They have a very good point. And it just proves once again how poorly thought through this launch was.

Apple is moving much more of its retail into its own stores and essentially locking out those vendors that stuck with them for years and years, even when the products were not all that popular.

No infrastructure is needed either, people were able to just walk into an Apple store and buy one.

I hope for Apples sake this doesn't backfire on them.

I think this just goes to show that they didn't prepare enough for the iPhone but I think Apple will do a much better job when the 2nd gen comes out, which will be a much better product.

Given the number of iPhones available, I don't blame Apple for the distribution strategy. Seeing as most ATT stores sold out, I doubt spreading the supply thinner would ahve been in cosumers intrest (just more waiting in line and driving around). I for one actually applaud the move given the supply situation.

A good many customers don't realize that the iPhone is being sold exclusively by AT&T and Apple stores and they're wandering into electronics retailers asking for the phone

Really? Even my Mom knew where they'd be sold. Gimme a break.

If you really think this launch was 'poor', you've lost the plot.

Aw, the middleman is missing out on his cut of the pie. I have nothing against J&R in particular, but really, crap is expensive enough as it is, and every time something changes hands between the maker and the user, another profit margin gets added to the price we pay, driving down quality. I'm sure J&R hosed a few small dealers on their way up the food chain - they really have no ground to complain about missing out on screwing us a little more.

If only we could find a way to link the iPhone with an airline.... Hmmmmmm

As far as I can tell, you could walk into an apple store, buy an iPhone, go home and activate it. No credit check or anything (which is unheard of with AT&T) - as long as you had $499 for the phone and a credit card, you were good to go...

@dbeahn: No, they run a credit check when you activate in iTunes. So if you buy your iPhone and you fail the check, you're screwed.

actually...if you fail the credit check you just end up paying for a higher cost pre-paid plan. but with no contract.

[www.msnbc.msn.com]

Awwwww....they don't get to provide lousy customer service and charge restocking fees on iPhones. Yeah, I feel real bad for them.

"how poorly thought through this launch was"

Seriously?
I see no way in which this was poorly thought through in any manner.

Apple got distribution of a massively popular product to ALL who wanted one in the first 2-3 days of launch.
They drove HUGE traffic to their stores.
(The only thing is that Apple probably would have preferred to not even let AT&T store distribute iPhones)

And who are these retailers that "stuck with them"? Before the iPod, the only place you could buy a Mac was online and at the local college bookstore. Let's not pretend that any retailer is somehow "loyal"

Really, these retailers are being cry-babies about this one... Oh, poor J&R, not able to get their cut on this on...

Also, I assumed they checked credit when they ran your card at the store.

@Jasmo: Exactly. They're jonesing for the "juice", the iPhone upsells. I doubt they would make much on the phone itself, but ooohhh-boy... the extra chargers, a deeeeeluxe case, cables, all with astronomical margins.... these retailers are having visions of sugar iPlums!

Not to mention that these self-named-gurus couldn't get one for free, or at high discount "floor model" prices. They had to go into a store and buy one just like everyone else. After a lifetime so far of trying stuff out early and getting sneak previews of the goodies and whatnot, this launch really chaps their anodes.

I dont think they will be wanting part of the iPhone biz when it turns into a return fest 2007.

Frank the tank- while college bookstores werea good place to buy macs pre internet and pre apple store there infact are retailers that have supported apple since the apple II days.

Apple has burned a lot of bridges in the past screwing their old partners once a new revenue stream opens up.

What's going on with J&R is nothing new. They just didn't have enough clout to count.

"So if you buy your iPhone and you fail the check, you're screwed."
Actually you are then offered a pay as you go setup. Personally since I hate AT&T, this seems like a reward, not being "screwed."

actually while I am not fond of J&R Music World, they DID stick through with Apple during the dark ages, before Jobs came back. They used to have one of the biggest boths for a retailer at Macworld NY, bigger even than Microsoft or for a short time, Apples.

I don't think the decision to sell only in AT&T and Apple Stores was a mistake. I suspect it was quite deliberate. Outside the press associated with the original release, and a need to make sure it went as smoothly as possible (meaning staff trained as well as can be expected), Apple (and perhaps AT&T too) wanted to associate the iPhone with the Apple brand. Apple wanted people to come in to the Apple Store, especially if their first time, to be welcomed and introduced to the Apple family. Especially the early adopter buyers.

The Apple faithful would have purchased from Apple anyway.

That said, I suspect as soon as production allows it, Apple will expand the release to places like Best Buy and the above-mentioned high end retailer. (And it would certainly make sense).

@Falconfire: Also consider that if Apple decided to pick up a few selective first-rate resellers outside the AT&T/Apple Store family, while snubbing other retailers (especially big box retailers), they would have burned some bridges.

@XianZhuXuande: That makes sense except for the part where Steve Jobs tells consumers to go to AT&T stores, not Apple stores, for the iPhone.

[consumerist.com]

@not_seth_brundle: Huh? That would probably mean more if I could read it in context. Link? You bet Apple is happy to have customers in the Apple Stores. If that wasn't the case, Apple wouldn't have been treating them with stocking priority.

@not_seth_brundle: Okay, I can see the link. Didn't notice it right away with the new layout. I would not consider that sole instance to be indicative of company policy.

Apple set the price for the iPhone at $499 and $599 and commanded that this be the price consumers pay, no more, no less. Because price fixing or anti-trust laws forbid Apple and AT&T from dictating an exact price to dealers and franchisees (they can suggest a price point), the iPhone was sold exclusively at Apple-owned stores and AT&T-owned stores.

I think the Supreme Court put out a ruling the other week that changed all this, but I am not sure.

@XianZhuXuande: If a statement from the CEO is not "indicative of company policy," what would be? The Word of God?

You all realize, of course, that historically, small retailers who carry these hot products have been known to refuse to sell them to customers so they can put them on Ebay, right? And you also realize that more than half the people out there looking for them right now are ALSO looking for them to sell on Ebay?

I don't blame Apple. They're taking a consumer-friendly approach so that they can prevent reselling and speculating. Good for them. As was observed, most of the people who genuinely wanted an iPhone got one. It wasn't half as bad as, say, the launch of the PS3 or the Nintendo Wii, where there were often far more people than systems available.