Some iPhone customers put on hold

As iPhone supply finally starts to dwindle, reports emerge of problems with the device's activation process.

Getting one of Apple's iPhones during the launch weekend was easier than expected. Getting it to work, however, was a different story for some customers.

Apple stores finally started to run out of the coveted device Sunday. An employee at the Apple store in downtown San Francisco said all of their iPhones were gone early Sunday afternoon, but he said he was expecting a shipment Monday morning. AT&T stores were mostly out of iPhones on Saturday. The pause in iPhone sales might give Apple and AT&T time to catch up with the activation issues that bedeviled some iPhone customers over the weekend. (CNET Review: Apple iPhone (8GB).)

Apple and AT&T unveiled an innovative activation scheme with the iPhone launch. Usually, activating a new cell phone means spending almost an hour or so in a wireless store as the sales representative lights up the phone. But with the long lines expected last Friday, Apple came up with a way to use iTunes to connect to AT&T's activation process so iPhone customers could set up the device at home.

However, several glitches were reported with the system on Saturday and Sunday as new iPhone owners grew frustrated waiting for activation. At times the system seemed overwhelmed by the sheer volume of those trying to active their new iPhones. Those customers setting up new numbers with AT&T appeared to have fewer problems than existing AT&T customers, based on comments on Apple's support discussion and on message boards elsewhere.

"The vast majority of iPhone users are completing their activation on the iTunes side in a few minutes and without a hitch," said Mark Siegel, a spokesman for AT&T's wireless business. "But we do have some customers who are having issues with activation."

Activation was supposed to be a snap: Customers hook up the iPhone to a Mac or PC with the latest version of iTunes installed, and the software automatically walks them through the process. After entering a credit card number and selecting a rate plan, the system was supposed to send an e-mail confirming the iPhone had been activated.

But waiting for that e-mail turned into a frustrating experience for some iPhone customers.

"There are a small percentage of iPhone customers who have had a less-than-perfect activation experience. We're working hard to resolve any issues quickly," Natalie Kerris, an Apple spokeswoman, said via e-mail.

Software from a company called Synchronoss was used to process the activation transaction, according to its Web site. E-mails with updates on the activation process were sent from the company's servers to iPhone owners. An e-mail inquiry to the company was not immediately returned.

A common problem appeared to be existing AT&T customers who were trying to transfer an existing account that was receiving some sort of business discount, even if it was just a few dollars, Siegel said. Both Apple and AT&T had warned customers they couldn't use business accounts with the iPhone prior to launch, but it was possible to go through the activation process and not know that was the issue until a customer service representative was contacted about the delay.

AT&T needed to contact individual businesses if someone was trying to switch from a business account to a personal account, and since the launch took place on a weekend, getting in touch with the telecom manager at a business could be difficult, Siegel said.

Other iPhone owners on Apple's Web site reported problems with the SIM (subscriber identity module) cards inside their iPhones. SIM cards hold information unique to a mobile phone account and allow users to easily switch between phones while keeping their numbers and contacts--except on the iPhone, which uses a SIM card that works only with the iPhone.

It seemed that the activation system was unable to recognize the SIM cards in some iPhones, which led it to bypass the activation screen and move straight into syncing music, movies and contacts. One user reported that his local AT&T store switched the SIM card that originally came with his iPhone for a new one, fixing the problem. Others said they had done the same thing.

AT&T's Siegel said he was unaware of any issues involving the iPhone's SIM card.

The problems were exacerbated by the fact that frustrated users couldn't test the other features of their iPhone while waiting for activation to set in, even though Apple's iPhone guide said otherwise. Waiting for what some termed an expensive "iBrick" to light up was not much fun, especially for those that waited in long lines on Friday.

Otherwise, there appeared to be few complaints from those who didn't have problems with activation, or from those who were experiencing other problems. There was lots of activity on Apple's discussion boards related to the iPhone, but the activation issues seemed to be the only widespread problem.

CNET News.com's Declan McCullagh contributed to this report.

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