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iPhone supplies dip, increase; AT&T hoarding phones?

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By Charles Starrett

Contributing Editor
Published: Friday, July 6, 2007
News Categories: iPhone

Apple has begun restocking iPhones at its retail stores nationwide, following yesterday’s near sell-out of the device. Apple’s iPhone availability page showed sell outs at all but two of the company’s 164 retail stores yesterday, but today that figure has rebounded, with 44% of the stores reporting stock. The restocking, however, seems centered more on the East Coast and Midwest — stores on the West Coast remain sold out, from Washington to California. Many stores appear to be releasing their new inventory around noon, as several iLounge editors have succeeded at finding iPhones around noon at stores that were sold out in the morning.

Another iLounge editor had a surprising visit to an AT&T store, which may indicate unfair practices by the cellular giant. Our editor went in to see if they had any iPhones in stock, or had received a new shipment — to which an AT&T sales clerk responded with a resounding “no.” After taking our editor’s number in an effort to “call him when they come in,” the clerk noticed that he was a potential new customer, and proceeded to bring out two new 8GB iPhones, phones that he previously said were unavailable. The clerk then explained that the store was reserving iPhones for new customers only — the store in question had received around 20 units earlier in the day. It is unclear whether this practice is widespread throughout AT&T retail stores.

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Comments

1

I have been a long time Verizon customer, with no problems.  Although I just love the looks of this new phone, hearing things like this make me not want to sign a contract with them.  The verdict is still out on this one for me.  They just seem a little to “shady” for lack of a better word.  You shouldn’t be able to pick and choose who you want and do not want to sell a phone to…uhm…discrimination!

Posted by franticnomd on July 6, 2007 at 9:07 AM (PDT)

2

I work at a mall kn new jersey. Prior to the release of the iphone i was talking to an AT&T employee regarding the iphone and she told me that all the employees in the store, as well as other AT&T stores to the best of her knowledge, were instructed to sell only to new customers. This is, IMHO, an assanine practice by a greedy corporation.

Note: I am writing his via an iphone that I bought by waiting in line at an apple store.

Posted by snozle on July 6, 2007 at 9:36 AM (PDT)

3

If AT&T is similiar to companies in Canada then it’s not surprising.  In Canada dealers get paid far more for a new activation than replacing a customer’s old phone (several hundred dollars difference).  Because most of the profits go to the parent company and not to the individual dealerships (who mostly are not faceless companies but individuals who just own two or three stores and have rent to pay and kids to feed) with a phone that is going to sell out the dealers will hold back stock for new activations otherwise they won’t make money.

Unfortunately it’s the way the industry has structured itself, and it would be the same for T-Mobile, Verizon or any company which relies on expansion through dealer owned stores who exist solely on being able to sign up new customers.

So to say it’s “discrimination” or “greedy” is unfair.  It’s how they have to conduct business in order to stay open, pay their employees and so forth.

Posted by Jeffery Simpson on July 6, 2007 at 9:51 AM (PDT)

4

I’m with Cingular for years and my contract run out last year in may. I was waitng for the IPhone since then to come out, so I went by a month to month base with my cellphone.

Now I checked out the IPhone and I love it, even if THERE ARE some issues that needs to be resolved.

When I wnet to the local AT&T store, the rep wanted to get me a IPhone right away. I had no problems but I said no to them since i want to wait a bit.

Posted by Dennis on July 6, 2007 at 9:55 AM (PDT)

5

this practice goes on in the uk. o2 is actually the worst at treating their old customers like dirt and offering everything to new customers. but all of them do it some. most cool new handsets are reserved for new customers only.

please apple any other network than o2 in the uk… pretty please?

Posted by anon on July 6, 2007 at 9:57 AM (PDT)

6

@Jeffery Simpson

The iPhone is only available at AT&T company owned stores, no independent dealers are allowed to carry it.

Posted by Cool Cat on July 6, 2007 at 10:06 AM (PDT)

7

“You shouldn’t be able to pick and choose who you want and do not want to sell a phone to…uhm…discrimination!”

Also as a verizon customer myself, we should know best about phone discrimination, being stuck with all the crappy phones that verizon has while not being able to use all the other phones in the world.

Posted by Jon on July 6, 2007 at 10:24 AM (PDT)

8

that’s typical, “Let’s get a new customer and f the guy who’s been paying us every month for 9 yrs.”
I am an existing customer and I had no trouble getting one. Then again i’m in Louisiana not LA or NY.

Posted by achenator on July 6, 2007 at 10:31 AM (PDT)

9

Yeap, happened to me on Monday, 7/09/2007,. I live in Ormond Beach, FL, when I walked in AT&T store on this past Monday, Lady that works for AT&T told me they were sold out…as I started playing with a model of iPhone that they had for review, we have started talking. As I said to her that I was ‘thinking’ of switching from my current provider to their Network, she jumped in by saying ‘oh, my bad, I think we have ONE 8G model on the back, that we did not tell anyone about’ ...???To say that I was suprised would be an understatement. I thanked her and I walked out of the store…why not? If AT&T is going to treat their potential customers like this, hmm, I wonder how it is wher YOU ARE their customer.
MP>

Posted by MP on July 6, 2007 at 10:43 AM (PDT)

10

This practice will probably cease once iPhone supplies begin to level off after the initial craze. AT&T wants to make sure that people who are thinking of switching for the iPhone can get the iPhone. And, it’s not like you can’t get an iPhone—just order off Apple’s website.

Posted by Paul on July 6, 2007 at 10:48 AM (PDT)

11

Simple.  AT and T employees get commissions for new activations and none for new phones.

Posted by bob on July 6, 2007 at 10:50 AM (PDT)

12

I’m sure that that is ATT’s practice but let’s get real - that’s biz…join greenpeace if you don’t like it…if that was the only way to get one, it’s be criminal, but as said above, order off the apple website - shipping is free and I ordered on June 30th and have been sent a email that they would ship on 7/13…not bad, IMO…

Posted by gersly on July 6, 2007 at 11:36 AM (PDT)

13

This was true of the 8525 as well. Over on HowardForums many people reported phones suddenly being available when they said they were new customers. I hate retail mobile phone stores. I much rather deal with OLAM.

Posted by mrchet on July 6, 2007 at 1:16 PM (PDT)

14

Don’t you just buy the phone and then activate it yourself at home using itunes? That’s what I did, but then again I bought mine from the apple store.

My point is that does it really matter if you are a new or existing customer if you are going to activate your phone thru itunes?

Posted by Diddy on July 6, 2007 at 7:27 PM (PDT)

15

“The iPhone is only available at AT&T company owned stores, no independent dealers are allowed to carry it.”

Cool Cat:

If that’s the case then it doesn’t make any sense for AT&T to hold back the phones.  The reps might be doing it because they probably get paid the same way (much more for activating new customers) but AT&T makes the same amount of money off a new customer signing onto a contract as keeping an existing one.

Posted by Jeffery Simpson on July 6, 2007 at 8:41 PM (PDT)

16

FYI - Apple employee work on zero commission for a reason: better service.

Posted by John Grainger on July 6, 2007 at 9:35 PM (PDT)

17

Diddy:  Good point about the itunes activation.  I don’t know how the ATT employees get credited for the commissions.  Maybe they get credit when they do the “credit pre-approval” in the store?

John Grainger:  Your point certainly seems to be backed up by the real world experiences of many posters.

Posted by Bob on July 7, 2007 at 11:43 AM (PDT)

18

I can confirm this practice. I went in to an AT&T store looking for an iPhone today and was told right away by a rep that they were out. 30 seconds later another rep asked me if I would be a new customer. I said yes, and he checked in the back and magically found their “last 8GB iPhone”. It was, according to him, “behind another box”. Yeah right. I got it though!

Posted by StrikerObi in Tallahassee, FL on July 8, 2007 at 12:28 PM (PDT)

19

To be fair, some of those iPhones in the ATT stores may not be on sale because THEY ARE ALREADY SOLD.  Many of the ATT stores, when they ran out of stock, allowed customers to order the phone to be shipped to the store.

To give some of the exampled ATT stores the benefit of the doubt, some may have had some of those iPhones ordered in the aftermath of the original stock sellout, become available to new customers again, as the customers who ordered the ones dropped to the store picked up one as they trickled into the local Apple Store instead.

Posted by bud on July 8, 2007 at 2:39 PM (PDT)

20

I doubt it has anything to do with commissions folks. If AT&T can secure a NEW customer with the sale os a phone, it’s a safer bet. If you’re an existing client, they already have you, and are betting that you’ll wait for one to come in (I know it sucks). If there’s an opportunity to get a new contract sale because of the iPhone, and get you immediately it’s better business - slimy - but better from a business perspective.

Posted by Warren Piece on July 9, 2007 at 5:11 AM (PDT)

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