged into a computer and activated before users can call, send text messages or surf the web using their cellular data plan. Apple and AT&T servers are both involved in the activation process.

Some people reported receiving a message warning activation will take up to 48 hours due to high volume.

Apple spokesperson Steve Dowling declined to provide details on the situation. AT&T spokesman Mark Siegel declined to comment.

Faster processor, upgraded camera

The new model is called the 3G S. AT&T said it had taken pre-orders for “hundreds of thousands” of the phones. Apple sold one million units of the older model, the 3G, in the first three days last year.

For new customers signing a two-year contract with AT&T, the 3G S costs $199 or $299 depending on the memory capacity. Compared to the 3G, it has a faster processor and an upgraded camera.

Owners of the previous model, the iPhone 3G, will have to pay more than that. Most of them are not eligible for the new-customer pricing because AT&T subsidises the cost of the phone and requires customers to “pay off” the subsidy through their monthly service fees before it will subsidise a new phone.

In line at the Fifth Avenue store, Brandon Dennie, 27, was not put off by the prospect of having to pay the unsubsidised price of $599 for the new phone. He’s had a 3G for only six months, so he didn’t qualify for the lowest price.

He’s creating his own subsidy by selling his old phone for $200 to a colleague, and he has an Apple gift card.

“I want the video option and the speed,” Dennie said.

—Agencies