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TMCNet:  iPhone Picked Up in Hordes Overseas

[July 11, 2008]

iPhone Picked Up in Hordes Overseas

(www.internetnews.com Via Acquire Media NewsEdge) Apple iPhoneSource: Reuters

Apple's new iPhone made its hotly awaited debut on Friday, with buyers storming stores in Asia and queues forming in European cities.

Sales of the device, which combines a music and video player, mobile phone and Web browser, kicked off in New Zealand, where a 22-year-old student became its first owner.

"I'm going to put this on charge, have a play around with it and have a nice long sleep," said Jonny Gladwell, who waited in line in freezing temperatures for around 60 hours to be the world's first to buy the iPhone at a minute past midnight on Friday.

Guards in kevlar vests and helmets brandished shotguns and stood guard over 500 devices on sale in Hong Kong, a city that has seen its share of unruly crowds at major product launches.

SoftBank, which sells the iPhone in Japan, said more than 1,500 people lined up outside its flagship Tokyo store. Policemen yelled at passersby to make room.

In London, a orderly queue in front of the flagship store of O2, a unit of Telefonica (NYSE: TEF), extended around the corner. "We ordered lots -- we've seen the demand the first time, but we're even blown away by this demand. I think it is unprecedented," said Steve Alder, O2 U.K.'s iPhone director.

"We've got stocks coming in every week ... I am confident that by the end of the summer, everyone will have one who wants one."

Apple shares have risen by nearly 4 percent over the last week in anticipation of the rollout in 21 countries on Friday.

With its latest device, Apple, the creator of the Macintosh computer and iPod, hopes to ride on burgeoning demand for smartphones, an area which handset makers such as South Korea's Samsung Electronics, Taiwan's HTC and Finland's Nokia (NYSE: NOK) are fighting to dominate.

The iPhone phenomenon

The first version of the iPhone was snapped up by 270,000 people within days of its June 2007 launch.

"The iPhone phenomenon is going to stimulate the adoption of smartphones. It will change the landscape, the way the iPod did for the MP3 player industry," said Charles Guo, analyst at JPMorgan (NYSE: JPM).

Analysts expect the new iPhone to draw as many as 10.5 million buyers worldwide this year, and with 6 million of the older devices already in use, help Apple beat its target of selling 10 million devices by the end of 2008.

Most carriers subsidize the phone, tie it to their networks and lock consumers into long-running contracts -- something that may have to change to boost its appeal for customers who prefer prepaid offers.

"Opening it up to prepay outside North America is very important ... prepaid is the tariff of choice for most people in most parts of the world," CCS Insight analyst Shaun Collins said.

Outside one Brussels store, where the iPhone is sold unlocked and without a contract beginning at 525 euros ($828), a queue, all men, was steadily building an hour before opening time on Friday.

Germain Merinero, a European Commission employee, at the head of the queue said he was not put off by the price.

"It's a little toy, and you pay what you have to," he said.

But a midnight launch in Helsinki, the home turf of the world's biggest mobile phone maker Nokia, drew a scant crowd, while outdoor bars nearby were booming with business.

Taste of the action

The next-generation iPhone is Asia's first official taste of the touch-screen device previously available only in the United States and Europe.

The new iPhone offers faster Web access than the first and supports third-party software like games and instant messaging. The iPhone has also grabbed interest for its support of third-party applications from companies such as Oracle (NASDAQ: ORCL) and Salesforce.com (NYSE: CRM). Plus, its e-mail capability squarely targets Research in Motion's (NASDAQ: RIMM) BlackBerry.

[cob:Special_Report]Many analysts doubt the device will be popular among mainstream customers in Japan, Asia's largest retail market, because it does not support television services or electronic payment features widely used in the country.

Others point to a vibrant gray market for fakes or unlocked phones -- hacked to work on other carriers' networks -- in China and Southeast Asia, cannibalizing demand.

Outside of London's Apple store, not everyone was affected by the hype or even aware of the launch. Looking at the hubbub surrounding the store, one passerby commented, "What's the big deal?"

Copyright ? 2008 Jupitermedia Corp.

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