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Fri, 11 Jul 2008 O2 on iPhone: Huge demand, no 16GB, yes there's problems

40 iPhones sold an hour in some O2 stores, no 16GB models left at all

Jonny Evans

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An O2 spokesman has attempted to offer what little explanation it can at the activation problems iPhone users are facing - but Apple has so far failed to comment on the situation.

Problems are plaguing iPhone 3G customers and those equipped with older models who are trying to upgrade to iPhone 2.0 software. When trying to complete the authorisation or upgrade process, the operation locks and iTunes offers an error message.

The result leaves iPhone owners frustrated, and means their devices will do nothing at all, bar making emergency calls.

This is how the system works (as explained by O2).

1. You sign up to an O2 contract in store. The device remains bricked.

2. You plug the device into iTunes and it unbricks the device

3. Your SIM card activates on the network. For new customers only there may be a delay in this happening as O2 processes the orders which means customers can use the iPhone but not phone features until SIM is active. Upgrading customers just put their old SIM in and they're away.

O2's spokesman urged patience: "Demand is really high," he said. "In some of our stores we have been selling 40 iPhones an hour - the same level of sales those stores usually do in a day."

Speaking to Forbes, a spokesman for AT&T has described a global problem with Apple's iTunes servers. It appears that with iPhone shoppers in 22 countries now trying to activate their device, Apple's iTunes servers just can't keep up.

Despite the many problems that have plagued the launch, O2 has seen some success, at least in terms of sales. "Half our stores are out of iPhones," the spokesman said, "and we're completely sold out of the 16GB models".

New stock will be made available through O2 next week, availability will be revealed on the O2 Web site.

On the chaotic scenes and in-store problems that defined the first few hours of iPhone sales this morning, he said: "From our point of view - things were slow when we opened this morning, but we have been processing people, we've been selling a lot," he said.

"All we can say to customers is keep trying," he said.

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