Despite the outages, shortages, and related hand-wringing associated with last Friday's iPhone 3G launch and Thursday's release of the iPhone 2.0 firmware, Apple says there were nevertheless 10 million downloads from its new App Store in its first weekend of existence.
And those long lines? A total of one million iPhone 3G units were sold. The millionth phone was sold on Sunday.
"The App Store is a grand slam, with a staggering 10 million applications downloaded in just three days," Apple overlord Steve Jobs said in a release Monday. "Developers have created some extraordinary applications, and the App Store can wirelessly deliver them to every iPhone and iPod touch user instantly."
And on the phone sales, Jobs said, "It took 74 days to sell the first one million original iPhones, so the new iPhone 3G is clearly off to a great start around the world."
There are currently about 800 applications available for download in the App Store, over 200 of which are free; at launch, there were about 550.
This post was updated at 10:34 a.m. PDT with further details of the server issues.
NEW YORK--The process of obtaining an iPhone 3G appears to be going in slow motion because of AT&T activation server crashes that have been confirmed in New York, San Francisco, and Palo Alto, Calif.
Unlike its predecessor last year, the iPhone 3G must be activated in-store, an antihacking measure that Apple had said could take 10 to 15 minutes.
That's long enough to make the line move a lot more slowly than the speedy process that made last year's iPhone launch astonishingly efficient. But crashing AT&T servers required for the activation made it even worse.
The initial lines for the iPhone 3G paled in comparison to the lines for the original iPhone, when everyone predicted shortages, but ultimately, it was possible to waltz into the Apple store several hours after launch time and get a phone almost immediately. Apple set an excellent precedent for any future tech product launches.
It seems as if the iPhone 3G launch has failed to live up to the product launch standard Apple set last year. The new process didn't have the same assembly line precision, as evidenced by the first person to walk out of the Fifth Avenue store with an iPhone: 24-year-old David Yoo estimated that he'd been about 75th in line, but he somehow managed to be first out of the gate with a phone activated.
But later in the morning, overloaded activation servers made lines slow to a crawl, with outages across the country. As the hordes of geeks and bloggers on Twitter reveal, some lines were at a standstill. High-energy product launches can, of course, lead to exaggeration, but it's clear that some people are a bit impatient.
"In-store activation is a really, really bad idea--every line I saw was around the block and not moving," New York-based Fred Benenson wrote. "I tried getting an iPhone today--lines, lines, lines," wrote Darren Herman, who posted photos to his blog of a slow-moving line outside the SoHo Apple store in downtown New York.
But then, in what the Twitter-verse has come to call the "iPocalypse," the servers needed for the activation process crashed completely.
Apple soon ditched the in-store activation and was simply "unbricking" phones, letting buyers activate them at home rather than hold up the line because of crashed servers.
CNET News' reporters in San Francisco confirmed this, and later in the day, employees at the New York Apple store confirmed that they were doing this as well. My colleague Tom Krazit was told that while it was initially AT&T's activation servers that crashed, those are back up and that the current problem is with Apple's iTunes.
That's not entirely accurate, AT&T representatives told CNET News.com later. "This is not an AT&T activation server issue...Apple (is) working to address issues affecting its iTunes software right now," an e-mail read. "We are suggesting to our customers that, after purchasing their new iPhone and voice and data plan, they sync the device later at home."
The unbricking process was taking about 10 minutes, even minus the final activation. Around 10 a.m. PT, an Apple store employee in San Francisco informed those waiting in line that the activation service was back up and running.
Outside of major urban hubs, there were also early signs of shortages. Boulder, Colo.-based Matt Galligan twittered that his local AT&T store had only 55 phones in stock and that he wasn't sure whether he'd be able to get one. And Jacksonville, Fla.-based Judson Collier said he'd checked three AT&T stores, only to find them all out of stock. Murray Williams in Lowell, Ark., twittered that the store would be out of stock before he got to the front of the line.
The AT&T store in New York's Times Square was out of 16GB iPhones by noon. Elsewhere, tensions amounted. CNET's Josh Lowensohn posted to Twitter that a fight broke out at an AT&T store when a group of people tried to cut the line.
Meanwhile, owners of older iPhones who were attempting to upgrade the software were getting error messages instead. The activation servers had affected those, too.
But ask yourself this, gadget fans: do you really need the iPhone today? At worst, the activation process will get more efficient as store employees grow more used to it. At best, you can get one tomorrow or next week. It's OK. You'll survive.
NEW YORK--In an informal poll of random people waiting in line for the iPhone 3G outside the Fifth Avenue flagship store, it looks like roughly 75 percent of these uber-early-adopters plan to purchase the higher-end 16GB iPhone.
News.com Poll
Most of the other 25 percent plan to get the lower-end 8GB model, though a few people told me they still hadn't made up their minds (they still have an hour, after all) and one said he planned to buy one of each. But since these are the most hardcore of hardcore iPhone fans, it's likely that this 3-to-1 breakdown won't have any bearing on mainstream sales.
Another thing: People seemed to be pretty clueless when they were asked whether they knew if they would have to pay an additional $200 for the phone. Some existing AT&T customers aren't eligible for the subsidy on the phone and will have to pay up, but almost everyone in line seemed to be unaware of this distinction.
I attempted to talk to a few orange-T-shirt-clad Apple Store employees, who were happily chatting it up with people waiting in line, but the employees quickly reverted to the company's standard "clam up around the press" protocol and suggested I track down company publicists before I could learn exactly how many Apple reps were there on hand at the store.
Meanwhile, a kid near the front of the line is repeatedly yelling "INVISIBLE SHIELD!" Please, somebody get him an iPhone and get him home.
NEW YORK--There are video crews gearing up at the Fifth Avenue Apple Store for the iPhone 3G launch in just under two hours, but the line is only about a quarter the length of last year's.
And, to boot, many of the eager Apple customers near the back of the line got here within the past half hour. Clearly, a five-day wait isn't necessary this time around. (It wasn't last year, either, as customers soon learned.) The line continues to get longer as more people show up, but it's gotten obvious that the wait for the iPhone 3G won't be any longer than the wait for a moderately popular concert or movie premiere.
So who gets the first iPhone? Well, the concept of "first" has been muddled a bit in this case, because the first spot in line hsa been occupied by a rotating group of sustainable-agriculture activists from Waiting for Apples since July 4.
The iPhone line has gotten a little bit longer.
(Credit: Caroline McCarthy/CNET News)NEW YORK--Now this is more like it.
For days, the line at Apple's midtown flagship store for the hotly anticipated iPhone 3G had consisted solely of the crew from Waiting for Apples, who have the dual goal of breaking the Guinness world record for "longest wait for a product release" (or something like that) and simultaneously spreading the word about sustainable agriculture.
Now, three more people have joined them, and these fellows look a whole lot more like what we'd expect people waiting in line for the iPhone to be: Skinny, wearing jeans and black t-shirts, and probably not a day over 17.
But to put things into perspective, this time last year the line at the Fifth Avenue store for the original iPhone was totally ridiculous. But back then everyone was freaked out that there would be shortages of the phone and that they wouldn't get one for months if they didn't camp out for days beforehand. One smooth launch later, Apple fans don't seem anywhere near as concerned.
Besides, the iPhone 3G comes out at 8 a.m. rather than last year's 6 p.m., making it possible to simply wait overnight, grab the phone, and then take your shiny new toy to the office.
Meanwhile, across the country in San Francisco, the line stands at two.
What does the iPhone 3G have to do with the future of social platforms like Facebook and OpenSocial? A lot, actually.
It's because of the iPhone App Store, the add-on to the iTunes Store that opened its doors on Thursday in anticipation of the new device and its iPhone 2.0 software.
With more than 550 third-party applications available at launch, Apple's new mini marketplace means that for the first time since the social-application craze started more than a year ago, the hottest new trend has nothing to do with Web-based networks.
The iPhone App Store, the add-on to the iTunes Store, made its debut Thursday in anticipation of the iPhone 3G's release Friday.
(Credit: Apple)"(The iPhone is) a device that's made for 'social,'" said Bart Decrem, a veteran of browsers Firefox and Flock who went on to found Tapulous, a start-up firm that has released three iPhone games in the App Store and plans to roll out more. "This is a device that's always connected, that's always on you. It knows where you are, you can take pictures with it, and you can send messages with it."
The new iPhone: it's pretty, it's shiny, it's versatile, and owners rarely leave it out of their sight. The implication for Facebook, as well as open-source social network platform OpenSocial, is that if developers see more compelling reasons to build software for the iPhone instead, they could jump ship.
And there's a big reason: money.
It's true that there is not an obvious path to jump from one to the other. Traditionally, the Web development space has been distinctly separate from the tight-knit community of Mac developers, said developer Jesse Farmer, who writes about both on the 20bits blog. "There's cultural differences and technical differences. People who develop software for social platforms tend to come from the Web world. They tend to travel in their own social circles," he explained.
When it comes to the App Store, Farmer said the first ones to the table "are the people who are really into that stuff. The Mac developers are going to be the first ones there, mostly because developing for the iPhone is going to be a lot like developing for the Mac."
The money factor
There might be an apples-and-oranges vibe when it comes to comparing social-platform developers with iPhone developers, but the money factor could easily make some of them willing to bridge the gap.
For small-time developers, it's become increasingly tough to make a buck or two from applications on Facebook's platform, where the easiest route to cash is ad impressions. The space has become dominated by half-billion-dollar firms like Slide and RockYou, something that Farmer has pointed out in his analyses of developer discontent.
"If you've already succeeded on Facebook, OpenSocial, or whatever, there's really no reason to (switch)," Farmer said of iPhone development. Thing is, there are thousands upon thousands of developers who haven't succeeded, or who enjoyed only flash-in-the-pan success. "People who are sort of disillusioned with social networks and haven't found a way to succeed...I can see them moving over and trying it out."
The iPhone App Store is structured completely differently, and that might be appealing. True, there are barriers to entry: a fee to join the developer program, and selectivity when it comes to apps that wind up in the store. But that could get a thumbs-up from developers who grew tired of the saturation of Zombie Bite-type games on Facebook's platform.
"It's disruptive in the way that going from DOS to Windows was disruptive," Tapulous' Decrem said. "That means that there are tremendous new opportunities, and entire new classes of applications and companies will come into existence." He said that with the iPhone 1.0 software, which required a "jailbreaking" hack to be able to install third-party applications, the games released by Tapulous had already seen a million installs. In other words, people want this stuff.
And here's the real kicker: the creators of iPhone applications can charge a fee for downloads, thus creating a way to make money that's unheard of on free-for-all social-network platforms. Of the 552 applications in the App Store at launch, 417 of them are paid downloads, one of them costing a whopping $69.99. (That'd be ForeFlight, which provides runway and airport data for airline pilots.)
"Apple has built payments directly into the app distribution model in a way that is already comfortable and familiar to over 100 million iPod users," said Eric Litman, whose new start-up Medialets also hopes to cash in on the iPhone developer gold rush. "Buying and installing an iPhone app feels very similar to buying a song through iTunes, and that familiarity is undoubtedly going to work to the advantage of all developers on the platform."
Investment bank Piper Jaffray estimated last month that the iPhone App Store could be a billion-dollar business by 2009, and that nearly 90 million people worldwide could own compatible iPhone and iPod Touch devices by the end of that year. That's a bigger audience than Facebook has now--though it should be noted that the number is probably optimistic. And the lower price point for the new iPhone 3G, just $199 for the lower-end model, means that its reputation as a geek fetish toy will probably go away soon. Charging five bucks for an application could bring in some real dollars.
Advertising industry ready to jump in
But even if a developer is committed to distributing his or her iPhone applications for free, the ad industry is already chomping at the bit. That's in stark contrast to the debut of the Facebook platform, where many developers simply used Google's AdSense at the start, and it wasn't until months later that Facebook application ad networks started to pop up. (Now they're everywhere.)
"There is a lot of ad agency excitement right now about the iPhone, the iPhone 3G, and advertising possibilities on the iPhone," said Greg Yardley, founder of iPhone ad start-up Pinch Media. "I know that inventory just on regular Web pages optimized for the iPhone is selling fast."
There's still no concrete reason to believe that advertising on the iPhone will work much better than advertising on a social network, just a lot of statistics and guesswork.
"Mobile has been the redheaded stepchild of advertising for a long time, simply because the tracking has been really bad, and traditionally, the targeting has been really bad," Yardley said. "Now that the iPhone is going out there, there are more interesting ad opportunities. I think we're going to see an increase in spend, but it's not going to be a flip of a switch. You're always going to get a few agencies that are going to get out there and do interesting things, but those agencies were going to do interesting things, anyway."
Even if the money's not as solid as it purports to be, the promise is there, and that's going to be enough to make some developers shift the focus from their Facebook or OpenSocial applications to Apple's shiny device. It's guaranteed to shake things up, at the very least. "Not only will app developers move to the iPhone, I think we'll see the social platforms themselves move there," Litman said. "The iPhone is an inherently social device, in many ways even more so than social-networking platforms."
There's a lot of big dreaming, but right now, the biggest priority is getting used to the new landscape. When asked what he planned to do first after the iPhone 3G launched, Yardley said, "We have to make sure our servers stay up."
Looks like some big-media deal-making went into this one.
Photobucket, the photo-sharing site that was acquired by News Corp.'s Fox Interactive Media last year, has announced the launch of an iPhone application (download), just like everybody else.
Users can browse their Photobucket albums, as well as upload images from the iPhone to the service with a single click. The application costs $4.99.
But Photobucket had a more interesting announcement on Thursday, namely a multiyear partnership with Ask.com, the search engine owned by new-media conglomerate InterActiveCorp.
Through the deal, Photobucket will use exclusively Ask.com search for its photo, video, and Web searches, and some of Ask.com's text and display ads will be shown on Photobucket. No financial specifics were mentioned.
"Photobucket has one of the largest online audiences, and now Ask.com provides these consumers with the answers to the questions they ask every day," said Andrew Moers, general manager of partnerships for Ask, the No. 4 player in search. "This alliance furthers our strategy to bring Ask.com to consumers worldwide through a broad range of Internet access points."
Photobucket sister company MySpace, meanwhile, has its search (and many of its ads) handled by Google. But on that note, Google has provided ad technology to Ask.com since the dinosaur days of 2004.
Blurry Webcam photo shows a network news truck, but no other hullabaloo, outside the Apple store on New York's Fifth Avenue.
(Credit: Caroline McCarthy/CNET News)NEW YORK--It's a lovely day here at the Apple Store on Fifth Avenue and East 58th Street, at least so far. Temperatures are slated to hit 90 degrees within hours, and the short line for the iPhone 3G hasn't gotten any longer. It comes out on Friday at 8 a.m., in just slightly less than three days.
I was explaining to a friend over breakfast this morning that I think there's a critical-mass issue at hand; you need about 15 people in line to really get the ball rolling. Then would-be queuers will stop wavering and stake out a place to ensure that they get a phone on day 1.
Currently, there are only about five, and they're a group of activists who are all together. Put in five more, and the snowball effect might start.
But last year's remarkably smooth, shortage-free launch of the original iPhone undoubtedly has an impact too. This year, people are much more chill.
But who did show up, as evidenced by this picture taken with (naturally) my MacBook's Webcam, is a broadcast operation from WPIX, the local affiliate of the TV network The CW.
There was no camera crew in sight, so it could be that the station just wants to have a choice spot carved out for Friday's festivities. Or they could've been hunting for a story, only to find out that for the most part (the Waiting for Apples group notwithstanding), it's still business as usual at the Apple store.
Disclosure: The CW is joint-owned by CBS. CNET News is published by CBS Interactive, CBS unit.
Things are still quiet outside the Apple Store.
(Credit: Caroline McCarthy/CNET News.com)NEW YORK--Some time shortly before midnight, I stopped by the Fifth Avenue Apple flagship store here to get an update on the folks who were waiting in line for the iPhone 3G. It hits stores Friday.
It's very quiet here. There is no one new who has lined up for the phone; the line still consists exclusively of the sustainable-agriculture activists from Waiting for Apples. (I guess eager fanboys got our memo that as a trend, gadget-queueing has reached the tipping point.) Regardless of what you think of their mission, these happy hippies are extremely pleasant to talk to and say that they have been thoroughly enjoying their stay--despite constant press coverage, not all of it good.
"I was a little worried after I read some of the comments on Engadget about us," one of the Waiting for Apples volunteers, Heyward Gignilliat, who teaches English as a second language at Boston's Northeastern University, told me. Nothing against Engadget--it's just that blog commenters can be awfully nasty. "But overall, it's been pretty positive."
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The Apple Store, open 24-7, offers bathrooms and free Wi-Fi that extends into the plaza around it. Days can be blisteringly hot, but nights are tolerably breezy and the thunderstorms dotting weather forecasts have stayed away. The serene glass-box design of the subterranean Apple Store and the adjacent decorative fountain make for a nice setting. It's bound to be a mess when the line gets longer, but for now, things are chill.
They've had a few temporary guests, Gignilliat told me. A young man from Venezuela showed up with his mother as part of a sightseeing trip in New York prior to heading to the Berklee College of Music in Boston. He'd planned to be the first in line at the New York store, but his plans were foiled by the presence of Waiting for Apples, who hope to snag a Guinness World Record for their week-long wait. He consequently decided to head to Boston early, Gignilliat explained, and try to be the first in line at an Apple Store up there.
Another noted visitor was New York Times tech pundit David Pogue, who'd also planned to be the first in line and appeared to be surprised by the presence of a line already (though who knows if that was a planned gag for the camera crew he had in tow).
And another speculator was milling around the line around midnight, checking out the scene and saying he was planning to join the line, but his willpower seemed questionable.
But for now, the line is quiet, with only a handful of people holding down the fort. They should enjoy it for now--come Wednesday or Thursday, things are going to get a lot more hectic at the intersection of Fifth Avenue and East 58th Street.
Waiting for Apples' iPhone 3G encampment. Large tupperware container is full of worms.
(Credit: Caroline McCarthy/CNET News.com)NEW YORK--A message to those of you thinking of hopping in line for the iPhone 3G at the Fifth Avenue flagship store here: there are thunderstorms predicted. Please stay home and spend some time with your friends, families, and pets. You're just going to get a sunburn and look silly.
Plus, a scrappy half-dozen activists who call themselves Waiting for Apples are going to get all the positive press. They're hoping to set a Guinness World Record as well as spread the buzz about sustainable agriculture, and are waiting in line with a solar-power generator, a bunch of yoga mats, a compost bin full of hungry worms, a soundtrack of the Talking Heads' More Songs About Buildings And Food, and an adorable six-month-old--don't worry, she's only there for a few hours a day, has plenty of shade, and will stay home if it's rainy or sweltering.
They might have also soaked up the last bit of novelty associated with waiting in line for a shiny new gadget for days, if only because nobody thought to bring live worms to a product launch before. Anybody else, well, let's just say I can't guarantee I'll be so nice to you. Waiting in line for the iPhone is officially as passé as, "Dude! You're getting a Dell!"
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Remember last year's snaking line? The funny thing is that no one left the Apple Store that night without a phone. Apple's retail process was impressively streamlined, so that if you showed up right after the phone debuted, you'd still have gotten one an hour or so later. Multiday line-waiters were matched within hours by people who smelled much fresher than they did.
Then the folly of it all was added to even more when Apple slashed $200 off the price of the iPhone just more than two months after it hit stores, meaning that everyone who'd waited in line to buy one looked a tad overeager. And dare I say that after the tech press jumped all over the pre-launch hullaballoo of Sony's PlayStation 3, Nintendo's Wii, the video game Halo 3, and Apple's own Leopard software, the whole "wait in line for a gadget for days on end" thing has just gotten tacky.
Some people say they're doing it for the "experience." Well, if your idea of "experience" is sitting on your butt for five days, subsisting on hot dogs and salted pretzels, more power to you. There are plenty of other "experiences" to be had in New York that could be uncovered in about ten seconds of Web searching, all of which are much less sedentary and much less sunburn-y.
Others are doing it for the publicity, either for personal gain, to collect donations for charity, or to promote some kind of cause celebre. But answer this for me, without any Googling: which charities were represented by people waiting in line for the iPhone last year?
Can't name many, right? That's the thing. Last year, it was quirky ad agency Anomaly that walked away from the iPhone launch with good press by waiting there to support Keep A Child Alive; this year, it's more or less already established that Waiting for Apples will be the one people remember, if any. Last year, marketers flooded the iPhone line to hand out T-shirts, stickers, snacks, and anything that might get some visibility; the atmosphere got so clogged that single brands and causes quickly got jumbled in the chaos. That kind of PR-soaked atmosphere just isn't that efficient for promotion.
And, gadget freaks, if you're just waiting there to get the iPhone and play with it for months on end, just keep in mind that the original iPhone had no shortage issues until the new version was in the works and Apple stopped making Version 1.0. Also keep in mind that you're waiting in line for five days for a pricey consumer device that will likely be outdated within a year.
Come on. Wall-E would so disapprove.
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