This week’s announcement of a third generation of iPhone (the 3G S) has left existing UK iPhone users seething. You see, when last year’s iPhone 3G shipped, Apple’s UK partner (O2) let existing users upgrade regardless of the remaining contract length (they had to… it was in our contracts…) but, critically, the original iPhone was not subsidised – and its 3G replacement was. Now existing subscribers are waking up to the fact that they have to buy themselves out of their contracts if they want to move to a new device. Well, welcome to the big bad world of mobile telecoms guys – that’s the way it’s been for years and why should the iPhone be any different?

Don’t get me wrong – I have an iPhone 3G and I still have about nine months to run on my contract so I’m caught up in this with everyone else but I won’t be looking to upgrade to the 3G S. After all, Apple has committed to giving me the 3.0 software upgrade for free (something I wouldn’t get on a competitive platform – if I had a Windows Mobile phone I would have to wait for the telco to approve the software and, even then, they might not offer me an upgrade). I would like a better camera but I’ve managed with crappy iPhone optics for two years now and, anyway, I’m not convinced that the new one will be that good either – it’s still only 3MP and a camera phone is always hampered by a tiny sensor and poor quality glass (maybe even plastic!). I can live without a compass and, as for video… it’s hard enough to take a decent photo on an iPhone! Voice control will be good, but I don’t think that relies on the new hardware (I may be proved wrong on that). Finally, Apple claim that the 3G S is twice as fast as the 3G… but the network will still be the bottleneck!

The other gripe is the fifteen quid that O2 wants for using the tethering functionality on the iPhone. Here I think the complainers may have a point – after all we have unlimited data access on the iPhone already and why pay more (for what… more data than “unlimited” data!)? Then again, using a full-sized laptop (tethered) to surf with a larger screen will pull down larger graphics – which means more data – and a subsequent hit on O2’s network. The charge is broadly equivalent to that of taking out a contract for a 3G data connection but I would like to see a PAYG option for tethering – I’m simply not going to stump up fifty quid a month for a mobile phone contract (£35 for the base iPhone deal and another £15 for the tethering, minus a few pence from last year’s VAT cut).

If we’re lucky, someone will write a WiFi router application (like they did for Windows Mobile where the telco doesn’t know you are tethered – the laptop talks to the phone over WiFi and the phone looks like it’s using its 3G connection for its own data.

So, I’m sorry for my fellow UK iPhone users but this is the reality of signing up for a mobile phone contract – either buy an unsubsidised (expensive) phone and be free to move around or have a subsidised one with a contract that the telcos will enforce. As for tethering, it is an additional feature, so hoping that O2 wouldn’t charge for it was probably a little naive. With any luck there will be a 4th generation of iPhone this time next year and most of us will be freed from our contracts by then!

In the meantime, the iPhone 3.0 software is due out next week… it looks like I had better upgrade iTunes to 8.2 then…

After Monday’s debacle with the O2 website being unable to respond to the demand for new iPhones, many O2 customers (myself included) received an SMS message this morning which said:

“O2: Unprecedented demand for iPhone 3G

If You tried to order an Apple iPhone 3G last Monday (7 July) and experienced difficulties, we’re really sorry.

To find out the latest details, click on http://shop.o2.co.uk/info/”

I clicked the link and, because I’m sure the notice will not remain on the site indefinitely, here’s a copy of what it says:

“iPhone 3G availability update

Summary
Thank you for your interest in iPhone 3G. We are experiencing unprecedented demand for the device and whilst we are confident that all customers who want iPhone 3G will get one by the end of this summer, initial supply is limited and will be for some weeks. Here is what you need to know:

• O2 and Carphone Warehouse (CPW) stores will have limited numbers of iPhone 3G this Friday 11 July.
• On average, we will only have a few dozen iPhone 3Gs per store (some stores more, some stores less, dependant upon store size so we expect to sell out quickly). Sales of iPhone 3G will be limited to one per customer and two for business customers.
• Some O2 stores will open at 8.02am on Friday, others a bit later. Find out more
• If you do go into an O2 store you will need 2 forms of identification, a valid credit or debit card and proof of address. If you are new to O2 you will also need to pass a credit check if you sign up for an iPhone 3G contract. The average sales transaction processing time will be 20 minutes.
• Apple will be selling iPhone 3Gs in their stores, but please note that existing O2 customers can only upgrade in an O2 or CPW store.
• We are working closely with Apple to get additional iPhone 3Gs. These will be coming in on a weekly basis. We’ll keep you posted on specific details by updating this web page regularly.
• We are currently out of stock of iPhone 3Gs via our on-line store and customer services, we’ll update through www.o2.co.uk when more information becomes available.
• If you have an existing iPhone you can still enjoy many of the new features by upgrading your software to version 2.0 from 11 July through iTunes.
• We are sorry that we can’t meet all demand as quickly as we’d like but we’re sure that when you get your new iPhone 3G you’ll agree it’s been worth the wait.

If you are one of those customers who tried to use our Online shop on Monday, you might like to read on.

I am sorry that you had a frustrating experience in trying to order iPhone 3G. This note summarises why it happened and what happens now.

From the start, we felt it was important that people should be able to register that they were interested and be kept up to date with each part of the launch. As well as giving people the information they needed to get a new iPhone, it would give us an idea of how many iPhones we would need from Apple.

An amazing 200,000 people registered on the site. Apple can only supply us with a small proportion of that number to start with, but with weekly deliveries, we’re confident that everyone who wants an iPhone will be able to get one by the end of the summer. Until then, we realise that some people will be disappointed.

The people who’d registered on our site had the chance to order an iPhone before anyone else. We let them know that they could do this by going online on 7 July and we made it clear that it would be on a first come, first served basis to keep things fair, as stock was limited.

Naturally, we made sure we looked after people already on O2 as well as new customers. And in fact the orders that we received were split 50-50 between new and existing O2 customers.

What went wrong?
Because we were so open about where and when you could pre-order your iPhone, the online shop was always going to be busy. We tried to prepare for this by increasing the online shop’s capacity to 250 times its normal rate and testing it over and over again before the launch.

It wasn’t enough. I’m really sorry if you couldn’t get your order in. We weren’t prepared for the speed and volume of people. I’m not sure any website could have been.

What happens now?
If you ordered online and your order went through, we’ll text you by 6pm tonight, just to confirm. You’ll get your iPhone 3G delivered on Friday 11 July unless you live in one of these remote postcodes. If you haven’t had a text by then, I’m afraid your order wasn’t successful. Your options if you still want an iPhone will be to either go into a O2 store tomorrow and I would recommend you read the key points at the top of this page or alternatively, check the website in the future for stock availability.

Once again, I’m sorry if you had problems with the online shop on Monday. We’re working very closely with Apple to get as much stock as we can for the UK, as quickly as possible.

Thank you

Cheryl Black
Customer Service Director
O2″

Still no news on the white iPhone 3G. That’s the one I’ll be after.

This morning, at 8am (although I didn’t get the text message until 8.50), O2 (the sole UK mobile operator able to offer the Apple iPhone to its customers) started selling iPhone 3Gs online to people who had pre-registered their interest.

Given that O2 knew how many people had pre-registered, it’s logical to think that they might have been able to judge the demand – but apparently not.

Aside from the fact that the upgrade site was unavailable from an iPhone (which is nothing short of bizarre) my reasons for being unable to access the site were entirely outside O2’s control (I was driving when I received the message and then in a client meeting until lunchtime) but one of my friends was experiencing poor website performance before 9 o’clock, then the site went down completely for most of the morning and, at lunchtime, O2 customer service told me that the 16GB models were all sold out (certainly people were complaining on the Apple discussion forums soon after that they could only get an 8GB iPhone 3G… although that thread now seems to have been removed). My friend did at least manage to get conformation that his order had been successful (after 6 hours of trying) but by late afternoon the O2 website was clear that there was no more stock available online and that there would be more information available on 10 July.

I can’t help thinking that the whole thing was stage managed – after all what a great headline: iPhone 3G sold out from pre-orders alone. Except it’s not – there is still stock in stores waiting until 11 July – and there will be more online.

With special pricing available to existing customers who want to upgrade to the new handset, the message is far from clear with O2 staff giving conflicting information to customers. I’m now confident that I will not need my old phone at the time of upgrade (and it’s currently listed for sale on eBay) but, twice now, O2’s iPhone “customer service” team has told me that I will be able to upgrade in store, despite the local store telling me that upgrades are only available via customer service and the website clearly stating that:

“Existing iPhone customers upgrade early to the iPhone 3G before 11th October 2008.
Only available online.”

They were similarly uninformed about the availability of the white 16GB model but the O2 website currently states that iPhone 3G is only available in black and there are rumours of an O2 internal memo that suggests the white iPhone 3G it is 3-4 weeks away.

And, even though they have told me that “there is no extra charge for Exchange Active Sync”, I won’t be surprised if I later find that only business customers can access this service.

I might get myself down to an O2 or Apple store on Friday but I’m already starting to question whether I really need (as opposed to want) 3G or GPS…

Having said that, I was equally ambivalent about the original iPhone and now I’m worried about how I will manage for a few weeks without it!