Apple Expects 15-Minute Setup Process for New IPhone

Apple Expects 15-Minute Setup Process for New IPhone (Update4)

By Connie Guglielmo

July 8 (Bloomberg) -- Apple Inc. will start selling its new iPhone at 8 a.m. nationwide on July 11 and plans to activate U.S. customer accounts with AT&T Inc. within 15 minutes.

``Our expectation is that in 10 to 15 minutes, you'll be set up and ready to go,'' Ron Johnson, Apple's retail chief, said today in an interview. Apple's more than 185 retail stores in the U.S. each aim to handle about 100 customers an hour, he said.

The iPhone 3G, which works on faster third-generation wireless networks, will also go on sale in 21 other countries on July 11, including Australia, Italy and Japan. Chief Executive Officer Steve Jobs wants the iPhone to become Apple's third major business, alongside the Macintosh computer and iPod media player.

Apple released the original version of the iPhone in June 2007 and sold more than 6 million before running out in May. The company may sell as many as 4.08 million iPhones this quarter, according to Gene Munster, an analyst at Piper Jaffray Cos. in Minneapolis.

``You've got pent-up demand because we haven't had phones for a while,'' Johnson said. ``Our goal is to always have enough supply for every customer.''

Consumers in the U.S. can buy an 8-gigabyte model for $199, or a 16-gigabyte version for $299 from Apple or AT&T, the exclusive U.S. wireless partner. The phone comes in black or white.

Sales Process

Apple, based in Cupertino, California, rose $4.39, or 2.5 percent, to $179.55 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have declined 9.4 percent this year.

To make sure customers aren't buying handsets to resell overseas or modify them for use on unauthorized wireless networks, Apple will require a credit card and Social Security number so the device can be activated immediately. Apple won't offer the iPhone 3G through its online store, Johnson said.

With the previous iPhone, customers could pay with cash or buy the device online. They weren't required to sign a contract with AT&T during the purchase.

As part of its Personal Setup service, Apple will help customers select a model, choose an AT&T service plan, and ensure that the device is ready to make calls, browse the Web and receive e-mail, Johnson said. Service plans from San Antonio- based AT&T, the largest U.S. phone company, start at $70 a month and require a two-year agreement.

Apple stores will handle about 30 customers at a time, Johnson said. While the company will make sure the activation process is quick, customers won't be rushed, he said.

``We'll spend as long as it takes with our customers to make sure they're happy with the phone,'' Johnson said.

IPhone Availability

Starting July 11, consumers will be able to check Apple's Web site to see the availability of iPhones at the company's stores, Johnson said.

AT&T outlets will also start selling the iPhone at 8 a.m. New customers can visit before July 11 to complete a credit check to speed the purchase process, AT&T spokesman Fletcher Cook said. Existing AT&T customers also can check to see whether they can upgrade to the iPhone.

The activation process should take 12 to 15 minutes, not including time spent in line, Cook said.