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Fans' anger at Apple iPhone

By Laura Clout, Nicole Martin and Bonnie Malkin found at telegraph.co.uk 
05/11/2007

The UK launch of the Apple iPhone is in danger of being overshadowed by a backlash against its manufacturers.

Previously-devoted followers of Apple are turning against the brand, with a growing chorus of consumers complaining that the company has become greedy and ruthless.

Some have even likened Apple to its "soulless, monopolistic" rival Microsoft.

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At the heart of their grievances is the company's "closed system", which prevents third parties adding their software to Apple products.

Fans are also angry over the company's decision to cut the price of the iPhone in the US by $100, less than 10 weeks after it was launched.

The much-hyped iPhone goes on sale in Britain at 6:02pm on Friday, but any fanfare surrounding the launch could be tainted by spiralling complaints.

American software developer Wil Shipley has claimed some fans feel the company has turned against them.

"We suffer so Apple can make a few more bucks, when Apple is clearly not hurting for money," he said in comments on his blog, Call Me Fishmeal.

Industry experts have also predicted the gadget will not be as popular as hoped in Britain.

Stephen Pentland, director of media strategy at Deloitte, told the Observer: "I don't think it is going to be a huge seller. There are a number of other phones that have similar functions at a lower price."

Sales of iPhone are predicted to hit 200,000 in Britain by Christmas, despite fears that some customers could have difficulties surfing the internet with it.

O2, Apple's exclusive network partner in the UK, is already predicting the combined music player, camera, phone and internet device will be its fastest selling handset yet.

But with the cheapest deal starting at £899 for an 18-month contract, critics have been swift to point out that potential shortcomings of the product make the high price appear unjustified.

UK fans have already complained that the gadget costs almost £70 more in Britain than America.

Mobile phone analysts also believe some customers could be left frustrated by problems using the internet, because iPhone is unable to use the high-speed 3G phone network to browse the web.

In some parts of the country, customers will have to rely on the slower GPRS network to check their email or the surf the web.

Andrew Lim, mobile phones editor, claimed that he expected "a couple of hundred thousand" iPhones to be sold in the first two months.

Rival mobile phone manufacturers have rushed out a range of new handsets and services in a desperate bid to stop their customers jumping ship.

Each year, Apple Inc. sweeps out its old line of gadgets to make room for an even spiffier group of products for the holidays. And, each year around this time, Apple rivals and others dumbfounded by its multiyear winning streak in the electronics business wonder whether this is the holiday season when the company will finally stumble.

Don't bet on it. This Monday, Apple will offer the first hint of how its computers, iPods and new iPhones are likely to perform during the crucial holiday shopping season when it reports its fiscal fourth-quarter earnings for the period ended late September. The earnings will include the first sales results from a new family of iPods and the iPhone's first full quarter of sales.

Keeping its iPods fresh in a market that seems increasingly saturated with devices is something of a high-wire act for Apple. The Cupertino, Calif., company introduced the iPod in late 2001 and has sold more than 110 million of the digital fresh music players, holding its share of the U.S. market steady at more than 70% despite an array of rivals including Microsoft Corp.

In early September 2007, Apple dumped its old iPod nano, the skinny device that was its best-selling fresh music player, replacing it with a chubbier model -- Apple fans quickly nicknamed it the "fatboy" nano -- that plays video. It also ripped the cellphone and other features out of the iPhone to create the new iPod touch with its large touch-sensitive screen.

Early signs suggest the new iPods are a hit. "They had just a tremendous September," says Tony Berkman, an analyst for Majestic Research, a financial-research firm that uses Internet sales figures from various sources to determine a company's overall performance.

In a potential red flag for the current holiday quarter, Mr. Berkman said Majestic's research shows iPods sales slowed considerably in the first two weeks in October 2007. But he says it's tough to read deeply into what that means. Apple will likely give a sign of its confidence when it provides financial forecasts for the current quarter, which ends in late December.

The iPhone appears to be selling well, too, especially after Apple dropped the price by $200 to $399 in early September. Analysts believe Apple will report about one million iPhones sold in the quarter ended late September, on top of the 270,000 they sold in the 30 hours it was available during the prior quarter.

  Much hinges on the iPhone, a potentially huge new category for Apple. The company's shares are up approximately 25% since its last earnings report in late July, based on optimism over new products like the iPhone. Chief Executive Steve Jobs has predicted Apple will sell 10 million iPhones by the end of 2008, giving it 1% of the cellphone market.

Based on sales so far, and the high probability of new iPhone models from Apple next year, Mr. Berkman says it isn't a stretch for them to meet that goal.

zune downloads: Trent Reznor of the band Nine Inch Nails Write to Nick Wingfield at nick.wingfield@wsj.com 

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Trent Reznor of the band Nine Inch Nails

By NICK WINGFIELD October 20, 2007; Page A2 found at online.wsj.com

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