What's Behind the iPhone 3G Glitches

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According to this person, the problems are only occurring in areas of high iPhone density. These include the San Francisco Bay area, Boston, and certain overseas locales. The reason the problem has gotten worse in recent days is because of the steep increase in iPhone activations in these places. The more people who are trying to use a given piece of gear, the more likely they are to get bumped.

Yet another theory is that AT&T hasn't put in place sufficient 3G network equipment to handle the traffic spike in key areas, a charge AT&T insists is untrue.

Growing Pains

Whatever the cause, connection problems are a big disappointment for customers who bought the iPhone 3G precisely because of its promise of more reliable Net access. Apple's home page still advertises the device with the tagline "Twice as Fast. Half the Price." Now reports suggest that Apple customer service reps are telling consumers who are encountering problems to shut off the 3G feature. "I'm so sick of hearing people say 'turn off 3G,'" laments an iPhone 3G owner identified as jazzwill, whose remarks are among 926 replies to a post on Apple's Web site entitled "iPhone 3G Reception Problems? You're Not Alone." "Uh, why pay an extra $10 [for AT&T's iPhone plan] and get a new phone that is advertised to 'just work' then???…. I returned my iPhone 3G because the iPhone 3G stinks in my opinion. I went back to my original iPhone."

The iPhone 3G complaints coincide with dismay over another Apple product, a new online service called MobileMe, that has dealt a rare bruise to Apple's reputation for product reliability. Subscribers who pay the $99 annual MobileMe fee are supposed to have their e-mail, calendars, and other information synched between various devices. But for a few hours on Aug. 11, users were unable to get their e-mail on an iPhone, iPod touch, or on a desktop PC application.

Apple resolved that problem and got MobileMe back up and running. The iPhone networking problems could take a bit longer. Two sources say Apple will likely issue a software update by the end of September—if not by the end of this month—to resolve the issues. Apple and Infineon are currently testing the fix, which will be included in a broader update of the iPhone's software. iPhone owners will be prompted to install the update when they synch their iPhones to a PC, just as they have on many other occasions. In its statement, AT&T said, "We urge our customers to synch iPhone 3G to iTunes frequently to ensure they have the latest software updates."

Nomura's Windsor notes that the glitches are reminiscent of the problems carriers had with handsets from Nokia (NOK) and other manufacturers earlier in the decade when they were rolling out their 3G networks in Europe, adding that they may not have a lasting impact on Apple's reputation, especially if the company is able to avoid a recall. In other words, the iPhone may simply be suffering the growing pains common to cutting-edge technologies that are anything but common.

Business Exchange related topics:
Apple
Blackberry vs iPhone
Smartphones
Wireless Communication
Mobile Industry

Burrows is a senior writer for BusinessWeek, based in Silicon Valley .