Opening weekend a blockbuster for iPhone

Tens of thousands of customers opening up their shiny, new iPhones during opening weekend experienced a different way to activate a wireless device-outside the store.
Instead, customers were pointed to Apple Inc.’s iTunes for activation, in a transaction that was powered by software vendor Synchronoss Technologies Inc. The company
announced today that it has signed a multi-year deal with AT&T Inc. to “support the launch and ongoing operational support” for the iPhone. Stephen Waldis, president and CEO of Synchronoss, called the unique iPhone activation process a paradigm shift.
Most analysts estimated the number of iPhones initially sold at around 500,000. Fewer than 2% of customers had troubles with activation, according to a source familiar with the situation. On various message boards, the most common complaints seemed related to slow porting of some numbers; trouble adding the phone to legacy AT&T plans; business customers being unable to activate their devices until they began a consumer account; and a few people having trouble transferring numbers from prepaid to postpaid accounts.
Waldis said that the volume of activations was “easily 10 to 15 times any kind of normal volume. It was really not close to anything that we’ve seen.” The heaviest activity came in the first half of the weekend as early adopters turned on their phones, he added. Asked about contributing factors to the activation problems, Waldis noted that porting relies on third parties and can sometimes involve delays, and said that other delays happened for a mishmash of reasons, including receiving incorrect or incomplete information from customers.
Overall, however, Waldis called the launch of the iPhone “probably the biggest retail consumer device [offering] in a 48-hour period. . The amount of fallout was so small. We were pleased to see that it was smaller than we had hoped.”
He said in retrospect that the only unexpected aspect of the activations was that Synchronoss had expected a bit of a time lag after the devices were sold, during which people presumably would travel home before activating the iPhone. Instead, he said, activations began almost immediately as people sat down in the stores with laptops and wireless cards and started the process.
At-home activations, Waldis said, could change telecom in the same way that ATMs and online banking have changed financial services. During the busy holiday season, he pointed out, a customer may particularly appreciate being able to buy a device in-store quickly and do the activation later.
Out-of-store activation processes might appeal to cable or other companies with a direct cost involved in sending a technician to a customer’s home, according to Fred Boxa, principal with Interactive Broadband Consulting Group L.L.C.
“I think device manufacturers would like it a great deal. I think that model is less desirable from the carrier perspective,” Boxa said, noting that non-store activations could reduce the number of additional services and products that a carrier might successfully sell during an in-store visit.
Boxa also said that the independent activation process sets Apple up to be able to sell iPhone regardless of carrier, once AT&T’s exclusive rights to the device are up.
However, whether other telecom or wireless companies will hop on the in-home activation bandwagon is questionable-as is and whether AT&T will alter the activation process for other devices.
iGR Inc. analyst Iain Gillott-who was among the unlucky 2%-said he hopes that at-home activations don’t become a trend.
“While [the industry] gets criticized for the way we activate phones, I think the way we activate phones has come about over the last 25 years and it’s the best way to do it, actually,” he said. He maintained that if he’d been able to activate the device in-store, “I would have been at the store an extra 10 minutes, but I would not have had all the problems that I had.” Gillott added that the huge number of variables in customers’ legacy plans make out-of-store activations tricky.
Verizon Wireless spokeswoman Brenda Raney noted that the carrier already has several activation options, including a hands-off, online activation option for customers who choose to buy via telesales or the Web.
However, she added, given the number of choices available with the typical phone purchase, the store experience becomes more important. “When you have a portfolio of 30 devices, which we do, people come into the store to touch the phone, to get the kind of service that helps them make good choices,” Raney said. “If you look at the new competitor, they don’t have a choice. . It’s one device with a given set of options that cannot be changed, and so there’s very little reason for a person to interact or decisions to make. It’s one size fits all. …When you have no choice, it’s very easy to order and activate.”
AT&T Mobility spokesman Mark Siegel said that the process “worked beautifully,” but was an exceptional situation.
“I think this is unique, just because of what the iPhone is all about,” said Siegel. “We and Apple agreed that because tens of millions of people already have iTunes accounts and are familiar with it, let’s activate the device this way. It certainly gave people the ability to activate at their convenience, in the comfort of their own homes, at their own pace, when they wanted to.”
However, he added, “it doesn’t mean that the way we do it for other devices is not at all helpful.”
“We wanted to do it this way for this device,” Siegel added. “What we do in the future remains to be seen.”