Apple, AT&T Systems Overwhelmed by IPhone 4 Demand

Apple Inc. and AT&T Inc., which began taking preorders for a new version of the iPhone today, are struggling to handle demand at their retail and online outlets, according to customers and store representatives.

At Apple stores in San Francisco and New York, the staff recommended that customers try ordering the device from Apple’s website later today or tomorrow. Some calls to Apple’s customer- service line also aren’t getting through because of high volume.

Apple Chief Executive Officer Steve Jobs unveiled the fourth-generation iPhone earlier this month, showing off a thinner smartphone with a sharper screen that can make video calls. The iPhone has become Apple’s top-selling product, accounting for 40 percent of revenue last quarter.

“We expect presale activity to be very strong for the new iPhone,” Ben Reitzes, an analyst at Barclays Capital in New York, said in a report today. He expects the company to sell 8.1 million iPhones in the quarter ending June 26.

The iPhone 4, which starts at $199, goes on sale in the U.S. on June 24. That price requires a two-year service contract with AT&T, the device’s exclusive carrier in the U.S.

Apple, which will offer both black and white models of the new handset, said today that customers can’t preorder the white version. It also won’t be available in stores on June 24.

Photographer: David Paul Morris/Bloomberg

Apple Inc.'s iPhone 4. Close

Apple Inc.'s iPhone 4.

Close
Open
Photographer: David Paul Morris/Bloomberg

Apple Inc.'s iPhone 4.

Black Only

“At launch, we have the black models available for purchase and we will be adding the white models as quickly as we can,” said Natalie Harrison, a spokeswoman for the Cupertino, California-based company. “There is tremendous excitement for the new iPhone 4, and we are working to get as many of them into the hands of customers as possible.”

Mark Siegel, a spokesman for Dallas-based AT&T, declined to comment.

Shoppers trying to preorder the phone are having trouble completing transactions online and are experiencing long waits at some stores, according to customer reports on AppleInsider.com, Engadget.com and Gizmodo.com.

The iPhone 4 comes to market as Apple faces mounting competition from Google Inc., whose Android mobile-operating software runs handsets from HTC Corp. and Motorola Inc.

Apple rose $5.41 to $259.69 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have advanced 23 percent this year.

To contact the reporters on this story: Connie Guglielmo in San Francisco at cguglielmo1@bloomberg.net

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