Hundreds of gadget fans, or their paid stand-ins, lined up on Friday to be among the first buyers of Apple’s iPhone, a music- and video-playing phone that seeks to reshape the mobile industry.
Just after dawn, nearly 200 people were waiting outside Apple’s Fifth Avenue store in New York City for the device, which was not to go on sale for another 12 hours. The iPhone has whipped technology lovers into a frenzy usually reserved for rock stars.
“It’s a gift for my wife,” said Eric Brandon (42). “It’s a little expensive, but it’s worth it because there is no other phone that’s like it.”
Some aimed to make a personal profit from the iPhone, which costs up to $600 (about R4 200), by selling it or getting paid to wait. Others had been sent by family members or bosses keen on the bragging rights of being among its first owners.
“Someone is paying me a few hundred bucks to hold the spot,” said Roy Fuller (26), an administrative assistant who took the day off work to spend in line. “Right now it’s $500, $600 … I don’t know if I want to shell that out right now for a phone.”
The svelte, glassy iPhone goes on sale at 6pm local time in United States cities. It is a gamble by Apple co-founder and chief executive Steve Jobs to build on the success of the best-selling iPod music player and expand the market for the company’s software and media services.
The iPhone melds a phone, web browser and media player. It received rave reviews from US technology gurus who praised the gadget as a “breakthrough” device that is “beautiful”.
Jobs’s reputation as a technology trendsetter rests on whether the iPhone can do for handsets what the iPod did for digital music: unify a fractured and confusing market with a slick, easy-to-use product.
“They want to extend the dominance they have in terms of their ability to create really elegant hardware and software integration,” said Mark McGuire, an analyst with market-research firm Gartner. “This is the next big business unit for them.”
Rivals feel the heat
Some customers have camped outside Apple stores since the beginning of the week. Major newspapers have plastered their front pages with iPhone stories for days, and no tidbit has been too small to report for the galaxy of tech blogs.
The phone comes in two versions depending on memory capacity, and in the US requires a two-year contract from AT&T for voice and data plans ranging from $60 to $100 a month.
Early reviews have highlighted the large touch-sensitive screen and the full-blown web browser, while expressing concern over the quality of AT&T’s network, the Apple phone’s virtual keyboard and lack of features such as picture messaging.
The iPhone is already making itself felt in the industry before even a single unit is sold. Rival Palm said it could post a small loss and lower revenue this quarter because of slow sales and fears that the iPhone could hurt demand for its Treo smartphones.
“It’s likely that as people try [the iPhone] out, there may be some stall in our sell-through,” Palm chief executive Ed Colligan said on Thursday.
Apple looks set to sell many phones when the device hits shelves on Friday. “We’re building a fair number of them, but we may not [meet demand],” Jobs told the Wall Street Journal in an interview. “We’ve taken our best guess, but it wouldn’t surprise me at all if it ain’t enough.”
What’s less clear is whether sales will hold up once the initial burst of excitement has waned.
Apple’s shares have risen 30% since Jobs unveiled the phone in January, though the stock has fallen 2,5% over the past five days. Apple was up at $121,40 in premarket trade from its close of $120,56 on Thursday.
Jobs aims to sell 10-million units in 2008, which would give Apple a 1% share of the global market and at least $5-billion in revenue over two years.
Piper Jaffray said this month that Apple could sell 45-million units in 2009, putting the iPhone on par in terms of revenue with its two key businesses, the Macintosh computer and iPod. — Reuters
Additional reporting by Sinead Carew in New York