iPhone 4: Demand Despite Glitches, Android New No. 2

The launch of the iPhone 4 seems to have been far less problematic than delivery of the pre-orders went just last week. The lines were very long in places, but there were no reports of mass outages or trouble activating the phone.

Oppenheimer & Company analyst Yair Reiner surveyed 174 people waiting in line to make the purchase and came away with some statistics that should make Apple (NASDAQ: AAPL) CEO Steve Jobs smile.

Reiner found just 26 percent of the people he surveyed were replacing a phone out of necessity. The other 74 percent were doing it because they wanted to own the latest iPhone, and of that group, 76 percent already owned an iPhone. Those that were swapping out their old iPhone were doing so after an average of only 14.7 months, which is a lot faster than the typical 21 month replacement cycle of other smartphones.

The biggest draw was FaceTime, the video conferencing feature built into the phone that is not available on any other model. The new 5 megapixel camera was also a major consideration, since the camera in earlier iPhone models has been notoriously sub-par. Other reasons cited for upgrading were multitasking support, the new screen and better battery life.

Bad news for Research in Motion in the survey: it's no longer the backup option, it's the second backup. Last year, Oppenheimer found most respondents saw RIM as the best alternative to the iPhone. This year, RIM was leapfrogged by Android, 58 percent to 29 percent. RIM's most recent fiscal quarter came in at the low-end of projections thanks to heat from Apple and Android to begin with, and this is another bad sign.

"The finding is not particularly surprising in itself -- most industry watchers know that Android has been picking up steam -- but the sharp shift in the pecking order is nevertheless striking and suggests that the tensions between Apple and Google will continue to mount," Reiner wrote.

Ready to Buy an iPad as Next Mobile Computing Device?

Back to this week's iPhone buyers, the folks surveyed in line weren't just buying the iPhone. When asked if they planned to buy another Apple product in the next 90 days, 14 percent said they would get an iPad and 8 percent said they planned to buy a Mac. Also, 23 percent of the prospective iPad buyers said their purchase might delay or replace their purchase of another consumer electronics product, such as a notebook.

Reiner estimates that between pre-orders and walk-ins (people who were able to buy with no reservations), Apple sold 1.5 million units. Apple Stores sold an average of 500 units each while Best Buy sold about 50 units each. He had no estimates for AT&T stores.

iPhone 4 Glitches: Signal Strength, Screen Discoloration

As smooth as things appear to be in terms of activations, users are writing to mobile blogs to report problems with their new iPhone. The two biggest issues are a yellow discoloration of the screen and the apparent loss of signal strength when holding the phone. Both issues emerged late on Wednesday from a fortunate few who had their phone delivered to their home via FedEx.

The screen problem appears to be resolving itself. Many readers sent reports to blogs like Gizmodo noting a yellow tint on their iPhone 4 screen. However, some people are reporting that with time and use, the spots fade away. The tint is believed to be caused by the bonding agent used to glue the phone together and eventually it burns off.

The "left-wing conspiracy," as some people are joking about it, is more persistent. Customers noted that holding the phone caused the bars to fade and some times lose the 3G connection because the hand impedes the antenna. This is especially true if held in the left hand, hence the joke.

Wall Street Journal tech guru Walter Mossberg was among the first to notice the disappearing bars problem. Apple told him it's not an actual loss of signal, just in how the phone displays signal strength on screen. Reports are mixed as to whether or not calls are actually dropped because of this, since AT&T's connections are notoriously spotty to begin with.

Steve Jobs has taken to corresponding with people in recent months, sending off one-line responses to some e-mail queries. When a new iPhone owner said he was losing the signal while holding the phone, Jobs replied "Just avoid holding it that way." To say this did not go over well on Twitter and reader reactions on blogs would be an understatement.

Early buyers have discovered that the "bumpers" Apple sells for the iPhone, a rubber guard that goes around the perimeter of the device, help minimize the problem. Needless to say this prompted all kinds of conspiracy theories and accusations that Apple knew the problem all along and milked it for another $30.

But Fast Company had the cheapest solution. It showed how strategic placement of clear cellophane tape fixed the problem.

Apple and AT&T did not return requests for comment on the launch.

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


Android, Apple, smartphone, RIM, iPhone 4G