The email from Jobs read:

We agree, and are discussing it with ATT.

Sent from my iPhone

The newspaper cites reported from iPhones users who state that they are experiencing issues with calls being dropped. The newspaper goes onto speculate that this could be an hardware issue with the Infineon chip used within the iPhone; a possibility that Infineon itself has stated as unlikely.

The article explains that the iPhone 2.0.2 update released yesterday aims to fix the reported issues by addressing how quickly the iPhone 3G will drop a weak 3G signal and begin using a stronger EDGE signal. Often resulting in dropped calls and frustrated users.

Apple spokeswoman Jennifer Bowcock said on Tuesday, “The software update improves communication with 3G networks.”

The information was disclosed by AT&T during its fiscal second quarter results in which company profits rose 30-percent to $3.77 billion (63 cents per share) on revenue of $30.9 billion for the three months ended June 30.

“The Apple iPhone 3G is a dramatic example of this transformation,” said chief executive Randall Stephenson. “In the days following our exclusive U.S. launch of this new device, powered by the nation’s fastest 3G wireless network, customer response has been everything we had anticipated and more.”

The first cracks began appearing when the iPhone was set to launch in the UK, as customers queued through the early hours of the morning they were quickly disappointed as stocks dwindled at O2, Carphone Warehouse and Apple Stores across the country. Most O2 stores reporting that they had less than 50 units.

These issues and frustrations were nothing compared to what would occur as US purchasers began hammering the iTunes activation servers. Not long after the 8AM launch of the iPhone 3G on the East Coast Apple’s servers began slowing and eventually died leaving thousands queuing across the country.

Reports emerged that some were being sent home with un-activated units, instead being told to activate them at home through iTunes.

The problem was increased by magnitude as Apple simultaneously released the iPhone and iPod touch 2.0 firmware update causing a flurry of users to attempt to download the software.

As servers failed many iPhone owners in AT&T and Apple stores were left with half “bricked” iPhones and users at home trying to update were also suffering with non-functional units.

The problems come after a significant delay in the release of MobileMe which took over 24 hours to fully come online and is reportedly still sluggish.

The iPhone 3G will go on sale at 8am in AT&T stores across the US on July 11.

AT&T offers a video for existing customers in which the company outlines that current iPhone owners backup their iPhone using iTunes prior to purchasing an iPhone 3G. The video also notes that voicemail will be deleted when upgrading.

In a second video AT&T advises those wishing to sing-up with AT&T for the first time to visit a store before July 11th and complete a credit check to save time on launch day.

AT&T also confirmed that the 8GB and 16GB iPhone’s will sell for $199 and $299 respectively, prices require two-year contracts and are available to customers who purchased before July 11, customers activating a new line with AT&T and current AT&T customers who are eligible, at the time of purchase, for an upgrade discount.

The iPhone 3G will cost $599 and $699 to customers wishing to opt out of any form of contract and will be sold sometime “in the future,” AT&T said.

iPhones will go on sale at 8 a.m. local time on July 11.

The analyst also adds that AT&T is paying Apple an added $100 for each new subscriber to AT&T signed up through Apple’s brick-and-mortar stores.

The subsidy on the iPhone is said to be more than 50-percent higher than most other smart phones which are typically subsidised by around $200.

Today Apple and AT&T have agreed to license its “visual voicemail” technology and settled a lawsuit against them. No companies involved revealed the financial details of the agreement.

“The patent litigation with Apple has been settled. The patents have been licensed to Apple,” company founder Judah Klausner.

According to supporting materials AT&T will be discussing:

• Strategy
• Qs and As

AT&T will focus on the following four aspects of iPhone 3G when selling the device:

• More powerful device - innovative features and functionality
• Greater speeds - delivered via AT&T’s 3G network
• New agreement - replaces revenue sharing with traditional model that supports a significantly lower device price point
• Opportunity to expand the market - and spur increased demand for wireless data services

AT&T also lists “GPS-enabled YellowPages.com mobile application” as a feature of the new iPhone.

Finally AT&T confirms that two monthly data plan options will be available:

• Consumer individual unlimited data and e-mail - $30
• Enterprise unlimited data and corporate e-mail - $45

In June of 2007 AT&T hired many short-term workers for what turned into crowd control for the release of the iPhone on June 29th.

Temporary workers will begin work on June 16th and end three months later on August 16th, those who remember from last year will note that the temps started one week before the iPhone release to receive the necessary training.

AT&T said Wednesday that it plans to complete deployment of its 3G network by next month.

“By the end of June, connecting to AT&T’s 3G mobile broadband service will be as speedy as logging onto the high speed Internet service that many consumers enjoy at home,” the carrier said in a statement.

The carrier which is the exclusive distributor of the iPhone in the US noted that the final step in the deployment of its 3G network was to setup High Speed Uplink Packet Access (HSUPA) technology in six remaining markets covered by its 3G network, which will boost uploads speeds to the 500 - 800 Kbps range.

“The ability to quickly upload large files from a laptop is no longer a luxury — it’s a necessity,” said Kris Rinne, senior vice president of Architecture and Planning for AT&T’s wireless operations. “By fully deploying HSUPA across our 3G footprint, we not only meet the current needs of our customers but also lay the path for our continued evolution to even faster wireless broadband capabilities.”

The company’s HSPA network is the best-positioned among American carriers to grow in line with customer demand, evolving to HSPA+ and providing next-generation speeds without costly investments. AT&T plans to adopt LTE (Long Term Evolution) technology to reach even higher speeds in the long term.

Apple is widely expected to release the next revision of the iPhone in June, it is also predicted that the iPhone will run on 3G technologies taking advantage of AT&T’s continued deployment across the USA.

Offers Refurb iPhones for Discount

AT&T is currently selling refurbished iPhones on its online store.

The 16GB iPhone is selling for just $349 while the 8GB model is selling for only $249.

AppleInsider has republished an internal AT&T memo which informs retail staff that customers can only purchase one iPhone.

“Effective May 14, 2008, customers can only purchase one iPhone at AT&T stores,” reads a copy of the memo. “The prior limit of three iPhones is no longer in effect.”

AT&T also informs retail staff that customers can only purchase using credit or debit cards.

T-Mobile Germany Shifts 100,000 iPhones

CEO of Deutsche Telekon, Rene Obermann announced today that its subsidiary T-Mobile has sold over 100,000 iPhones in Germany.

T-Mobile board member Hamid Akhavan cited that iPhone sales were “about in line” with corporate sales targets.

Recent price cuts of the iPhone in Germany were said to have increased sales.

AppleInsider is reporting that AT&T is now listing a new iPhone model on its website.

The option to select “iPhone Black” is visible alongside the normal “iPhone” for existing AT&T customers who are logged into their AT&T account.

The apparent error adds credence to rumours that the next-generation iPhone will have a black plastic shell.

Boy Genius Report is today noting that another AT&T memo informs employees that vacation will be limited between June 15 and July 12.

The internal memo as follows:

To: All Employees

If customer traffic is manageable, there may be an opportunity to approve vacation toward the end of the period. Managers will communicate updates as they become available.

This comment was reportedly followed up with a question from Sascha Segan from PC Mag asking whether that sweeping statement included the iPhone, the CEO repeated, “Let me repeat what I said: I think that you’re going to see our integrated devices be 3G devices in the not-too-distant future, and I mean months. That should be clear enough.”

After the expansion AT&T will be serving 3G services to over 350 cities across the U.S. including all of the top 100 U.S. cities.

The 3G initiative will include the roll out of more than 1,500 additional cell sites nation wide.

Apple and AT&T have both spoke of the 3G iPhone which is likely to see its release in 2008.

“You’ll have it next year,” he said, explaining that he was unaware of how much more the new version will cost than the existing $399 model because Apple chief executive Steve Jobs “will dictate what the price of the phone is.”

The new model which is widely expected since Jobs himself has mentioned that Apple is working on it should please those who have discounted the current model due to its EDGE connection which uses existing 2.5G GSM technologies. 3G coverage across America and many parts of Europe is still as patchy as EDGE coverage.

A new $60 Data Global Plans will offer iPhone users just 50MB of data transfer in more than 29 countries, including Canada, China, Mexico and in areas throughout Europe and Asia.

The plan, which must be purchased in addition to the domestic voice and data iPhone plan acquired during iPhone activation, also enables international voice and data roaming, as well as international long distance dialing from the United States at standard rates.

The official carrier of the iPhone in America announced on Tuesday that it had signed up just 146,000 subscribers in the first two days of the iPhone being on sale.

The figure is well below analyst estimates of half a million and 700,000 units.

Pacific Crest analyst Andy Hargreaves said that while iPhone sales figures for coming months would be more telling than the first few days, AT&T’s number had disappointed investors as some analysts estimated sales “north of 500,000.”

Hargreaves had himself estimated 400,000 iPhone sales for the first two days, he said.

“The difference (between sales and activations) is going to be what was sold on eBay or activations that didn’t happen immediately. There were some problems with activations but from what we heard it was minimal,” the analyst said.

AT&T on Tuesday will announce in detail its second quarter earnings.

On the other hand AT&T spokesman Mark Siegel gives the most official word on iPhone sales so far.

“We’ve sold more iPhones in the first weekend than we’ve sold in the first month of any other wireless device in AT&T’s history,” Siegel said.

Meanwhile Apple’s store inventory tool is shedding some light by revealing that 95 out of 164 stores have no stock of iPhones today. The online store still shows an estimated ship date of 2-4 weeks.

AT&T’s remote activation system appears to be seriously bottle necked with some users waiting over 8 hours for activations to come through. (Mac Rumors, Apple Support, Howard Forums)

While waiting for activation the iPhone is unusable, just displaying a screen allowing only emergency calls.

It has been rumoured in the past that AT&T was engaged in a project called “Finer edge. The project was said to be an attempt to double speeds on AT&T’s EDGE network.

Mr. Jobs acknowledged that the company’s new iPhone won’t surf the Internet as fast as he would like on the network, called “Edge,” but added that the device’s ability to connect to Wi-Fi hotspots would give consumers a speedier alternative for Web browsing. For his part, Mr. Stephenson said the iPhone represents a broader push by AT&T into Wi-Fi services, including, potentially, mobile Internet calling. The two men also discussed the iPod’s “halo effect” and reflected on the origins of their corporate partnership.

WSJ: One of the interesting things for people about the iPhone is the bundling of data and voice into one service plan. We’ve talked to some other smartphone manufacturers in the last couple days who say that would be great if that were extended to other devices because it seems like it would ensure that out-of-the-box people aren’t getting an experience where they’re pressing a button and something doesn’t work. Is that something that you are looking at extending to other phones in the AT&T lineup over time?

Randall Stephenson: It depends on the handset itself. With this particular device, to not have an inclusive data package with a voice package would be almost irrelevant, right? This is a data and a voice product. It’s nonsensical to sell a rate plan separate. As you see devices migrate towards this type of device, I fully expect you’ll see rate plans migrate towards that as well.

WSJ: A lot of attention has been focused in some of the initial reviews of the iPhone on the EDGE network that this phone is going to be on. Steve, we saw somewhere that your concern in putting a 3G chip in the first edition of the iPhone was that the current generation of that technology would drain the battery a lot, and that there were also some issues of coverage of the AT&T 3G network at the time you did this deal. Is that correct and have those issues been resolved over time as we’ve seen the technology evolve?

When we looked at 3G, the chipsets are not quite mature, in the sense that they’re not low-enough power for what we were looking for. They were not integrated enough, so they took up too much physical space. We cared a lot about battery life and we cared a lot about physical size. Down the road, I’m sure some of those tradeoffs will become more favorable towards 3G but as of now we think we made a pretty good doggone decision.

WSJ: Did you make enough of these to meet demand?

Mr. Jobs: We’re building a fair number of them, but we may not. We had to make our best guess as to what the demand was going to be and what supply we were going to put in place many, many months ago. We built factories to build these things and everything. We’ve taken our best guess but it wouldn’t surprise me at all if it ain’t enough.

The manual contains several details previously unknown.

“Works with iPhone”

Apple has created a “Works with iPhone” program, similar to the “Made for iPod” program. If the iPhone detects non-certified devices being connected to the dock connector it will warn the user that the experience may not be seamless.

Warranty and Repairs

• DOA (Dead on Arrival) iPhones cannot be exchanged over the counter, customers must go through AppleCare
• Repair turnaround is expected to be 3 business days
• AppleCare Service iPhones are provided to customers for a small fee when their iPhone is in for repair

Bluetooth

iPhone supports two Bluetooth profiles; “Hands Free v1.5” and “Headset (HSP).” Apple’s Bluetooth ear piece will work on “Hands Free V1.5. It is expected that most third-party bluetooth accessories will work with iPhone.

Main points from the FAQ:

• iPhone is $499 for 4GB, $599 for 8GB
• Available from Apple Stores, online Apple Store, and AT&T stores (Find your nearest)
• A 2 year service plan is required to use iPhone
• No phone insurance is valid for iPhone, is covered by an Apple warranty
• No business discounts available
• iPhone is useless without activation, which should only take a few minutes
• 14 day return policy, 10% restocking fee if opened

On the small print of Apple’s service plan page it explicitly reads that a 2-year contract is required to make use of any iPhone features, including iPod.

Minimum new 2-year wireless service plan and activation fee required to activate iPhone features, including iPod; plans are subject to AT&T credit approval.

Apple Stores Closing 2-6 on Friday

iPhone Coming June 29

In preparation for the iPhone release on Friday, Apple Retail Stores in America will close at 2PM until 6.00PM.

Apple retail stores will be closed on June 29 from 2:00 p.m. to 6:00 p.m. to get ready for the premiere of iPhone. We’ll open the doors again at 6:00 p.m., when you can be one of the first to see, try, and buy the iPhone. Be sure to arrive early — iPhone is available on a first-come, first-served basis.

Activation works for both new and existing AT&T customers and allows users to transfer their existing number to the iPhone.

The video appears to contain an error, at one point the capacity of the iPhone is listed as 74.40GB.

AT&T monthly plans for iPhone

The six plans are as follows, all include unlimited data 200 SMS text messages, roll over minutes and unlimited mobile to mobile calling.

• $59.99 for 450 voice minutes
• $79.99 for 900 voice minutes
• $99.99 for 1350 voice minutes
• $119.99 for 2000 voice minutes
• $169.99 for 4000 voice minutes
• $219.99 for 6000 voice minutes

All plans have a one off activation fee of $36.

“AT&T has the largest voice and data network in America, the largest mobile-to-mobile calling community and the fewest dropped calls,” said Randall Stephenson, chairman and CEO, AT&T. “AT&T has invested more than 16 billion dollars in its wireless network between 2005 and 2007, and iPhone customers will enjoy the best voice and data network in the nation.”

“We want to make choosing a service plan simple and easy, so every plan includes unlimited data with direct Internet access, along with Visual Voicemail and a host of other goodies,” said Steve Jobs, Apple’s CEO. “We think these three plans give customers the flexibility to experience all of iPhone’s revolutionary features at affordable and competitive prices.”

The report also mentions that Fed Ex will be taking care of deliveries to retail stores on Friday.

Even though AT&T isn’t subsidizing the iPhone’s hefty price — $499 to $599, depending on the storage capacity a customer chooses — the company will charge a $175 termination fee for iPhone users who want to break their two-year contracts.

Th article goes onto write that cancellation fees are in place to prevent the carrier from losing too much money on the subsidies they place on handsets.

Interestingly the iPhone is notably free of subsidies, AT&T spokesman Mark Siegel commented on the situation;

“There are certain fixed costs we incur in serving every customer who establishes service with us.”

The article writes that AT&T has added 2000 extra sales persons to stores across the country in preparation for the launch.

To get “iReady” for the big day, Carter says AT&T added 2,000 extra sales people to stores. Half will be there just to help handle the expected early crush of buyers. The other half, he says, will stay long-term to help with extra customers the iPhone is expected to draw to AT&T’s stores.

The exec also explains that not everywhere will have the sale stockpile of iPhones;

Carter would not say which stores will have the biggest iPhone stockpiles, but allowed that iPod users are a “natural market” for the smart phone. As such, he says, stores in areas with big numbers of iPod users — such as New York City, Chicago and much of California — will be well stocked

If your local store sells out, Carter says sales people will take mail orders, and devices will be shipped in 3 to 5 days, inventory permitting. “Ultimately, we will meet every customer’s desire to have one,” Carter says.

The article also explains that there will be more surprises due on June 29;

Carter says AT&T also will announce new service plans for it [the iPhone].

In a sub-article on the same page the online publication interviews Balsu Thandu an AT&T technician who has owned an iPhone for over 2 months.

The technicians have logged more than 10,000 hours on the phone, including more than 5,000 hours of voice calls and near 5 gigabytes of data usage. Most phones, he says, get about half that much test time.

For the actual testing, technicians frequented all the places where consumers go: office buildings, subway platforms, stairwells, elevators, crowded bars, sprawling suburban malls and congested city streets. They also showed up incognito at Apple and AT&T stores.

Thandu says he took the iPhone with him on long runs, sweating all over it. “We wanted to test the limits of it.”

The move is said to prevent large “mobs” of people crowding into stores prior to the iPhone launch.

“[AT&T stores] will be setting up roped queue lines for when they re-open at 6:00 p.m.,” reports an AppleInsider tipster. “They then plan on staying open till 10:00 p.m.”

AppleInsider notes that some stores in more populated areas are possibly going to open until midnight on June 29.

It has now been revealed that the iPhone will go on sale at 6PM local time on June 29th, giving purchasers on the Eastern coast of America a 3 hour head start over those on the West.

The confirmation came from an AT&T memo stating:

The iPhone will go on sale on at AT&T retail stores June 29 at 6 p.m. local time in each market.

A screenshot of the recent iPhone advert has been posted to Flickr, it points out the portion of the New York Times’ that features a flash video.

It should be noted that the website could simply be fabricated onto the iPhone and does not prove the iPhone’s ability to play Flash.

Flash on the iPhone?

Banners Appear in AT&T Stores

A Mac Rumors user has posted pictures of an AT&T store that shows a banner in the window stating the iPhone release date of June 29.

iPhone Banner in AT&T Store

iPhone Banner in AT&T Store

The first advert called “Never Been an iPod” demonstrates how the iPhone is like no other iPod.

The second is called “Calamari” and shows a user staring of watching ‘Pirates of the Caribbean’ but gets a sudden craving for Calamari, a simple Google Maps search for Seafood brings up the nearest location and the user dials the restaurant.

Finally the third ad named “How To” shows How To turn it on, listen to music and more.

The sources state that the release plans are yet to be “worked out”.

Engadget compares the service to AT&T’s current TV service called U-verse (Wiki).

The interview offers background on Lurie and his history with AT&T, but also goes into some details of the iPhone we haven’t heard of in the past.

When discussing the potential success of the iPhone Lurie said;

“The anticipation that we’re seeing, the buzz we’re seeing, at least for me, has far exceeded our expectations of how important this would be to the business and us,”

The interviewer mentioned that he was sceptical on the price of the iPhone compared to current competition, Lurie answered with;

Here’s how I’d explain it. The most popular iPod, a 4-gigabyte Nano, costs $200. If you’ve got a RIM BlackBerry or Palm Treo, you probably paid $200 minimum. Then you’ve got a phone that you got for free or paid maybe $50.

There are other things — you have the widgets, some of the Google applications that are coming — there are just so many things here that the price will not be an issue.

When questioned on whether a subsidy would be offered for the iPhone Lurie said;

We’re not talking about that.

Screenshot of AT&T internal accounting system

The accounting system shows three versions:

• iPhone PostPaid
• iPhone PrePaid (Pay As You Go)
• iPhone Hybrid (Pick Your Plan)

For clarification for international readers Cingular describes ‘Pay As You Go’ and ‘Pick Your Plan’ as follows:

Pay As You Go
Pay As You Go is wireless made easy. Simply pay in advance for what you need. No long-term contracts, credit checks or surprise bills - just all the benefits of wireless, with no complications.

Pick Your Plan
Get the best of wireless without long-term contracts or unexpected bills. With Pick Your Plan, you establish monthly automatic payments for service and use the balance on your account for voice minutes or other features. It’s that easy.

At this very moment it is unknown whether this is purely an error on AT&T’s system, but if true it would mean customers could simply pony up the money for the phone and use it with other networks.

The site which states that the information is from a reliable source notes that the display cases require some stores to be rewired as the cases require power and network connectivity.

The cases are also said to be 3ft by 7ft tall, but the site was unable to pinpoint when the cases and iPhone’s would be put on display.

MacRumors is reporting that training for individuals related to the iPhone will begin on May 30th and continue through to June 20th. The site points to after June the 20th for a launch date.

Meanwhile the report goes on to say that AT&T/Cingular technicians have begun visiting Apple Stores around America to test mobile network strength, presumably to aid in the demonstration of network features.

Apple advertises in The Record for iPhone team

Apple also appears to be making preparations for the arrival of the iPhone with an advert in ‘The Record’ a newspaper based in the Elk Grove region of California.

The half page advert reads:

The revolution continues.

This event is invite only, so call 1.866.238.6785 to reserve your spot today.

Apple has also begun advertising in the Elk Grove area for iPhone Personal Trainer’s and iPhone Personal Trainer Team Manager.

AT&T Blocking Out June/July

A report from Boy Genius posts an email sent from within AT&T to employees requesting that they don’t take holiday (vacation) during the period of June 15th to July 15th.

The email reads:

As previously announced, Apple and AT&T will soon debut the iPhone, which combines a mobile phone, a widescreen iPod with touch controls, and breakthrough internet communications into one small and lightweight handheld device. The new AT&T has a multiyear, exclusive agreement to provide U.S. service for the iPhone.

I want to thank you in advance for your understanding as this is likely to be the biggest selling period we have seen in a few years.