Tech Check

Apple iPhone: Let The Hype Die Down

Apple Inc.'s   iPhone is celebrating its first complete weekend on store shelves and early reports suggest blockbuster sales.

Piper Jaffray is out with a report saying that Apple and AT&T   sold a staggering 500,000 iPhones in 48 hours. Both Piper and Global Crown Capital say AT&T stores sold out of their inventory by Saturday afternoon, and a quick check of Apple's Web site this morning to gauge availability shows it's spotty at best at so many retailers. Only two stores in California, both in San Francisco, show availability of any kind. And Piper says 16% of Apple stores have sold out. Further, it looks like a three or four week lag time if you're gonna order an iPhone on the Web.

Some other key data points to consider; according to Piper: 95% of iPhones bought were the higher-capacity, higher-margin 8-gig model. So even though a store might be showing availability, it might only be stocking the 4-gig model. About 52% of the 253 people Piper talked to say they were new customers to AT&T; 35% of respondents say they used to be Motorola  customers, while 13% said they were former Palm users. Same goes for Nokia . Only 6% say they came from the BlackBerry world.

"We think that they have over a million units in total inventory between AT&T and Apple stores," says Piper's Gene Munster. "16% of the stores are sold out. So the numbers seem very high. Half a million units? We think that is what they did and ultimately we think this is a sign of the product off to a good start."

By any stretch, the weekend was a crazy one. We had crews in Palo Alto and San Francisco. In Palo Alto, it was a mob scene. Order quickly gave way to pushing and shoving, and that was just among us in the media standing by the front door trying to get the magic shot of the first shopper to score the gizmo. In this case, it was Patrick Scoble, a 13-year-old from Petaluma, California who had been waiting more than 24 hours with his dad Robert (who actually scored the front page of the San Jose Mercury News on Saturday morning. Sorry Patrick.) Patrick came out, shouted a big "Great!" and went on his way, his quarry in hand. More on him in just a second.

Soon after the first round of shoppers went inside, Apple let the media in. We got in, started to shoot the frenzy, cash on the counter, beaming, giddy shoppers, some with sleeping babies strapped to their chests. Others just happy to be in the air-conditioned shop. All of them excited to plunk down their $600 for an iPhone to call their own.

And then, something magical. A whisper moved through the crowd. From the front of the store, to the back and then back to the front. Was it true? Could it be? Indeed! A baseball-capped, flannel-shirt-around-the-waist-clad Steve Jobs and wife Laurene stopped by to visit with Apple customers and some former Apple employees, including legends Andy Hertzfeld and Bill Atkinson, members of the original Mac team. The store is just blocks from Jobs' home and he walked over.

I started to make my way toward Jobs and was cornered by some overly privacy conscious Apple PR reps. "You're not going to ask any questions, are you," I was grilled. "You're kidding, right?" I asked? "No questions," I was told. "He's not here for you. He's here for them," said the PR rep, pointing to the customers. Fine, I said. I just need some video of him here. "Put the mic away," I was ordered. "I need it to pick up sound. I won't ask any questions, we just want to listen in." "No. Back away, Jim. I'm serious. Here, just gimme the mic. Give it to me." Wow, you're kidding me. It was surreal. We'd been out there for better than 30 hours the last two days. A couple of dozen reports. There were satellite trucks and microwave vans, at least 750 people, not to mention hoards of still-photographers and print reporters and Web-casters. So, Jobs walks into this massive news event and has his handlers circle their wagons around him to make sure he wasn't part of any news event! Huh?!? "Jim, this shouldn't surprise you. You know how we operate." Uh, yeah.

Worse still? As Jobs and his wife sauntered by the crowd, Patrick's dad asked Jobs if he could stop and take a picture with his son, the first to get his hands on the iPhone at Jobs' home store. "My son was first in line, can you just get a picture with him?" asked dad Robert. "Nah, thanks, but thank you," Jobs said, over his shoulder, without even stopping. Just weird. Why bother showing up. It could have been a PR triumph. The company that brought the PC to the "rest of us," the company that's trying to revolutionize one of the world's most ubiquitous consumer gadgets, the company that could've embraced the moment, instead took a strange turn hiding behind its own elitism. It just felt weird.

I get the rock-star status of Steve Jobs. I do. But if you're gonna show up to an event like this, come with some seasoned security, choreograph it right and make it work to your advantage. Instead, it just came off awkward. And unfortunate.

But in the end, the Jobs visit was a blip on the screen. The stars of this drama were the people. Not even the iPhones, but the fans who snapped them up. They kissed their boxes, did push-ups ala Jack Parlance at the Academy Awards, mugged for the cameras, cheered, laughed, celebrated. This was an event; a cool place to be.

David Smiddy in San Francisco told us: "This is Apple moving into the smaller platform computing devices, so it is moving out from servers and personal computers and laptops into handheld devices that are also powerful and easy to use and enjoyable to use as well."

Leah Culber came bounding out of the Palo Alto store, and told me: "I am going to call up all my friends and say I am calling you from an iPhone."

A woman who didn't want to be identified said, "I have really high expectations. To be honest, it has really exceeded my expectations. I plugged it into my computer and was able to activate a phone plan immediately."

Of course, we've gotten tons of emails and voice-mails suggesting otherwise, that the activation process has been a nightmare. Nothing definitive as far as hard and fast numbers are concerned, so take all of these testimonials, good and bad, as more anecdotal than substantive. But it gives you a sense of what people were saying when we were out and about.

Heather Courtney showed off her iPop, a kind of Jack-in-the-Box featuring an eerily, dead-on puppet of Steve Jobs, who pops from the box to the Beatles tune "Here Comes the Sun." This is one you gotta see to believe, and you can at Heather's Web site: Very funny. She's actually enjoying another round of her 15 minutes of fame: one of her creations was featured on "The Ellen DeGeneres Show" last year.

Why Steve Jobs? Because she's an Apple fanatic, and thoroughly excited about the iPhone. "It's revolutionary, it's the latest Apple gadget, you have to have it," she tells me.

So let the hype begin to die down; let the phone get into the hands of millions. Let the bloggers begin to report their experiences. We know it looks cool; we know it seems cool. Now the proof will come from the marketplace when we get meaningful feedback from the people who should know whether this is a success or not. Not me. Not even Mossberg. Pogue. Levy. Nope, we'll start to get the feedback from the true experts who matter. You.

Questions?  Comments?