Apple Apologizes (to Investors) for iPhone Activation Woes

Apple and AT&T blew a great opportunity to capitalize on their activation hiccups with a well-planned promotional upsell program, but instead Apple's investors get the apology.

Four weeks later, my simmering anger that stemmed from my rocky start with the iPhone has largely been replaced with a general sense of satisfaction as Apple's "revolutionary phone" has morphed into a fairly important component of my day-to-day operations.

However, that anger was reignited as I read about Apple and AT&T's financial reports over the last couple days.

Apple's end of quarter reports estimate approximately 270,000 iPhones were sold on June 29th and 30th, but AT&T estimates that only 146,000 iPhones were actually activated on those days. This 46 percent disconnect between the two numbers could certainly be partially explained by prospectors looking to resell iPhones on the open market, but I think it also shows that AT&T was sandbagging their estimates of troubled customers.

At the height of the activation problems, reports indicated that only 2 percent of iPhone customers were experiencing activation delays but I suspect the real number of troubled users was significantly higher, and these quarterly estimates are the proof.

Undoubtedly, the activation problems were resolved for most customers within the first couple days of the new quarter and I expect we will see the balance restored in next quarter's results, but the saga underscores how both Apple and AT&T failed to say the right things to customers or even turn it around into an opportunity.

Either company could have engendered some good will with a marketing promotion disguised as an apology. Apple could have offered a free month of .mac service to lure more customers, or they could have provided a 25 percent off coupon for one iPhone accessory from the Apple store. AT&T could have offered one free month of the 1500 SMS message plan. People could have been enticed to sample more services, or buy more gear, and likely spend more than they intended by failing to cancel the service after the free trial or buying an extra headset to go with that new case.

Instead, in the wake of the activation tribulations, I for one have heard nothing from either company, even when I complained frequently during the satisfaction survey they sent out days after my activation was finally consummated. Until, yesterday that is.

According to the San Francisco Chronicle story covering Apple's financial reports, Apple CFO Peter Oppenheimer acknowledged that some people had activation problems and said, "We would like to apologize to customers who had a less-than-perfect experience."

Way to treat your customers, guys. A second hand apology that few of your customers will ever hear. Intended for your customers, you have instead apologized to your investors.

At least we are left with little illusion where your priorities are.

In other news, I took a little heat from a few readers for calling iTunes a bloated pig in a previous post. Well guys, I stand by that assessment.

I finally caved in and installed iTunes on my work system, for the sole reason of syncing my calendar to the iPhone. I sync everything else at home. So, this sync application, which ONLY has to update my calendar, has four running processes that use about 75MB of RAM under normal circumstances.

That, my friends, is a bloated pig.