AT&T's IPhone Stock Is Mostly Sold; Apple Has Supply

AT&T's IPhone Stock Is Mostly Sold; Apple Has Supply

July 13 (Bloomberg) -- AT&T Inc. stores have mostly emptied out of inventory of Apple Inc.'s new iPhone in the U.S. two days after thousands lined up to buy the handset.

Apple, seeking to widen its business beyond iPod media players and Macintosh computers, said it still had iPhone models in most of its own shops to sell today. The Cupertino, California-based company, which has 187 stores in 38 states, is selling it for as little as $199.

The iPhone 3G, which works with speedier third-generation phone networks, went on sale July 11 in the U.S. and 21 other countries. Apple's partners in the U.K., Germany, Canada and Japan said many shops ran out on the first day. AT&T, Apple's exclusive U.S. partner, said most of its 2,000 stores were out of supplies and that it expected new inventory within days.

``The Apple retail store likely has your iPhone 3G in stock,'' Apple told visitors on its Web site. ``Shipments of iPhone 3G arrive most days.''

Apple was out of all three models in 55 stores, according to a tally posted on its Web site last night. That includes outlets in Fresno, California; Victor, New York; Cherry Hill, New Jersey; Madison, Wisconsin; and Knoxville, Tennessee. Apple's lone stores in Indiana, Iowa, Nebraska, New Mexico and Rhode Island were out of supplies, leaving buyers there with no iPhones to buy today.

Shoppers seem to prefer the black, 16-gigabyte model, which sells for $299, based on Apple's tally. The company is also selling a 16-gigabyte model in white. The 8-gigabyte handset, priced at $199, is only available in black, according to Apple's site. Customers must sign up for a two-year contract with AT&T at the time of purchase.

New York Supply

The New York store on Fifth Avenue, the only shop that is open 24 hours a day, seven days a week, said it will have the Web-surfing handset available. So will Apple's other New York City stores in SoHo and on West 14th Street.

Customers shopping at the Fifth Avenue store between 3 a.m. and 7 a.m. were unable to buy the phone. AT&T says it routinely does maintenance on its computers during that time, preventing users from signing up for service. The company is ``working on a solution to enable sales to still occur during this window,'' said AT&T spokesman Michael Coe. ``We apologize for any inconvenience this may have caused for our customers.''

Apple said it will update its retail availability list each evening at 9 p.m. San Francisco time.

Waiting in Line

AT&T and online Apple fan sites said on the first day that some customers left stores without a working phone because of problems linking the device to Apple's iTunes service, the last step in the activation process. AT&T told buyers to link to iTunes from home. Apple spokesman Steve Dowling declined to comment.

At the SoHo store, manager Khalil Smith said there weren't any problems with activation yesterday morning. ``Things have been going really smoothly, and people are really happy,'' he said.

Lines snaked around the block in New York, with about 50 customers taking their places by 7:30 a.m. yesterday, said Matthew Gurgel.

``Every half-hour we move a little bit,'' said Magda Buccek, 21, of Brooklyn, who said she had thought the line would move more quickly.

Regine Klosebriganti of New York, 24, went to the Fifth Avenue Apple store at 1 a.m. and was told the line was closed. ``It was a mob scene,'' she said. ``They said I could come back at 3 a.m. This is nothing compared to what they had there.''

``If you're selling a product of convenience, why do you put your customers through inconvenience?'' said Chad Stoller, 37, who left the line at the SoHo store, saying it wasn't worth the wait. He said he had expected the line to be much shorter, anticipating that activation issues from the first day would deter people from buying the iPhone 3G.

Apple fell $4.05 to $172.58 July 11 in Nasdaq Stock Market trading. Dallas-based AT&T dropped 19 cents to $32.58.

BLOOMBERG