Report: 3G iPhone activation issues could have been avoided

AT&T Mobility’s decision to take Synchronoss out of the Apple Inc. iPhone-activation loop contributed to last week’s debacle at Apple and AT&T Mobility stores, according to ThinkPanmure L.L.C.
Apple last year employed New Jersey-based Synchronoss to handle activations for iPhone purchasers who chose to activate the device at home, but an increasing number of “lost” handsets – phones that were sold but never activated on AT&T Mobility’s network – prompted Apple and AT&T Mobility to institute a new procedure that required all handsets to be activated in retail stores.
That move not only left Synchronoss out of the equation, it made for “the most ridiculous, inconvenient, and ineffective process,” ThinkPanmure’s Eric Kainer said in a research note sent to investors last Thursday – the day before the meltdown that led to Friday’s snafuthat saw customers wait hours to activate their 3G iPhones.
“In our view, AT&T was recently seeing nearly two-thirds of the iPhones it sold never activating on its network, believing they were activated on foreign networks, especially where iPhones were unavailable,” Kainer noted. “At signup in AT&T stores, subscribers will negotiate the standard retail activation process, slightly expanded given the more complicated features with an iPhone. We believe the process will take at least as long as AT&T’s estimate of 10-12 minutes per phone.”
The lengthy activation time was exacerbated, apparently, when demand overwhelmed Apple’s servers Friday. An AT&T Mobility spokesman said the problem stemmed from an inability to synch phones to Apple’s iTunes; Apple representatives have yet to respond to requests for comment from RCR Wireless News or to offer an explanation for the debacle.
Apple would have been better served, Kainer opined, by using in-store terminals to activate phones or by allowing in-home activations.