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Activation may prove challenge to 3G iPhone launch: New process requires in-store activation

A lower price isn’t the only change accompanying the release of Apple Inc.’s 3G iPhone. Activating the device will also differ this year.
When released last summer, customers were required to perform a self-activation of the device at home via their iTunes account. This year, Mark Siegel at AT&T Mobility Inc. said all activation will be done in AT&T Mobility and Apple stores. Seeing as how avid tech fans already line up and pack the stores to just get their new device, having to wait for activations could make it an even lengthier process in the sure-to-be-packed stores. But Siegel said this is the better way to go.
“We want everyone to go home with their iPhone up and running and this gives you the opportunity in person to resolve any questions or issues,” Siegel said.

Missing apples
However, there is some speculation that the in-store activation is a result of unlocked and missing iPhones that resulted from the previous activation process.
Analyst Ian Gillott of iGR said he suspects the reasoning is because AT&T Mobility and Apple don’t want to be hunting down their iPhones.
“About 20% have gone missing somewhere,” Gillott said. “It could be a broad reason; but they just don’t know.”
Moe Tanabian, senior principal at IBB Consulting Group, also touched on the case of the missing iPhones, saying that they end up in the wrong hands, making AT&T Mobility want to be in complete control of the activation process.
“A good number of iPhones are out there, all over the world and they’re not activated on AT&T,” Tanabian said. “It’s not supposed to be like that.”
Tanabian also said it boils down to a financial loss, for both AT&T Mobility and Apple, and they obviously want to nip that in the bud.
“Because of the revenue-sharing agreement, Apple makes money on selling devices, but will miss out on that because if a customer isn’t paying AT&T, then AT&T isn’t paying Apple,” Tanabian said.
However, people are smart and even if AT&T Mobility and Apple take all the steps to protect unauthorized release of the iPhone, Tanabian said tech-savvy individuals may still have an answer.
“It’s a cat-and-mouse game,” Tanabian said. “Whatever AT&T or Apple does to prevent this, there are smart people who will find ways around it; they’ll find a loophole.”
Last year, when activations were done at home, AT&T Mobility signed a deal with Synchronoss Technologies Inc. to activate and manage the process. However, with the activation change, very few phones are left for the company to work with, meaning Synchronoss’ role could change or even disappear. Synchronoss did not return calls for comment.
As far as eager customers who don’t want to wait any longer than they’ll have to for the new device, Tanabian suspects that even in-store activations will be quick, even for the staff at Apple who don’t typically deal with activating cellphone plans on a normal basis.
“The Apple employee will take the same route as a regular user used to take at home,” he said. “I wouldn’t imagine that AT&T or Apple would make it more difficult for the employees than they did for the user.”
Gillott also has high hopes, saying that the in-store activations should only be a problem for the first weekend or so, if at all. Gillot added it doesn’t matter either way because buying an iPhone early on is a slow process.
“When I bought mine last year, they only let five people in the store at a time anyways,” Gillott said.

Pricing details
AT&T Mobility also released some detailed information about device and plan pricing. As previously announced, the 3G iPhone will be available for $199 for the 8 GB model and $299 for the 16 GB model, but only to certain individuals. Alongside a two-year contract, new AT&T Mobility customers, existing iPhone owners who have purchased the new 3G iPhone prior to its July 11th release and eligible AT&T Mobility customers will be able to take advantage of the new, lower prices. Those who rest smack in the middle of a contract will most likely end up paying last summer’s steeper prices for the iPhone. The carrier also released voice plan pricing paired with unlimited data for the 3G iPhone ranging from $70 a month to $130 a month. Text message bundles are additional.

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