Last Fridays roll out of the iPhone 3g was one of the biggest blunders in tech history.

Apple now wants you to buy the new iPhone 3g at retail so they can activate your product but more importantly they lock you into your phone contract (where all the real revenue is).

So this on-site Activation is really a man made road block.

This simple activation process collapsed on Friday under the sheer weight of activation activity. This left people with either brand new iPhones that would not work (activation failed).

Worse still their existing 1^st generation iPhone’s were temporarily “bricked” because it could not re-activate due to the activation servers being offline while they tried to upgrade to the free iPhone 2.0 Update.

Apple need to realise the iPhone isn’t a toy, it’s a phone and when thousands of customers can’t use their phones they are frankly unhappy.

Likewise if you just bought a new iPhone that’s going to cost you £600+ and you can’t use it. It must be very frustrating.

So what went wrong?

First let’s look at some numbers.

iPhone 1.0 customers = 20m+ and of those interested in a Day1 upgrade to the free iPhone 2.0 Upgrade is placed at about 6m.

The iPod Touch was eligible for a paid upgrade to the 2.0 Software upgrade.

I can’t see any numbers for touch users so let’s conservatively call it 500,000 users.

Finally the new iPhone 3g users, it 1m (the original iPhone did 128,000 first day sales) but the iPhone 3g was launched internationally.

So a minimum of 7.5m people intent on getting activated on the 2.0 software.

Note you need the 2.0 Update to download Apps to your Apple device (iPhone 1.0 or iPod Touch).

That’s a big number but Apple is in the content distribution business they can handle it.

On paper yes they can, they delivery an unimaginable amount of data via iTunes every day. But they made one mistake they forgot about the wisdom of a 6m+ crowd looking for a free upgrade.

The real problem started on Thursday. They seeded the App Store in iTunes.Don’t underestimate a bored iPhone user looking for some distraction. From that moment the iPhone 1.0/iPod Touch users start on mass upgrading to iTunes 7.7 and pressing the “check for update” looking for the illusive and in most cases free 2.0 update.

Now its human nature for people to keep pressing buttons in this case check for update if they think something’s going to happen imminently but doesn’t.

So the check for update crowd starts swarming from 5pm on Thursday as news travels around the Internet the App store is live.

If the App Store is live I must be missing something where is my 2.0 update, check for update.

And so on.

By the time the iPhone 3g launches 12/16 hours later millions of people are frantically pressing the check for update. This puts the Activation infrastructure under strain as installing the 2.0 Update requires Re-Activation.

Apple eventually seed the 2.0 update and people start downloading, but the sheer force of the numbers overload the activation servers. So people could download the 2.0 update but not activate leaving them in limbo without a working iPhone.

So those poor people standing in line for an iPhone 3g may be able to get one but had no way of activating or using it.

So one of the largest ever tech roll out’s fails miserably with some really upset customers.

Free Advice for Apple

Don’t roll out internationally if you can’t handle it.

Stagger the roll out. The 2.0 upgrade could have come out either a week before or after the iPhone 3g launch. The person who decided to globally launch 2.0 in one movement made a BIG mistake.

Update: This seems to work for some but not others. See the comments.

If you are having difficulty installing this update try temporarily disabling any Anti-Virus or Spyware software.

In my particular case I use Nod32 and after the Software downloaded the 222mb file it would fail with the error pictured above.

After I disabled Nod32 my Anti-Virus product (you can do this from the taskbar) my installation completed successfully.

Remember to re-enable your Anti-Virus or Spyware software once you have completed the upgrade.

He goes into this topic around 2:20 of the clip below.

Now you can imagine the problems having a phone with a non removable battery that doesn’t last a full day. You end up with no form of communication.

All that GPS, 3g, Google Maps, Visual Voicemail go out the window if the device doesn’t have the juice to turn on.

In the keynote for the iPhone 3g Steve Jobs took great pleasure in announcing “better battery life”.

Can you imagine a keynote where the claims were a bit more realistic.

Hi, I’m Steve Jobs

This is the iPhone 3g, we think its cool, we think you going to love it, isn’t this just amazing, look at that screen its gorgeous, but if you plan on using it all day the battery probably wont last. 

Anyway watch Walt’s review which is generally positive but he does point out the fact its more expensive to own than 1st generation iPhone.

Link: http://ptech.allthingsd.com/20080708/newer-faster-cheaper-iphone-3g/

I love gadgets and I do like to get a new phone every year.

However it hasn’t gone unnoticed at DiPonio central the cost of everyday essentials are going through the roof.

With the hype surrounding this weeks launch of the iPhone 3g. I wonder how many people have figured out the total cost of ownership.

There are other issues like do you actually have 3g coverage where you live/work. I have had a 3g enabled phone for about 3 years and I wonder if this 3g dream people are expecting of being permanently connected is actually going to work out.

The other sexy phone on the market is the HTC Touch Diamond

I could pick one up for £433 inc VAT and just pop in my SIM card.

So when compared to the cost of the iPhone the HTC Touch is much more affordable.

However lets be honest the HTC Diamond is just another Windows Mobile device with a shiny face. It doesn’t help that it has a User Interface running on top of a User Interface.

I don’t want to give the impression that I don’t want either device but at £639 or £433 respectively I think I am going to pass.

My current HTC Touch is small, light, has good battery life and most importantly I already own it.

Sounds like a simple question…

With the original iPhone you could purchase from either Apple (online or at a retail store) or from O2 or Carphone Warehouse.

The problem with that business model was people bought at retail, took it home, jailbreak it so it works with other networks.

With the UK  iPhone 3G it appears they want you to buy at retail.

The US store offers both Apple Retail or AT&T.

I hope I am wrong but that’s what it looks like if you take a look at the Apple Store’s Where to buy page.

Link: http://www.apple.com/uk/iphone/buy/

6) Microsoft Exchange Support.

The iPhone 2.0 will have support for Exchange Servers.

5) The iPhone 1.0 was a 1.0 product.

The improvements in the  iPhone 2.0 hardware are worth the upgrade.

4) I don’t need an iPod Experience on my phone.

I have actually changed my mind on that. The iTunes ecosystem in the UK now supports both TV streaming, TV downloads and Movie rental and download. Making it much more desirable.

3) Not a big fan of O2

Not a lot I can do here. O2 still have exclusivity. I do wonder what anti Jailbreak technology will ship with iPhone 2.0.

2) Lack of 3G

iPhone 2.0 has 3g and GPS

1) The Cost.

O2 have now announced pricing: “Best of all, the new 8GB iPhone won’t cost you a penny on our £45 and £75 tariffs. And it’s just £99 on our £35 tariff and new £30 tariff”

So they get you with the monthly contract. TCO for an 8gb model is

£99 Handset, 18 Months @ £30 = £540 TCO for 18 months is £639
£99 Handset, 18 Months @ £35 = £630 TCO for 18 months is £729

£0 Handset, 18 Months @ £45 = £810 TCO for 18 months is £810
£0 Handset, 18 Months @ £75 = £1350 TCO for 18 months is £1350

So the pricing model even with the reduced handset cost is still prohibitivly expensive.

Summary

So my barriers to entry are the choice of O2 and the Cost.

Steve Jobs is due to start the 2008 Word Wide Developer Conference with a series of Keynote product announcements.

This should all kick off at 6pm UK time today.

I will publish a quick summary of the announcements below.

The iPhone getting 3g is old news, want I really want is  a Touch Tablet but we will have to wait and see….

The Key Points:-

3g for wireless data.
GPS for positioning.
Increased Battery Life. 
8GB $199.
16GB $299.
Availability goes from 6 countries to 22 by July then 70 by the end of the year.
Applications Store for new Software applications.
Microsoft Exchange Support.

Product Link: http://store.apple.com/uk/browse/home/shop_iphone/family/iphone?mco=NzY2NzA0

The UK pricing has yet to be confirmed.

Other Links

http://www.engadget.com/2008/06/09/iphone-3g-hands-on/

If you want to watch the Keynote you can download it from iTunes

From £269 to £169 but still on the relatively expensive lengthy monthly contract.

A number of things are happening here.

1) The iPhone isn’t actually that popular in the UK. This is based on their choice of network provider (O2) and cost of the hardware.  Outside of some Tech friends I haven’t actually seen an iPhone in the wild.

2) Apple are about to announce a hardware revision. I would imagine the discontinuation of the 8mb model and the introduction of a 32gb to partner with the existing 16gb version. So O2 don’t want left with a load of 8gb stock they cant sell.

So even at £100 off this is still too expensive over the life of the contract.

As for the hardware revision, the worst kept secret in tech is the inclusion of 3g. One of the biggest stumbling blocks for adoption of the iPhone, particularly in Europe.

I finally made it to the end of the video version of the roadmap presentation from March 6th.

The video was so long (78 mins) I was watching a bit here and bit there due to being very busy.

Well all I can say is I am surprised this isn’t getting more news.

Apple clearly are heading for Enterprise and business customers. Their big untapped markets.

Its simple to shrug off the iPhone as a consumer gimmick but some of the business applications shown in the roadmap presentation were very compelling.

Example: The Salesforce.com application, beaming new leads to remote sales people then tracking the new contacts location with Google maps all within a new finger gestures.

All Apple need to do is keep going and they seem to be pretty good at delivering on promises.

The next problem is the iPhone/iTouch form factor but that can be solved by making a  12″ tablet version with multi-touch and it’s game over.

If you have  iTunes installed you can use the link below to download the video (its about 800mb).

This is proper next generation stuff. No one else is innovating on this level.

iTunes Link: Apple March 6 Event_ iPhone Software Roadmap

The BBCi Player. Using the devices built in WiFi you can browse to a web page designed to work on the iPhones small screen (pictured above).

Then you can browse through the last seven days worth of viewing and choose the show you are interested in.

On Windows the BBC iPlayer can download or stream, on the iPhone you can only stream.

Now if you have ever experienced streaming video on a handheld the quality is usually quite poor.

But this streaming model has been designed for WiFi only so they can deliver much better quality video as the target connection would typically at broadband speeds.

I had a chance to play with this the other day on someone else’s iPhone.

First the user experience, you click, you play its that simple.

The quality of the Video has the WOW factor.

For those interested the streams are 516Kbps streams (400Kbps H.264 video, 116Kbps AAC audio).

My advice is till avoid the iPhone 1.0 its still a 1.0 product, better will come. But its great to see Apple allowing innovation like this on the platform. Especially as some of the content is in direct competition with paid for content on iTunes.

Link: BBC Article About iPhone and the BBCiPlayer