Apple Faces Mixed iPhone Reception in Europe

Americans waited for hours - and even days - to get a first-run iPhone. But in Europe, the reception was less enthusiastic. The iPhone debuted on Friday in both the UK and Germany, though interest fell short of expectations. "The days preceding the launch had been filled with pages of coverage from posh papers and broadsheets alike," declared Andrew Orlowski of the UK-based Register. "But now it looks as if a tight-knit group of media and PR people got caught in a feedback loop."

British early-adopters aggregated most heavily around Apple stores, leaving spotty traffic for Carphone Warehouse and O2 outlets. "There was a security guard and a guy at the door handing out numbers for the queue," said buyer "Steve" in comments to mobile blog dialaphone.co.uk, describing an 02 location. "Both looked bored to tears." The iPhone was released in Britain at 6:02 pm GMT, a clever timing pushed by exclusive partner O2.

In Germany, the story was also mixed. Exclusive carrier T-Mobile offered an initial sales tally of 10,000, and like its British counterpart, consumer interest varied greatly store-to-store. Reuters reported a "throng" outside a Deutsche Telekom store in Cologne, but almost total indifference in Frankfurt.

Link to Digital Music News Article

270K iPhones sold in two days, 146K activated

AT&T said 146,000 subscribers bought the iPhone in the second quarter, while Apple reported that it sold 270,000 iPhones, which generated $5 million in revenues. Why the discrepancy? AT&T only counts activations, while Apple counted total units sold. At any rate, the figures are impressive for just a day-and-a-half of retail availability in the second quarter. iPhone was released on June 29 and the quarter ended June 30.

Apple also announced its plans for the EDGE/WiFi device outside of the U.S. Executives said during the company's earnings calls that the device would be launched in a few major countries in Europe before the end of September. By that time, Apple expects to sell one million units between sales in the United States and Europe. Company executives said that, in contrast, it took seven quarters to sell one million iPods. The company said it expects to launch the device in Asian markets during 2008.

But the company didn't answer one major question on everyone's minds: When will we see a 3G iPhone?

For more about iPhone sales:

- and read this transcript of the Apple conference call

Link to the FierceWireless Article

AT&T nets 1.5M subscribers in Q2

AT&T's wireless unit has posted its second quarter results, which include a net gain of 1.5 million wireless subscribers (partially thanks to the iPhone) to reach 63.7 million. "Mobility is a major growth engine for AT&T," AT&T CEO Randall Stephenson said. "Our launch with Apple of the breakthrough iPhone has quickly redefined customer expectations for their wireless experience, initial response was unprecedented, and sales in July continue to be strong. On June 29, we also announced an agreement to acquire Dobson Communications, which will further expand our wireless coverage in key rural and suburban areas." Here are some other key metrics from the quarter:

• The June 29 iPhone launch allowed for less than two days of sales and activations before the end of the quarter, but AT&T activated 146,000 iPhone subscribers during those two days.
• Total service ARPU in the second quarter was $50.63, up 3.6 percent.
• Total churn, including prepaid and reseller results, was 1.6 percent, down from 1.7 percent in the year-earlier quarter.
  

For more on AT&T's Q2:
- read this press release

Link to the FierceWireless Article

iPhone's Network Hang-Up

Apple's decision about its exclusive arrangement and network says plenty about the confusing state of the U.S. wireless industry

by Stephen H. Wildstrom

In the glowing reviews that have greeted Apple's iPhone, two questions keep coming up. Why did Apple (AAPL) sign a long-term exclusive arrangement with AT&T, which gets low marks in customer service from both Consumers Union and J.D. Power & Associates (MHP), BusinessWeek's sister company? And why did Apple choose AT&T's (T) relatively slow EDGE network rather than the much faster Mobile Broadband, a third-generation (3G) service fast enough for snappy Web page downloads and smooth video streaming?

Apple isn't talking, but the decisions aren't as mysterious as they might appear. And they say a lot about the confused and confusing state of the U.S. wireless industry.

In designing the iPhone, Apple had to make a fundamental choice between the two different technology camps into which U.S. wireless service is divided. AT&T and T-Mobile use a European-developed standard called GSM. Verizon Wireless and Sprint rely on Qualcomm's (QCOM) CDMA technology. (Sprint's Nextel (S) unit uses an oddball technology all its own.)

Why Not Verizon?

Because of its pervasive coverage in the Northeast and California, Verizon (VZ) would have been a logical partner, but Verizon officials have told me they would never give any handset maker the kind of authority over hardware and software design Apple demanded from AT&T. Besides, from a global perspective, Apple's choice of GSM was a no-brainer. GSM is the standard throughout Europe and nearly everywhere in Asia. The GSM iPhone could eventually be sold in nearly all major countries.

Apple says it decided to ignore AT&T's Mobile Broadband because 3G networks draw more power, making it harder to hit iPhone's ambitious battery-life goals. This explanation is not entirely convincing, since Wi-Fi, the iPhone's high-speed option, also is a notorious power hog. I suspect Apple was worried about the dismal state of 3G service on GSM networks in the U.S.

The fact is, AT&T's 3G service lags far behind its CDMA competitors. The technology used by Verizon and Sprint is capable of sustained downloads of 1 megabit per second, although the actual wireless speed varies greatly with the strength of the signal and the number of users competing for the bandwidth. AT&T's speediest service runs about half as fast, although still three to four times faster than its EDGE network.

Not Easy Choices

Coverage is an even bigger issue. Consider the most densely populated part of the U.S., the coastal plain from Washington to Boston. AT&T's coverage maps show big gaps in 3G service in Maryland, New York's Westchester County, and most of Long Island and Connecticut. Sprint and Verizon show 3G coverage along all the major transportation routes of the Northeast corridor. T-Mobile, the other big GSM carrier, has not yet turned on a 3G network.

Apple has designed the iPhone to be improved through software updates, but software can do only so much. In order to get true 3G service, you're eventually going to need a different phone with a new radio. This redesign will happen, but it's not clear when U.S. users will get their hands on it. In Europe, which has ubiquitous and underutilized 3G coverage, carriers are clamoring for a 3G iPhone, and Apple will probably introduce one before the end of the year.

Given the muddled state of 3G networks in the U.S., Apple's decision to go with slower technology in the first edition of the iPhone was understandable. But right now we are stuck having to choose between the iPhone, with a good browser and a painful network, and rivals such as the Palm Treo 700p (PALM) from Verizon or the HTC Mogul from Sprint, with fast networks and lousy browsers. Apple and AT&T have their work cut out for them.

Link to BusinessWeek Article

JP Morgan Backtracks Following iPhone Nano Report

A cheaper, iPhone nano may not be in the cards after all, according to an unexpected contradiction emerging from JP Morgan. Earlier this week, JP Morgan analyst Kevin Chang, based in Taiwan, posited that the cheaper phone would emerge in the fourth quarter. The scaled-down model could resemble the form factor of the diminutive iPod nano, according to the analyst. Chen based his assertions on patent filings and information gleaned from suppliers, though US-based analyst Bill Shope has now offered a different take. "We believe a near-term launch would be unusual and highly risky," Shope said. "It took Apple over two years to launch its first low-end iPod."

The confusion reflects poorly on JP Morgan, and raises questions about the insights offered by the securities firm. It also highlights the relative inaccuracy that often characterizes iPod - and now iPhone - predictions, a tendency fueled by a notoriously tight-lipped Apple. In classic form, Apple refused to comment on the latest speculations, though the conflicting predictions only heighten anticipation ahead of the next big thing - whatever that may be. Meanwhile, the Chang comments pushed Apple shares past a 52-week high during Tuesday trading, part of a continued ascent on Wall Street.

Link to Digital Music News Article

Future iPhone, iPod Model Predictions Proliferate

Less than two weeks after the release of the iPhone, analysts are already constructing opinions about future generation models. The conjecture includes both iPods and iPhones, two handhelds that are now intricately linked. Just recently, JP Morgan analyst Kevin Chen pointed to the launch of a more diminutive iPhone nano, one that offers a simplified take on the first-generation model. The mobile nano would include a scroll wheel, and court a more budget-conscious buyer. Chen, who backed his claims with detailed patent filings and discussions with Apple suppliers, predicted a release of the device during the fourth quarter.

Elsewhere, Piper Jaffray analyst Gene Munster noted that an upcoming line of iPods will resemble the iPhone, and incorporate aspects like touch-screen controls and an on-deck OS. "We believe the iPhone reveals much of what the iPod will soon be," Munster stated. The introduction of newer iPods and iPhones could push holiday buying into a fresh stratosphere, especially given the mid-year hysteria already established by Apple. Meanwhile, Apple is likely to carefully consider issues of cannibalism in its product roadmap, though the high-priced iPhone leaves plenty of room for product diversification.

Link to Digital Music News Article

The World's Longest iPhone Review

From Gizmodo, lengthy but useful if you want to know everything without spending $$$
http://gizmodo.com/gadgets/apple/no-bs-iphone-review-276116.php