US braces itself for iPhone sell-out

With a little over two weeks until the iPhone hits US store shelves, Apple and AT&T (the sole US carrier) retail sales representatives say they are preparing for a quick sellout and huge crowds on the 29 June.

As of Wednesday, clerks at Apple and AT&T stores in New York said they didn't know how many phones they would be getting for the big launch. Some blogs have speculated the number might be as few as 40 devices per store.

One sales representative from the AT&T store in Times Square, who wished not to be named, said that number was likely to be on the low side, especially for stores in big cities like New York. He said the AT&T Times Square store received 20 devices for the recent launch of Research In Motion's Blackberry Curve. The store quickly sold out of those phones and received another shipment of about 100 Blackberry Curves the following day.

Sales representatives also said they are expecting big crowds for the launch, many of whom are likely to camp out overnight in front of stores to make sure they are one of the first to get the new phone.

"If I were you, I'd probably try going to some little store in New Jersey that nobody knows about," the Times Square representative said.

Even Steve Jobs, Apple's chief executive, suggested to technology pundit Arianna Huffington that she go to an AT&T store where lines might be shorter than at Apple's stores.

The iPhone, announced in January, will be sold on AT&T's and Apple's Web sites, as well as at AT&T's roughly 2,000 retail locations and in nearly 200 Apple stores around the country -- neither company is accepting pre-orders. The phones come in two versions: a 4GB model for $499 and an 8GB version for $599.

Charles Golvin, an analyst with Forrester Research, said he agrees there is likely to be an initial frenzy for the phone, especially from Apple enthusiasts.

"There's no question there will be high demand for the iPhone, at least initially," he said. "People buy new versions of the Mac operating system in droves when it comes out. You don't see that kind of demand when Microsoft launches a new version of Vista."

Indeed, Apple fans are known for lining up early. Last year, when Apple's second retail store in Manhattan opened on Fifth Avenue, people camped out overnight just to be first in line. Many of the people who braved the wind and rain to stand in line didn't even plan on buying any products once they got inside the new store. They were simply there to be a part of the event.

Rumours have been floating around recently that Apple is planning to create a temporary shortage of the iPhone to keep demand high. A spokeswoman from the company wouldn't comment on these rumours, but she said that Apple is glad that customers are getting excited about the product.

Excited might be an understatement, considering that AT&T's new chief executive Randall Stephenson said in March that the company had already received more than 1 million enquiries on its Web site for the device. A sales representative at an AT&T store in Manhattan on Fifth Avenue said on Wednesday that the store is receiving more than 100 phone calls per day, and at least another 100 enquiries from people who have walked into the store asking how they can get their hands on an iPhone.

Apple expects to sell 10 million iPhones by the end of 2008. Golvin said this is an achievable goal, especially if Apple starts offering the phone internationally. (The iPhone is expected to launch in Europe in late 2007, while Asia will have to wait until 2008.) He predicts sales of the iPhone will come in waves. Early sales are likely to come from hardcore Apple enthusiasts, but there is also likely to be a second wave consisting of people who will wait to read product reviews or wait until their current mobile contracts expire, he said.