Apple, ATandT Snafus Marked iPhone 4 Preorder Debut

Apple and AT&T had the best and worst of weeks, when the iPhone 4's first day of pre-order availability resulted in sales of 600,000 units and the total meltdown of both companies' ordering systems. While the snafu raises serious questions about AT&T's ability to maintain its support for Apple, that sheer volume of sales bodes well for the iPhone 4's future. Apple faces more substantial competition in the smartphone space from the growing family of Google Android smartphones, including the Droid X, which will likely be revealed during a high-profile presentation in New York City on June 23.

It was a week of good news and bad news for Apple. The good news: some 600,000 customers pre-ordered its next-generation smartphone, the iPhone 4, on June 15. The bad news: that massive demand on the phone's first day of pre-order availability managed to crash both Apple's and AT&T's ordering systems. The iPhone 4 is slated for general release on June 24.

Reports circulated online of AT&T employees forced to jot customers' details on paper after store computers melted down. Visitors to Apple's Website encountered error messages. Twitter groaned under the weight of irate Tweets from potential iPhone customers: "AT&T is so incompetent they can't even take my money," is probably as good an example as any.

"It was the largest number of preorders Apple has ever taken in a single day and was far higher than we anticipated, resulting in many order and approval system malfunctions," read a June 16 statement on Apple's Website. "Many customers were turned away or abandoned the process in frustration. We apologize to everyone who encountered difficulties."

In comments to CNN, an AT&T spokesperson described June 15 as "the busiest online sales day in AT&T history," and added that customers who preordered in the afternoon or later would likely receive their device after June 25. Apple also indicated delays for the device, with a note on its Website suggesting that those pre-ordering now would need to wait until July 14 for their smartphone to ship.

The whole fracas, of course, raises questions about AT&T's ability to manage its responsibilities to Apple. "AT&T might be a fine carrier for its customers, but Apple should know by now that when AT&T says it will do something the right way, it typically fails," Don Reisinger wrote in a June 17 piece on eWEEK. "Although Apple and AT&T offered to take pre-orders for the iPhone 4, a source later claimed that AT&T never tested the system that it used to accept those orders, according to tech blog Gizmodo."

The iPhone 4 retails with a two-year contract for $199 for a 16GB version, and $299 for the 32GB version. Features include a front-facing camera for video conferencing and the new iOS4 operating system, previously dubbed "iPhone OS 4," which includes features such as multitasking.

During a keynote presentation June 7 at Apple's 2010 Worldwide Developers Conference, Apple CEO Steve Jobs referred to the iPhone 4 as "the biggest leap since the original iPhone," according to a live transcript of the event, adding: "This is beyond doubt one of the most precise, beautiful things we've ever done."

Even as Apple and AT&T experienced their pre-ordering issues, some of its future competition decided to make its presence known. On June 17, Verizon Wireless posted an image and a few details of the Motorola Droid X, its successor to 2009's popular Motorola Droid smartphone, on its flashily rendered Website. Executives from Verizon, Motorola and Google will introduce "the next generation of Droid" in New York on June 23, according to an invite sent to eWEEK, but it's unclear whether that unveiled device will be the Droid X, which features a 4.3-inch screen and reportedly runs Android 2.1, or another design.

That will be a day before the iPhone 4's general release, and will likely draw the inevitable comparisons between the two devices. Although Apple's early sales success with the iPhone 4 bodes well for the device's longer-term prospects, the rise of Android smartphones has many analysts expecting serious competition in the mobile arena over the next few years.