iPhone Preorder Tsunami Swamps AT&T, Apple Sites

Another launch day for iPhone preorders, another day of blockbuster sales -- and server failures.

As with previous presale events for new editions of the popular smartphone, the opening of preorders for the new iPhone 4 on Monday proved a mixed bag for Apple (NASDAQ: AAPL) and AT&T, the company's exclusive U.S. carrier. While preorders for the iPhone 4 sold out -- to the tune of 600,000 preorders in one day, according to Apple -- server glitches and failures hampered the process for many would-be iPhone owners. AT&T (NYSE: T) also faced accusations of accidentally revealing customer information.

Despite the chaos, Apple still managed to sell out the first run of its new phones. Visitors to its online store for the iPhone now see a delivery date of July 2, a week later than the official June 24 launch.

That came in spite of both Apple and AT&T's online purchasing sites becoming overwhelmed, which made it impossible for some visitors to complete orders. Some just found the site unresponsive or frozen, unable to complete the preorder, while others were erroneously told by the site that their Apple ID account had been suspended. Employees of Apple's retail stores, meanwhile, were seen telling iPhone customers to use the Apple Store app for their phone to reserve their phone, rather than using the website.

Apple issued a statement on the problems, saying, "It was the largest number of preorders Apple has ever taken in a single day and was far higher than we anticipated, resulting in many order and approval system malfunctions. Many customers were turned away or abandoned the process in frustration."

"We apologize to everyone who encountered difficulties, and hope that they will try again or visit an Apple or carrier store once the iPhone 4 is in stock."

Additionally, only the black iPhone 4 model had been available for sale -- in 16GB and 32GB capacities, for $199 and $299, respectively -- with a two-year contract. Apple also planned to offer a white plastic model of the iPhone, but that model had not been available for sale. Apple did not respond to requests for comment on this or other issues.

AT&T Glitches, Claims of Data Leaks

AT&T didn't escape iPhone 4 launch day unscathed, either. Like Apple, its online merchant site was overwhelmed and unable to complete purchases.

The No. 2 U.S. carrier said that preorders for the iPhone 4, which is a major update to the phone over prior generations, had been ten times that of the iPhone 3GS, itself an incremental upgrade to the 3G. AT&T also said 13 million visitors came to its site to determine if they are eligible to upgrade to a new phone -- three times higher than the previous record for eligibility upgrade checks in one day.

At press time, AT&T's whole online wireless store is offline. An AT&T spokesperson confirmed the suspension of preorders to fulfill the orders already received and said it would resume taking preorders when more inventory comes in.

Additionally, one report also said that AT&T customers suffered data exposure and orders being charged to the wrong buyers.

Apple's Web store requires the phone to be shipped to the address listed in the AT&T service contract, so it has to pull customer information from AT&T's databases. But according to reports in gadget blog Gizmodo, AT&T was pulling the wrong addresses. Readers wrote in to the blog to report that while attempting to make the purchase through the Apple site, the shipping addresses being listed were not those of the customer. Others reported being charged for multiple phones when they only wanted one.

AT&T issued a statement in response to allegations of leaked or error-prone consumer data, saying that any leaks -- if indeed they took place -- would have been limited.

"We have been unable to replicate the issue, but the information displayed did not include call-detail records, Social Security numbers, or credit card information. In the meantime, we are looking into this matter." The company did not comment further.

Reaction to iPhone 4 Sales Snafus

Though they sold more than a half-million preorders for the iPhone 4, Apple and AT&T's big presale numbers shouldn't be much of an excuse for the problems suffered by customers, according to Gerry Purdy, principal analyst with MobileTrax. Apple and AT&T have been through these tidal waves three times in three years and should have been better prepared, he said.

"When product people produce something that's going to be a home run, the organization has to invest extra resource to manage for it, even if that wave of customer interest doesn't manifest, because you damage customer satisfaction otherwise," he told InternetNews.com. "They could have planned for it. There's no way with 50 million people voting on 'American Idol' in 60 minutes that they couldn't manage a 600,000 order stream. They certainly could have."

Purdy joked that he'd love to hear the staff meeting at Apple today, given CEO Steve Jobs's notorious temper. In any case, "This created a nightmare they could have avoided," Purdy said. "It teaches everybody you better prepare for it. That's one lesson taken from it. It's not something you can go back and fix but it's something you can better prepare for it the next time."

So if Apple and AT&T were crushed on preorders, what does that bode for the phone's first official day of retail availability on June 24? Previous iPhone launches have been marred by activation issues, and with the iPhone 4 so popular, this could only be worse. But Purdy doesn't think so.

"I think, after yesterday, they've got to have a plan, saying 'We better make sure this doesn't happen on activation day,'" he said.

Andy Patrizio is a senior editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.

TAGS:

mobile, iPhone, Apple, AT&T, iPhone 4G

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