iPocalypse? Snag Turns iPhones to 'Bricks'

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.

Steve Jobs announced the 3G iPhone early last month at the Apple Worldwide Developer's Conference in San Francisco. The new and improved version offers GPS and new downloadable applications from the online Apple store and operates on a faster network. An 8-gigabyte model retails for $199 and a 16-gigabyte version costs $299.

Those new improvements will be a strong draw for consumers, according to NPD analyst Ross Rubin.

"The improvements on the 3G version are more evolutionary, more incremental. They fill in gaps that were widely recognized in the first product — applications, the speed of the network. These were all limitations," Rubin said. "That said, consumers now have an opportunity to pick up a faster iPhone that preserves the form factor and just about everything consumers liked in the first-generation product ... for half the price."

For Becky Worley, "Good Morning America" technology contributor and YahooTech columnist, that price — combined with a suite of downloadable applications — are what really put the iPhone ahead of the pack.

"Whatever you can dream up of wanting your phone to do, a developer somewhere is going to create it [and] people can purchase or download it for free," Worley said. "This is not some kloogy system that you have to figure out. This is iTunes. I think this is the tipping point."

The iPhone's new applications are especially interesting to Gartenberg as well.

"If you look at the buzz going on right now on Twitter, people are looking at the applications store even though they can't buy anything yet," he said. "There's a lot of excitement and anticipation there. ... It's an Apple event and a lot of people want to be a part of it."

Those people began queuing up in front of Apple stores around the country well in advance of the phone's on-sale date. In New York's Apple store on 5th Avenue, popularly known as "the cube," the line started as early as last week.

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