Comparing iPhone 3GS Debut to 3G, Original iPhone
Latest iPhone Speedy, but Should Apple Take Reverse Course with Upgrade Path?

by Joe Leo, Columnist

COMMENTARY: (07.13.09)-- A year ago today, only three days had passed since the debut of the iPhone 3G, the most anticipated device from Apple since the original iPhone the year before. The lines were long that Friday morning, continuing well on into the night. During that weekend the lines--albeit, smaller--were still there.

This year however, despite the hype over the brand new 3GS, lines for the Apple product release were much more subdued and significantly less than years before. Is the iPhone a "been there, done that"?

AD: If you're in the market for a new iPhone or upgrading your existing model, before you head out to the Apple Store or AT&T, check out iPhone Prices to find out the best deals. Also, don't forget, you can take us with you everywhere you go by getting PB| on our iPod touch or iPhone. Just click the "+" button and add us to your home screen!

Whether you're a die-hard Mac fan, or someone who could care less about Apple, everyone knows that when the Cupertino, CA-based company releases any of its products--be it hardware or software--the big hype machine is in full swing. Anticipation builds days, even weeks in advance of the day of release.

People line up in droves to get their hands on the product (whether they buy it or just get to be one of the first to see and touch "it") or just to be part of the big scene. Who wouldn't, what with all the media outlets on hand to cover the event as the top tech story of the day, if not the entire year.

Nothing could be more further from the truth than the hype over the iPhone, the iPhone 3G, and the iPhone 3GS.

Based on this columnist's observations, however, having been on the scene for each iPhone release since the dawn of time--okay, 2007--and in the same local flagship Apple Store for it, should the company take a reverse course here? Meaning, slow down with its updates and not be so fast like the improvements made to the 3GS?

Back in 2007, on the way to the original iPhone's release, we overheard a college-age person talking with his friends on the subway ride over to San Francisco. Here's an excerpt from our iPhone coverage on June 29th:

The most interesting comment we heard was, "In a year, they'll have upgraded the iPhone."

Interesting because that is the consensus among those who are holding out on buying the iPhone right away. Among other things, such as working the bugs out, what about AT&T as a wireless provider...

Fast forward to 2008, where that guy on the subway train couldn't have been more on the money. One of the reasons why the iPhone 3G was the most anticipated device yet, was because Apple had worked out the problems and kinks to their first smartphone. They made it smarter and faster than before (like the 3GS today).

But who was buying the 3G, Apple's second generation iPhone, after the first one just came out the year prior? We know people who passed on the original were definitely in line to buy. Two hours after the doors to the Apple Store opened to its customers, there were still 301 people--yes, we counted--lined up around the block!

Not that this was scientific or anything, but we took a casual poll of the first group that was inside the store that morning. The surprising findings from our iPhone 3G coverage on July 11th, 2008:

Of the 25 people we surveyed who were all people in the first group ushered in to the Apple Store on Friday morning, 72% of them were buying their second iPhone, upgrading from the iPhone to the iPhone 3G. The rest were buying one for the first time.

"Surprising" because one would expect the majority of people in those lines were first-time buyers. Of course, if you're an Apple aficionado, you'll always want the latest and greatest. Right? Or maybe not? Enter 2009.

Apple anticipated a huge demand--and don't get us wrong, the demand was there... one million units sold in its first three days, according to Apple--even opening up its stores an hour earlier than posted. Had we not checked with our PR contact at Apple to confirm the revised 7:00a opening, we would have missed the event by an hour!

Arriving at 6:30a right off the subway train (since there's a stop that literally opens out to Apple's storefront), roughly 125 people were in line. Did people miss the "train" and not hear about the hour earlier opening? Maybe. But when we finished our coverage and exited the store an hour-and-a-half later? Same amount of people in line.

What happened this year? No lines snaking around the block and onto the next. It was relatively quiet for an Apple event. Remember, after all, that this is the iPhone for crying out loud.

Therein lies the problem. While people, especially Mac fans, normally upgrade every time a new Apple product comes out--be it the newest iteration of OS X, yet another new iPod model, or even a new computer--there's an added "tax" to upgrading the iPhone. It's not easy to get a new one each year.

Sure, the new iPhone 3GS is only $199 for 16GB, twice the capacity and more for the same price than the model it replaced. And the model it replaced? Still for sale, the 8GB version (3G still, as well) but half the price. However, in order to get those prices, you have to be a new customer to AT&T or qualify for an upgrade.

Take into consideration that a lot of those who bought the original iPhone in 2007 were ones who upgraded early to a 3G in 2008 and are still locked in to their contracts for another year. If you were a first-time buyer of an iPhone 3G in 2008, you've still got a year or more left on contract as well.

That's where Apple, in a way, lost this year. Most of those who wanted to upgrade, didn't qualify and would have had to pay full price for the new device. In this slumping economy, not everyone has money to burn.

Who does that leave? First-time iPhone 3GS buyers with yes, flip phones or other non-iPhone devices as we saw this year. Few and far between. Or also, lots of original iPhone owners--the early adopters--who opted to finish up their contracts and are now enjoying their subsidized, and now twice as great, iPhone 3GS.

Is Apple upgrading too fast? Yes and no. Yes, when taking into account those users who have existing accounts with AT&T and not remembering that a lot of iPhone users are those Apple aficionados that come back each and every year. No, because that is just the way the Mac maker operates, and what makes them tick.

The best prediction of all this is something a customer in line back in 2007, said to us in an interview:

On the iPhone itself and what it has going for it as a stand-alone product, Davis at the Apple Store says, "... I think it's going to have an impact, but it won't take away from the Blackberry market (yet). The platform will be hard to copy [but Apple(?)] will build upon it over time."

He adds, "Eventually, it's the way the industry will go."

Build upon it over time? Yes. Just didn't expect it to be so darn 3GS... fast! The way the industry will go? We don't need to dare you to use your instinct on that one. We pre-dict the storm has barely passed with that idea.

Just take the time for a little break to enjoy the nice sunny weather for awhile, will you Apple?


Joe Leo begins his third year as a columnist for Power|'Book Central. His passion for writing, along with his extensive background in journalism and technology, are a perfect complement for this educator and professional freelance journalist based in San Francisco, CA.