Eager Customers Snap Up iPhones

SAN FRANCISCO (AP) _ Brandon Saunders, 16, had been saving his allowance and birthday money for months to get one of Apple Inc.'s coveted iPhones. <br/><br/>He waited in line with his 70-year-old grandmother

Friday, June 29th 2007, 1:03 pm

By: News On 6

SAN FRANCISCO (AP) _ Brandon Saunders, 16, had been saving his allowance and birthday money for months to get one of Apple Inc.'s coveted iPhones.

He waited in line with his 70-year-old grandmother for about eight hours Friday in front of a San Antonio AT&T store and left sunburned but grinning, shopping bag in hand.

``It's worth it,'' he said. ``It's like Christmas in June.''

The teen was among the first to get his hands on the coveted gadget from Apple, joining throngs destined to become braggarts of and guinea pigs for the latest must-have, cutting-edge piece of techno-wizardry.

Apple is banking that its new, do-everything phone with a touch-sensitive screen will become its third core business next to its moneymaking iPod music players and Macintosh computers.

The doors of East Coast Apple and AT&T stores opened promptly at 6 p.m. EDT with cheers from employees and eager customers. Stores farther west followed suit as the clock struck 6 in each time zone. In San Francisco, customers sang ``Auld Lang Syne'' following a countdown, as if heralding a new era in telecommunications.

Patrons at the Apple store in Palo Alto were treated to a very brief appearance by Apple CEO Steve Jobs. He momentarily posed for pictures before leaving.

``I'm glad it's over,'' said Carlos Sanchez, 19, at Apple's Fifth Avenue store in New York City, clutching shopping bags containing two iPhones _ the maximum allowed per person. ``I don't have to sleep outside anymore.''

Techies, exhibitionists and luminaries _ even the co-founder of Apple and the mayor of Philadelphia _ were among the inaugural group of iPhone customers.

The handset's price tag is $499 for a 4-gigabyte model and $599 for an 8-gigabyte version, on top of a minimum $59.99-a-month two-year service plan with AT&T Inc., the phone's exclusive carrier.

Because Apple designed a new way for customers to activate the cell phone service from AT&T, by logging onto Apple's iTunes software from their computers, many buyers headed straight home to christen the device.

In Newton, Mass., Khu Duong, 30, said he was excited but ``afraid to open it. You want to sit down and relax.''

Fellow customer Nick Seaver, 21, couldn't wait. He flipped open his Mac laptop right in the mall and paid $5 to use the wireless network and activate it. But because his current service contract with Verizon was set to expire the next day, Seaver got a computer message from iTunes he would have to wait 24 hours before his iPhone worked.

Will all the waiting have been worth it? For many, it didn't seem to matter.

``I just love getting new stuff,'' said retiree Len Edgerly, who arrived at 3 a.m. Friday to be first in line outside an Apple store in Cambridge, Mass. ``It's the best new thing that's come along in a long time. It's beautiful.''

Even Steve Wozniak, the ex-partner of Jobs, showed up at a Silicon Valley mall at 4 a.m. aboard his Segway scooter. He helped keep order in the line outside the Apple store.

The other customers awarded the honorary first spot in line to Wozniak, who planned to buy two iPhones on Friday even though he remains an Apple employee and will get a free one from the company next month. He said the device would redefine cell phone design and use.

``Look how great the iPod turned out,'' he told The Associated Press in a telephone interview. ``So who wants to miss that revolution? That's why there's all this big hype for the iPhone.''

Apple's media blitz wasn't without its glitches.

On NBC's ``Today'' show, co-host Meredith Vieira ran into problems trying to get the iPhone to work, laughing that ``this is why gadgets drive me crazy.''

With a team of Apple representatives hovering off-screen, Vieira was supposed to receive a call from co-host Matt Lauer in London. The iPhone _ billed by Apple as the most user-friendly smart phone ever _ displayed the incoming call, but she couldn't answer it.

Apple spokeswoman Natalie Kerris declined to comment.

The gadget, which Jobs has touted as ``revolutionary,'' has been the focus of endless anticipatory chatter and has been parodied on late-night TV. Since its unveiling in January, expectations that it will become yet another blockbuster product for Apple has pushed the company's stock up more than 40 percent.

Apple itself has set a target of selling 10 million units worldwide by 2008, gaining roughly a 1 percent share of the cell phone market. It's expected to go on sale in Europe later this year and in Asia in 2008.

In addition to the cost of the phone, for those currently using another cellular provider, there's also the cost of switching carriers.

Some bullish Wall Street analysts have predicted sales could hit as high as 45 million units in two years.

``That's nuts,'' said Rob Enderle, an industry analyst with The Enderle Group. ``Over-hyping this thing just puts it at risk of being seen as a failure.

``Apple will break (sales) records for a phone of this class,'' he said, ``but selling tens of millions of units so quickly is going to be tough. First-generation products always have problems that you don't know about until the product ships.''

More likely, Enderle and other analysts said, Apple will grow iPhone sales by refining its models and improving the software features _ much as it did with the iPod, which has fueled record profits for the company.

But unlike its foray into digital music players, Apple faces competition in cell phones from deep-pocketed, well-established giants, such as Nokia Corp. and Motorola Inc.

Apple has not disclosed how many iPhones were available at launch. But analysts expect it will sell out by early next week _ between sales rung up at retail stores and online through Apple's Web site, which has been a major distribution outlet for other Apple products.