Static Continues for iPhone Debut

LOS ANGELES -- Apple's experiencing serious Microsoft-type growing pains with its launch of the new iPhone that went on sale two weeks ago.

It's not just that Apple can't satisfy demand for the phones. A new, longer procedure to activate the iPhone is making the in-store buying process much longer and keeping customers waiting in line and fuming for hours.

"It's a nightmare," said Grace Ciurluini, in line at the Los Angeles Apple Store at The Grove shopping center Sunday. By 11:30 a.m., just 30 minutes after opening, the store had sold its allotment of iPhones for the day. A line of about 50 people was all it could handle. Apple reps closed the line to newcomers, telling them to return Monday between 8 and 10 a.m. for vouchers to get phones.

Sunday, Apple Stores in New York, Seattle, Charlotte, Cincinnati, Nashville, Atlanta and Arlington, Va., said they were sold out of the $199 iPhone.

Saturday, Apple altered its store hours to try to handle demand, saying it would open daily except Sunday at 8 a.m. to serve iPhone buyers.

"Clearly, Apple is having manufacturing and software problems," independent analyst Rob Enderle says. "A star product like the iPhone does a lot of great things for Apple, but when things go wrong, it can bring down the entire image of a company."

Along with the new, faster and cheaper iPhone (originally sold for $599 in 2007), Apple introduced software aimed at businesses called MobileMe, a way to sync corporate e-mail with the iPhone and work accounts.

MobileMe has been fraught with problems — more than 70 bugs have needed repair — causing Apple to post several apologies online. "It's been a rocky road, and we know the pain some people have been suffering," Apple said over the weekend.

Enderle compares the iPhone relaunch to Microsoft's poorly received debut in late 2006 of Vista, the Windows upgrade that had consumers howling when it didn't work as advertised.

"Vista wasn't finished, and that's what the iPhone feels like," he says. "It's been rushed onto market, even though it wasn't ready."