iPhone 4ever? Maybe not… The iPhone 4 Launch

Posted: June 29, 2010 in Apple, first impressions, iPhone, iPhone 4
Tags: , ,

If you’ve read anything from this blog before, you’d know I was a pretty dedicated Apple fan, so keep that in mind as I discuss the embarassing debacle now known as the iPhone 4 launch. I’m not sure exactly who to blame or what the core problems are, but this 4th release of the iPhone was by far the worst and most poorly executed one that I’ve been a part of. And yes, I’ve participated in all four. It’s difficult to come up with viable excuses when the companies in questions are loaded with cash and filled with experience doing these releases yet somehow came across as unprepared amateurs; you’d think this was the first time they’d done this.

It all started with the Pre-order mess. A date but no specific time was announced for the start of pre-orders. Now “normally” one would think that this iss not a big deal, it’s just a pre-order. But by this time, with over 80 million iPhones sold, and the presumptive release tagline “This changes everything again,” you’d think Apple and/or AT&T would have an inkling that there just might be some significant interest and pent up demand for this release.

So what happened? Ordering began around 1am PST that night if I didn’t hear wrong. I woke up at 2am and started trying, but was never able to get through AT&T’s servers when they would try to confirm my status. It would typically get to a point when they were waiting for information from AT&T and then it would just time out or crash. Apple’s site was eventually crashing as well. I read that some people were having luck going directly to AT&T but that didn’t work for me either. So I went back to bed and tried again in the morning. And again. And again. All day it was the same, whether through Apple or AT&T it was just a flat out mess and eventually AT&T just said (on the phone, earlier they were just automatically hanging up on me) that their servers had crashed. I finally called the local Apple store and was told some people were having luck using the new Apple Store iPhone app. So I tried that, and lo and behold I was somehow given a “reservation” to pick a phone up on release day. Now what I really wanted was a true pre-order shipped to my home, but clearly that was not going to happen. I tried numerous times throughout the day, to no avail. By the time I made it home from work, the release date pre-orders had already ended and ship dates had been pushed out a week. Not much else to say here. Whether it was poor planning or poor execution, there’s just no excuse for such incompetence from these companies. Eventually it was announced that over 600,000 pre-orders had been placed. Impressive, but really not that big a number in the relative scheme of things. For comparison, 1.2 million copies of the first World of Warcraft expansion were sold on opening day – which also means that that many people (or more) were hitting the WoW servers that day. Do you seriously want to tell me that AT&T/Apple’s resources are less than Blizzard’s? Here’s a clue AT&T: spend some cash and upgrade your server capacity!

Next came the great AT&T price upgrade extravaganza. As a baseline, the iPhone 4 was being advertised with subsidized pricing (2-year contract) of $199/$299 for the 16/32GB models, which equates to a $400 total discount off the full retail price. This pricing was for any new customer or any old one who “qualified” for an upgrade. To be nice, they even pushed up the contract dates for some people, so that anyone who would expire in 2010 also qualified (essentially bumping qualification dates up to 6 months earlier). On top of this, they released a flyer and verbage on their website that for “previous iPhone users that didn’t qualify for the best pricing” a special “early upgrade” price would be offered with a $200 discount at $399/$499 with a reset 2-year contract renewal. This is exactly the system they used last year, and I think for the most part people were happy and satisfied with it. Sounds all good so far, right? Turns out that certain select customers (namely me) simply did not qualify through AT&T for either of these discount/upgrades. I called multiple times and mentioned the flyer, and even went to the store to confirm. Everyone had a different story. Supposedly “high spenders” had improved upgrade dates, though I was never able to confirm if this was true or not. Some people who bought the 3GS the same time I did were being offered *full* upgrade pricing, and others the early upgrade pricing. At the store I was told that the “early upgrade” price could only be used once every 2 years. Essentially I decided it was all arbitrary and completely at AT&T’s whim. What bothered me was the inconsistency and lack of definition. I can live with AT&T wanting to reward its highest paying customers, but they should define exactly what that means so that I can decide if it’s worth it for me to put myself into that category by spending more.

In any event, I ultimately decided to buck the system and simply terminate my existing contract for a $115 termination fee, and start a fresh/clean line with the full $400 discount, so essentially a $285 net discount. Some additional hassle no doubt, but this is what the actual AT&T store representative recommended to me! You can do the math yourself, but clearly this makes no sense. If they had simply offered me the “early upgrade” pricing as they did last year, they’d still have me on a new 2-year contract, and I’d only get a $200 discount. Their own stupid policy cost them extra cash up front AND created un-needed animosity. It’s a complete lose for them at the expense of a little inconvenience for me. Stupid stupid stupid.

As release day approached, word got out that pre-order shipments were being delivered early. In the past (both for the 3GS and iPad), Apple has controlled shipping so that everyone would get product on the same day. Not this time, as people started getting their phones 2 days early. Rumor has it this was deliberate to allow more people to start activating sooner and relieve the pathetic AT&T servers for the actual launch. Of course the early birds were happy, but people like myself who had put the time in to pre-order but were blocked from AT&T’s server ineptitudes were not happy campers. Not only had we been denied the comfort of home delivery, but now to add insult to injury, we were missing the day one release fun.

By the actual release date I was feeling pretty bitter and unenthused about the whole thing. I was actually thinking about the Droid X and Verizon and whether all this trouble was worth it. I woke up around 7am and debated whether to hit the lines. I checked online and apparently at my store there were over 500 people lined up since very early in the morning. I kept checking in and the word was that the line was simply not moving. I changed my plans and decided to go to work and come back later in the day. I kept checking online, and kept reading the same things: little to no line movement in a hugely long line, with conflicting reports on whether people were split into 2 lines (reservations and non). Basically it was a mess. I even heard there had been fighting in the store, not sure what that was about. I finally got in the line about 500 deep or so at around 7:30 in the evening. By this time there were no more non-reserves left and I thought the line might progress well. I was wrong. The line moved, but nowhere near quick enough and by 9 we heard talks about vouchers being given out; these vouchers would allow you to jump back in the following day. I ended up waiting until 10:30 to receive a voucher, thanks to some Apple store employees who seemed like they couldn’t stop chatting. At one point the “voucher guys” spilt up and started working one from front, one from the back. This was even more aggravating as some of the back people had only just arrived while others of us in the middle had been waiting over 2 hours. We were told explicitly that if we left that night, the *only* people buying phones the next day would be people in our line who had vouchers. I took a brief count and there were maybe 400 people max still left in line when I left, so I figured waiting until the next day was a no-brainer.

I came back after work around 4:30 and there were only a few people in front of me, maybe 15 at most. At some point I realized they had actually lied, because some of the people in line with me told me they weren’t part of the previous night’s line, but had been given vouchers for some other line in the morning. By that time I really didn’t care to belabor the argument, but the flat out lying and misinformation given out by the Apple employees was pretty disappointing. I’m sure this isn’t their fault individually, but someone in Apple management had clearly directed this strategy. At that point if phone stock had run out I was planning to make a major scene. Luckily it didn’t come to that, but I still ended up waiting nearly another 2 hours before I was let into the store. By that time they had really worn out my resolve, and the cheery Apple salesman was able to con me into multiple extra purchases. On a side note I do wonder if this isn’t some sort of bizarre psychological tactic used to weaken customers so that they are more compliant to buy more. The salesman was great, but I could see now why it was taking so excruciatingly long to make the line move. Every customer was being given full-on sales pitches for Apple Care, MobileMe, accessories, etc etc as well as personal support to activate and transfer everything onto their phone. Even a normally efficient person like myself ended up taking close to 20 minutes. I could easily see other customers taking 30-45 minutes at a time and this relatively small Apple store clearly did not have the size and personnel to create a larger throughput.

All told, this launch may have been numerically successful for Apple (they are touting 1.7million sold in 3 days), but I think psychologically they may have failed for the first time. Many people were irate at the broken pre-order system, some at the mis-steps in shipping, more were disappointed in the poor efficiency of the stores and line-ups (I’ve read a variety of issues with AT&T and Best Buy stores as well), and all of that is now topped off with a possible faulty antenna design (more on that in a future post). How do you get this far along in the process and come out looking this unprofessional?

I think it’s become clear that Apple is fast outgrowing their singular (no pun intended) tie to AT&T; the exclusivity is becoming a burden for everyone involved. AT&T simply can’t handle the volume of customers, as well as the bandwidth requirements, but the demand continues to grow. Splitting off to Verizon and T-Mobile and giving customers some additional choices is only going to help everyone. Let’s hope it happens soon.


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