I’m dismayed about the lack of reports about the problems with the iPhone 3G launch. Granted, it seems that any anti-apple or anti-iPhone stories are banned from most of the main media outlets, but there are fundamental problems with how Apple and O2 have handled the iPhone 3G launch.
I am an existing, very happy iPhone customer, having bought one on the afternoon the original was launched last November. It is truly a fantastic device (calling it a ‘phone’ does not really do justice to it, but it is not really a ’smartphone’ either - despite being branded as one). When the 3G model was announced, I put my name down for further information, but was not too impressed with the features - I was waiting to see what O2 would offer existing customers.
The truth is that all existing customers of O2 get is the ability to end their 18 month tie-in to start a new 18-month contract. The cost of the phone is the same for new and upgrading customers.
Based on this, I decided it was not worth upgrading. I was perfectly happy with my iPhone, and while 3G is nice, I’m happy to wait for the few websites I do visit on the phone to download over EDGE. 16 gigabytes of storage would be nice, but I’m reasonably frugal with what I put on my iPhone anyway - I’ve yet to fill it even with 341 songs, 831 photos and 18 videos (two of the videos being over 30 mins long).
Where Apple and O2 have really messed up is that once again they have underestimated demand. O2 stores have been given a small amount of the stock, and their online store is still not selling them after it crashed following the first hour of sales. Existing customers can only upgrade through O2, while Apple stores have the greater amount of stock.
The problem is that as you can only upgrade through O2 stores, you are forced down the route with the lower availability. This leads to O2 having to serve both new and existing customers. Once the stock is gone for new customers, then customers are redirected to the Apple shop.
This leads to the second biggest problem: the apple shop does not have the capacity to handle the amount of new customers with the in-store activation policy.
I visited there last night in order to make an enquiry about purchasing a new iMac, and all the advisors were busy activating iPhones and couldn’t help me. From a business perspective, what is more important to Apple - a £89 sale, or a £1,200 sale?
I appreciate that Apple and O2 want to cut down on the black market for iPhones, but I’m sure their advisors and managers would rather be spending their time serving customers as opposed to waiting for the O2 website to perform credit checks.
The original iPhone launch was incredibly smooth, mainly due to the fact that customers simply purchased their phone and activated at home. Granted, there were some people who encountered a problem activating on launch night, but the majority of customers were able to activate on the night, and within a couple of days those who couldn’t activate were sorted.
Unfortunately for Apple and O2, those people who were able to order a 3G iPhone on the internet have already put them up for sale on eBay, with prices currently around the £400 mark. While the in-store activation policy might have ensured more customers get tied into their contracts, those who always intended to put the phones on eBay have already done it, so has the in-store activation worked? ‘Honest’ customers (those who are activating in-store) were always intending to activate their phones, those who didn’t want to activate are still buying on the black market, and those Apple customers who have no real interest in buying the iPhone are being neglected in store.
Apple stores should go back to the core of the business, being computer and entertainment stores, and leave the mobile phone contract activations to the mobile phone stores.
