Big problems between AT&T and Apple at iPhone 3G launch

So, after waiting three hours in line at the Apple store, Apple was unable to activate my iPhone. The reason? There was a "PLU" on my account. Except that when we called AT&T, there wasn't a PLU on my account. Verdict? I'm out-of-luck.

What's a PLU? It is basically a corporate discount code that indicates that the user is on a "foundation" account.

In my case, there is no PLU because there is no foundation account. Apple told me I'd have to get the phone at the AT&T store, which was fruitless since AT&T was out of the iPhone 3G by 9:30 a.m. I walked over to the AT&T store to ask if I could buy the phone at the Apple store then walk the two minutes to AT&T to activate it. Nope.

This is one of the clumsiest product launches ever. Apple knows hardware and software--it knows nothing about telecommunications, and the lack of an effective hand-off relationship with AT&T makes for problems like this one. (I wasn't alone in having the PLU problem. There were dozens at the Salt Lake City Apple store who had the same problem, and I've read online that huge numbers of people are having trouble activating their iPhone 3Gs and getting their iPhones updated to the 2.0 software. While I was in line, Apple's activation system went down three times (apparently nationwide).

Apple, you wasted three hours of my time this morning. At the end of it, I have two bureaucrats sitting in your store and in AT&T's telling me that while there's absolutely nothing wrong with my account, I can't get an iPhone 3G. AT&T's system is telling Apple that there's a problem...the same system that the AT&T people looked at and said there's not even the shadow of a problem.

Try again, Apple. For a company that makes as excellent products as you do, the buying experience couldn't be worse.

(As an aside, it's "ironic" that Apple has huge quantities of iPhone 3Gs at its stores, but has rationed out the phones to the AT&T stores. So, the party best able to activate the phones is least likely to be able to do so, thanks to Apple's desire to make as much margin on the iPhone 3G hardware as possible. It wouldn't seem like such a nefarious plan if activation actually worked.)

[conchdomer]

I too wasted 4 1/2 hours this morning to be told that I needed to go to an AT&T Corporate store. However, the ******* at Apple told me to but a phone with a new number now and AT&T would square it away. That would be my only chance to have one now or in the near future. So I bought it with a new account, the activation crashed while I was waiting so they told me to bring it home and plug it into a new version of Itunes and it would be ready to go. Well, i have now owned a new 3G paperweight since 0930 eastern and it is still not activated and AT&T said they could do nothing and I should return it. WOW, glad I wasted my day. It sure was simple with the first launch.

[dmbfrontier]

Excellent article! This truly shows how much Apple cares about its customers. I knew from the beginning that the In-Store activation idea was going to be a huge problem. Although, I am sure this was actually AT&T's doing since they do not make money when phones are unlocked for use in other carriers. As was the case with the milions of phones that were sent to the other side of the world last year.

[Applescrewedme]

ATT isn't being much help either. I'm on hold with their business care section now and finding out that THEY "aren't aware of any problems" the Iphone. So, not only is my original Iphone now hopelessly locked out, ATT says "sorry Sir, a contract is a contract and you must still continue with the two years as agreed." So, they won't help get these phones working again either.

[dmbfrontier]

Why would they want to waste their time and resources on customers when they can simply blame Apple.

[Zaunto]

Looks like Apple botched this launch. One would think that they'd use a process that already worked well (buy the phone, take it home, synch with iTunes, activated), but I guess not. After watching this world wide joke of a product launch, I will stick with my Blackjack for a while. May be my phone isn't trendy or sexy, but it works and does what I need a smart phone for.

[Jadams91]

First of all, You should stop throwing fits like babies. What did you expect going out on the same day and same time as 10 million other people to buy and activate a product. You all sound like a bunch of whinners. If you would have just waited a couple of days or a week, you wouldn't be having the problem you are. If the time with out your phone was so crucial, you shouldn't have jumped in on the new phone as soon as it came out.This happens with every "FAD" debut of a new product. If you didn't know this was going to happen, your not smart enough to run the IPHONE. Unless its idiot proof too? WOW.. what an amazing product. I'm getting the phone also, but i'm waiting. Whats my hurry? The 10mins to look cool in front of my co-workers because im the only one with it? Just shut up.

[luckymarlo]

Your the best, i could not have said it better.

THANK YOU a million times

[layclerk]

I agree. There are ALWAYS going to be snafus on the FIRST day of a new product, and I think the compulsory in-store activation is largely to blame. That being said, Apple and AT&T are still making enormous amounts on cash on this product, and they've had ample time to prepare for this global launch (even the original iPhone wasn't debuting all over the ENTIRE world on the same day), so they both owe their customers a huge apology, as well as compensation for all of the screwups today. Like you, I'm waiting a couple of months.

[csmarkre]

Absolutely. Although it seems as though Apple is much more at fault here for not preparing for the onslaught JUST AS LAST YEAR.. it's also NOT the best time to get a new phone when a zillion other people are doing it AT THE SAME TIME. Whining about it won't help. You should have just waited a week or two.

[sglewis--2008]

To be honest, I blame AT&T a HELL of a lot more than Apple. I think this is indicative of the cellular companies, their **** poor systems, and their lack of customer service, the whole mentality stinks.

I also had the "PLU" problem, and also did not get a 3G since by this time AT&T was sold out. The Apple sales guy on the floor went to the assistant supervisor, who called in to AT&T, and ultimately a manager got involved to, and they spent *90* trying to resolve the issue with my account before giving up. Ultimately, they got the "PLU" removed from my account, but the next attempt returned an error instructing me to buy or activate at an AT&T store, and AT&T was insistent that that was the END, had to do it, no other choices.

Apple couldn't have tried harder, and the problem was clearly unrelated to the activation process on THEIR side (although I know it went down while I was there) - it was AT&T plain and simple.

For Apple's part, we're in south Florida, they provided water (it was an outdoor mall so the line's were outside), and had people walking around the whole time between 6am and 8am answerng questions, etc... they really tried their best.

[dcmanuel]

While I can see this is most likely an AT&T problem, the fact that they don't have phones to sell is certainly NOT an AT&T problem... Apple shorted them phones to make more money and now it's blowing up in their face.

[kitsap360]

I bought at an AT&T Store this morning, and it was smoothly. Trying to activate, however, is not. And this is all Apple's fault. They were ill-prepared for this launch, and didn't seem to have the appropriate resources online to support the massive wave of activations. It's finally working, 3 hours later, but COME ON. Apple, love your products, but this launch was horrid.

[TaraLC]

We're creatures of "want", "need", "have to have" and this was bound to happen. It always does when the "latest, greatest" comes out. Suddenly what we have that was wonderful yesterday is suddenly not good enough.
Although I believe it could have been a little less vituperative, I must agree with Jadams91.

Was it really life and death that 10 million people HAD to have the newest iPhone on the same day it came out? What is wrong with the iPhone you have now that was most likely working just fine yesterday. Mine still is. Works great. Did I pay too much for it three months ago? Yes. Was I a bit disheartened to find out a newer version for almost 1/2 price was coming out 3 months after I bought mine? Sure. Did I get over it? Of course.
We live in a technology driven age and the bottom line is regardless if you have the old iPhone, the new iPhone or a subatomic, 3D teleportation-communicator that can bend the time continuum, next year it'll be out dated, in 2-3 years it's going to be on loan to soldiers or abused women and in 5 years it's going to be junk. And this is stretch.

If you rely on your phone for work and your livelihood, again I agree, today was probably the most unpropitious of days to rush out and get a new iPhone. That is unless my some ironic and cruel twist of fate your current phone was run over by the garbage man this morning, and not by any purposeful means of your own.
Everyone was warned when Windows Vista came out.. Wait..don't jump the gun, there are bugs, it needs fixing. Maybe the iPhone 3G itself has no bugs, maybe it's just the process here but the philosophy is still the same. The first iPhone release was plagued with the same warnings. If you didn't learn then perhaps now would be a good time to do so.

Both iPhone launches were so widely publicized and anticipated, there's no question Apple failed to prepare for the surfeit demand. It's no different with the gaming companies either. The Nintendo Wii has been out for nigh on 18 months and it's still difficult to find it stores. Not too mention many of it's most popular games.

I'm sorry for everyone that is frustrated, aggravated and most likely without a phone now. We've gotten used to our technology. But if you can stop, take a minute and be truly honest with yourself I doubt anyone is unable to look in the mirror and say "You should have known better. What were you thinking? The ego wins again."
Don't be hard on yourself, no use getting mad at either corporation here, it's happened before and it's going to happen again. It's called capitalism. Just wait until the iPhone 4G comes out or iPhone Pink, Blue, Green, or Lemon. Hopefully all of you here WON'T be one of those first in line.

I hope all works itself out quickly for all of you but in the meantime, I hope you can stand back, take an objective look around you and realize it's all very trivial compared to the basic living and dying of every day.

TLC

[impromptu19]

Seems like you have hours to kill........not me buddy. Tender Loving Care

[Nodack]

I sypathise with all of you having problems activating your new iPhones today. It's not going as smooth as Apple had hoped I'm sure. The exact same thing happened last year at the release of the first iPhone. The basic problem seems to be from all the reports coming in is that the system is overrun because of the large numbers if people trying to activate their phones and everybody else trying to get the 2.0 software upgrade at the same time.

What does this mean? Will everybody that bought a new iPhone want there money back and go buy some Samsung clone? Some might but most will forget all about the horrible crimes against humanity they had to endure on opening day after a couple of days.

It means that the iPhone is selling like hotcakes and they can't keep up with the demand.
It means that my Apple stock is poised to take off again. :)

[phateskimo]

the author wades into territory way beyond his expertise and makes claims that are, well, false and assumptive...I work for one of the mentioned companies- yes there were issues but the mysterious 'PLU' that the author mentions isn't something that can be on an account... We have PLU's, though the have nothing to do with accounts, and were not the source of his issue. he saw that there was a problem, heard people using a term that he didn't understand and decided to write an article.

oh well, another record breaking day for AT&T and Apple and a bunch of people getting the coolest phone out there.

Can you hear me now >:D

[thecatfanspeaks]

Apple stock is down $4 today. AT&T is down $.37.

Can you hear me now?

[wowthatsbad]

We can hear you load and clear.

"PLU" type problems are simply the result of wireless carrier's running their businesses with the financing complexity of an auto dealership. Subsidizing the phones at sale in exchange for the contract rate over a period of time introduces complexity in the process. Frankly the systems, marketplace (high turnover), and poorly skilled staff, of this business make this a rotten customer experience, regardless of carrier. Its always a problem switching anything that affects monthly rates because those rates were used to finance/subsidize a previous purchase. The systems are poor, the staff is marginal/ underpaid, and the customer's want flexibility. Finance 101 says ATT wants a steady stream of payments, not flexible streams of payments.

Apple saw that problem and felt it was holding the market back. They got ATT (who was in bad shape before the iphone) to relinquish some control and let Apple change the nature of the marketplace. It worked for Apple and helped ATT, though ATT did nothing remarkable itself, they are riding Apple's coattails. Sprint may be next after the exclusive runs out, or perhaps they will open it up more carriers.

Apple wants to break the carrier's hold on wireless devices. Carrier's need some compensation for calls and data going through their licensed networks, but devices that can use free(WI-FI) networks should be allowed into the marketplace and until the iphone, carriers crippled those features on phones. Carriers want to build smart networks that they can charge for every little service on, computer people want dumb networks (i.e. internet) where the smarts are in the phone that is controlled by the customer.

p.s. we can hear you now and we know you don't work for Apple.

[v.Next]

Well, anytime dealing with a mobile carrier like AT&T you're bound to have issues of bureaucracy and poor customer service... All mobile carriers are like this so I can't completely fault Apple.

[sandiegotubrider]

"Apple, you wasted three hours of my time this morning."

Apple did not waste your time. You did it to yourself. Stop whining. Is it is really necessary to be the first one?

I want a iPhone but my time is more important so I will just wait a week or two to get an iphone. I will then be able to walk into the store and pick one up without a wait. Plus I will be able to check out all the troubles everyone is having and make sure all the new pieces of software and services actually work based on the marketing departments claims.

[PissedOffCustomer]

To Jadams91 - What I expect is for Apple and AT&T to anticipate such situations, especially based on last years experience.

My phone is down to... hmmm... wonder if AT&T is liable for breach of contract at this point... gonna look into that!

[jelloburn]

I'd like to see how it works out when you go buy a phone directly from Sony Ericson or Nokia and then ask them to activate it for you. They're going to tell you to shove it up your *** and go talk to your service provider. Apple is being paid a subsidy from AT&T on these phones, and I imagine they don't receive anything from AT&T if the phone isn't activated on AT&T's network.

That is why they want people to activate in-store and is also why they won't sell you a phone when you are getting a discounted plan. AT&T probably gave Apple extremely limited access to account upgrades in Apple Stores, which means they can't update a PLU account. If AT&T's servers are telling Apple that you have a PLU on your account, I would assume that an Apple store associate cannot just override account settings.

People need to stop this feeling entitled to getting everything they want when they want it and perhaps wait a week until the hub-bub has settled down and then buy it from AT&T. I'm so sorry that your experience was not a pleasant one, but I never feel sorry for early adopters of consumer electronics.

[secretapple]

I feel bad for people experiencing this but here's the deal...if you get any sort of discount on an att plan, its considered business which can't be done in the apple store. not sure why, but that's the way it works for now. you will need to call att, have them temporarily remove your discount and then in minutes you will be able to complete the transaction at the apple store. just be sure to contact att to have them add the discount back on. It's a pain, but a work around.

[tekwiz4u]

Wow...crashed servers. Lets do a breakdown on this breakdown. 1) VERY BAD IDEA for In-Store activation. Whoever came up with that idea should be fired. This very news OVERSHADOWS everything about the iPhone launch. 2) Poor planning on the capacity. More than 3 COUNTRIES are going to hit the servers. AND HIT IT HARD!!!! Did they have any clue on load balancing the servers, or dedicate a huge cluster of them for this functionality? Guess not! 3) iTUNES update with 2.0. After everything that's going on, MORE traffic for the servers for grabbing the latest 1st gen firmware. Why give it out TODAY?!!!!!

3 STRIKES...YOU'RE OUT PAL!

I have the older iPhone, but patience will be on my side when I hold out for a couple of weeks.

[Thomas, David]

Total Recall ... remember how AT&T fared last year. I'm waiting, because I know AT&T insisted on this type of activation. I just wish Apple had released this version as unlocked, then this would all be a moot point.

And I second what someone said earlier, we all had a pretty good idea that the in-store activation was a bad idea.

[jasontm1]

To the person that implied Apple held back phones from AT&T so they could sell them in the Apple Store. A friend of mine was 10th in line today at an AT&T store when they sold out of iPhones. He was able to go ahead with their direct fulfillment option to secure a phone. The most interesting part is that his salesperson said they had PLENTY OF PHONES IN THE BACK but had reached their sales limit for the day and were not allowed to sell any additional phones. Before offering the direct fulfillment option he suggested that my friend get back in line first thing tomorrow when they started selling more of their stock again.

For what its worth...

[JREwing78]

I have heard this, too, that AT&T

AT&T has also been quoted extensively in the local news here (Houston) that they "expect to have more phones tomorrow."

Well, duh. That makes sense if they're withholding inventory.

I have been a Houston Cellular/Cingular/AT&T customer for more than 10 years now and have never had a problem with my service, just with the bureaucracy and typical cell-phone company management crap, but I figure it' would be for the same for any other company I might switch to, so I stay.

Pretty soon my wife and I will have iPhones and we'll be locked in another 2 years.

[CardDawg]

I, too, wasted time at the Apple store this morning, only to be told that my student discount made me ineligible to receive the iPhone there. I went to the AT&T store, where the manager told me that the problem had been solved and to go back to the Apple store (because the AT&T store had a long line). Went back to the Apple store (fortunately did *not* have to wait in line again), where the problem was, surprise!, not fixed. An Apple employee called AT&T, was told the problem would be fixed within 30 minutes. An hour later, still nothing.

I do have to say that all the people I've dealt with about this issue have been incredibly nice and seemed to be trying their best to help. I blame AT&T more than Apple -- seems that AT&T could and should have foreseen this problem in advance and arranged for Apple stores to be able to handle it.