iPocalypse? Snag Turns iPhones to 'Bricks'

July 11, 2008 — -- Long lines of disgruntled customers wrapped around city blocks across the globe today as Apple scrambled to fix a glitch in iTunes that prevented iPhone acolytes from activating the next-generation phones they had waited hours, even days, to buy.

The problem caused huge delays at Apple stores and other iPhone service providers worldwide, as store personnel wrestled with the issue and word of the problem spread on the Web. In order for an iPhone to be activated, it must be synced up with iTunes.

Robbie Sikander, a 16-year-old New York resident from Afghanistan, waited in line for three hours at the Apple store on Manhattan's 5th Avenue for the chance to buy his phone, but because of delays, it never happened.

"I've been waiting for three hours. AT&T is just not working," Sikander told ABCNews.com as he walked out of the store. "It made me question Apple. ... "I'm going to come back after lunch to try again."

Tanya Lawrence, a 28-year-old woman from Brooklyn, began waiting in line at 7 a.m. on Friday and was inside the store by 9 a.m. The system, however, was down.

"I was so livid. It was so anticlmatic this morning," she said. "The server was down, so in order to activate the phone we had to log on to iTunes, but that was down too. The buzz word this morning was 'just be patient.'"

As Matthew Pimm, 49, waited in line, he wondered why he had come.

"When it was a little hotter out, after I'd been waiting one and half hours in line, I started questioning whether it was worth it to be here," Pimm said.

Silicon Valley tech analyst Rob Enderle called the situation a PR debacle for typically untouchable Apple.

"They're hitting their most loyal customers. People who are waiting in line," Enderle said. "These folks are going to be kind of [mad]."

Enderle says that while it may not totally discourage hard-core users, it could cause a ripple effect in the cell phone market.

"At this point, there are alternative phones out in the market. You slow down people and get them to think about it. [With service] this is an expensive phone," he said. "A lot of these folks can't afford this phone. Maybe this is just enough to keep them from buying it."

Avi Greengart, a tech analyst based in New Jersey, said that consumer reaction will depend on how long outages continue.

"If they get the service back up by the evening news cycle they can say, 'Look. we were unprepared. ... but, all is well now. We apologize for a several-hour delay. It will have no material impact," Greengart said. "If the servers are down for the weekend, they have a severe problem."

Users of the first generation of the iPhone emailed ABCNews.com that they were continuing to have their own issues after updating the phone's software.

"Went to update to the new 2.0 software and was unsuccessful. Now my phone sits in 'Emergency Use Only' mode," wrote Rick Kidd from Glen Allen, Va. "I called my local Apple store for help and could not get an honest answer from them. My phone is rendered useless as we speak and I use it for business. Needless to say, I'm a bit miffed."

Another person emailed the Web site, "tried to update my original iPhone with new iTunes and iPhone software. Phone worked fine this morning. Now it's the most expensive paper weight in my office."

This new generation of the iPhone is getting a full international introduction. While the first version was only sold in six countries, today the new phone is being rolled out in 22 countries.

AT&T, which sells the handset stateside, is continuing to sell the phones to customers, but asking them to complete the syncing process at home.

"There seem to be worldwide issues with this syncing process and Apple is working on it right now," AT&T Wireless spokesman Mark Siegel told ABCNews.com. "What we're telling our customers in the stores is once we have activated their account, we're urging them to go home and try syncing it later on iTunes. ... Apple is working on this problem."

Apple did not respond yet to calls seeking comment.

Since the announcement of the 3G iPhone in June, Apple fanboys (and girls) have buzzed about the smart phone's latest incarnation with its gleaming new features — GPS! Third party apps! — and its shiny new price: $199.

But while Apple's carefully constructed buzz machine is definitely in tip-top shape, the excitement surrounding the new version pales in comparison to last year's release.

"There's no doubt there's going to be less of a circus atmosphere. Last year, Apple was introducing a whole new product category. Unless Apple's going to [introduce] the Apple iJetpack, we're not going to see as much excitement," said Michael Gartenberg, a consumer tech analyst at Jupiter Research. "But that means that the line at the Apple store might only go around the block twice instead of five times."

When the first iPhone went on sale, it retailed for $599. A few months later, that price was cut to $499.