iPhone or iCan't: Has Apple Gone Sour?

July 14, 2008 — -- Has Apple finally gone sour?

Some frustrated Apple customers, either turned away from stores after waiting in line for hours or left with malfunctioning next-generation iPhones after spending hundreds on the device, are saying "yes."

An inadequate supply of iPhones at many AT&T locations, combined with a glitch in iTunes that prevented customers from activating their phones, caused chaos over the weekend. That's when Apple enthusiasts who flocked to purchase the new gadgets instead found the notoriously well-run Apple operation unravel before their eyes.

Laura LaLone of La Porte, Ind., told ABCNews.com that she drove 90 minutes with her anxious 14-year-old son only to stand in line for another three hours and leave empty-handed.

LaLone said that she was told AT&T – the sole provider for the iPhone – was not available in her zip code.

"We [know that's] not the case," LaLone wrote in an e-mail to ABCNews.com. "We have many friends who have AT&T cell phones."

"Apple's solution to this delay and trouble was to have the employees go around and pass out bottles of water!" said LaLone. "They made no attempt at communicating their troubles with customers and tried their best to hide it."

Californian Paul Summers camped out overnight at his local Trabuco Canyon, Calif., AT&T store to make sure he and his wife got new iPhones as soon as they were released.

And while Summers and his wife did walk away with new phones, they were no more useful than a pair of paper weights.

"[We were] not able to activate the phone in the store," Summers in an e-mail to ABCNews.com. "[The AT&T employees] told us to activate them at home, and when we tried that our phones were bricks."

But amid the horror stories were also those of success: Many new iPhone users – even some who were tied up in the chaos Friday and Saturday – still say the wait was well worth it.

Having spent six hours in line at a Dallas Apple store, Joseph Kasales Jr. told ABCNews.com that he too ran into activation problems, but is now happy with his new purchase.

"I knew there was going to be a crowd and had planned accordingly – water and snacks," said Kasales. "All in all, it was worth it."

Tech analysts say that it may be customers like Kasales – who despite the frustration still end up pleased with the product – who will prevent the deterioration of Apple's image in the long run.

Analysts: Despite Hectic Weekend, Apple Won't Suffer

Arnie Berman, a chief technology strategist at Cowen and Company, said that while customers may be annoyed about the poor customer service this weekend, chances are they won't stay mad for long.

"When American or United Airlines delays or cancels my flight, I get annoyed – as do other customers," said Berman.

"Sometimes I swear to myself that I will fly some other carrier in the future," said Berman. "But I rarely follow through."

Like the anger felt by many travelers, Apple customers are likely to forgive and forget – especially with the added distraction of their new iPhone.

"At least for the moment, the Apple iPhone is a unique product, with few choices that have as compelling a feature set or ease of use characteristics as the iPhone," said Berman.

Despite threatening to abandon Apple, those customers who are especially irritated after this weekend's iPhone debacle are still likely to find the company's products hard to resist, agreed Avi Greengart, the research director for mobile devices at Current Analysis.

"If you stood in line for four hours and then got your iPhone and it didn't work, boy you were angry and frustrated, but within a few hours you probably got it working and then spent the weekend playing [with it]," said Greengart.

"There is still nothing like this on the market," added Greengart.

Where's the Damage Control?

While the problems customers encountered have since been resolved, neither Apple nor AT&T has apologized to customers.

Calls made to Apple were not immediately returned and the most recent statement on its Web site announces Sunday's sale of the one millionth 3G iPhone.

Jeremy Horwitz, tech analyst and editor in chief of iLounge, a site for iPod and iPhone information, told ABCNews.com that customers deserve some recognition for what they went through this weekend.

"The interesting thing here is that there hasn't been any damage control yet," said Horwitz.

"Apple and AT&T both knew exactly what they were getting themselves into by [encouraging] customers to form lines," said Horwitz. "But neither have apologized for putting people through a grueling and dissatisfying experience."

Horwitz said the decline in consumers' trust in Apple began during last year's iPhone launch and the events of this past weekend have only exacerbated the situation.

"This year everyone was waiting in line and everyone hated the experience," said Horwitz. "The real question here is if there is any benefit to being the first person to buy an Apple product when the price will drop and the experience of waiting in line is not enjoyable."

He added: "The experience of waiting in line doesn't leave one's memory, and may lead people to wonder if they should brave it the next time."