Fans queue for iPhone, despite criticism

TOKYO/LONDON (Reuters) – Apple Inc's new iPhone went on sale in stores across the globe on Friday, prompting thousands to queue around city blocks to snap up the final gadget unveiled during Steve Jobs' life.

Shares of Apple rose 2 percent in early trading after queues wound down the streets of Sydney, Tokyo, London, Paris and Munich to get their hands on the iPhone 4S, despite criticism about the lack of a design revolution and reports of software glitches.

“I am a fan, a big fan. I want something to remember Steve Jobs by,” said Haruko Shiraishi, waiting patiently with her Yorkshire terrier Miu Miu at the end of an eight-block queue in Tokyo's smart Ginza shopping district.

In new York, some consumers got up early to buy the phone. While the line outside Apple's flagship Manhattan store no longer extended around the block after a half-hour of sales, more people joined it as the morning progressed.

The new model looks similar to the previous iPhone 4, but has an upgraded camera, faster processor, enhanced security and voice-activated software, which lets users ask the phone questions. The voice software drew glowing reviews.

“I had been thinking of this phone for a long time,” said Chad Bullar, 23, a new York University student who is buying the phone for its new messaging service and the voice software. “I was going to wait for the iPhone 5, but that seems like a year away, so I got this one.”

The phone — unveiled just a day before Jobs died — was initially dubbed a disappointment because it looks the same as the last iPhone. But anticipation of the “Siri” voice software helped it set a record with initial online orders on October 7.

Apple CEO Tim Cook and his executive team hope the first device sold without their visionary leader at the helm will protect the company against a growing challenge from the likes of archrival Samsung Electronics.

The South Korean company, which powers its phones with Google's Android software, expects to overtake Apple as the world's biggest smartphone vendor in terms of unit sales for the third quarter.

“(Jobs) made everything better and the products he released were thought through in such detail,” Duncan Hoare in London said, after a loud roar greeted the opening of the store. “It was about the beauty of something and the simplicity.”

Apple does not release sales on launch day, so gauging initial figures is difficult. however, it took more than 1 million online orders in the first 24 hours after its release, exceeding the 600,000 for the iPhone 4, which was sold in fewer countries initially.

“Despite the initial disappointment that this wasn't an iPhone 5, the reality is we're still seeing the usual frenzy that we've got used to on launch day,” analyst Ben Wood at CCS Insight told Reuters. Analysts expect global sales of a few million phones on the first weekend, he added.

Unlike many in Tokyo, shoppers in European cities told Reuters they wanted the phone because it was a “lifestyle choice” and not necessarily a tribute to Jobs.

“I need a new one since my dog destroyed my old 3GS,” said Gaby Wunder-Sambale, 45, shivering in Frankfurt.

Despite the enthusiasm at Apple stores, the launch was marred somewhat by widespread complaints this week on the Internet about problems downloading iOS 5, the latest version of Apple's mobile software.

There were also problems with iCloud, Apple's online communications, media storage and backup service formally launched on Wednesday, with users reporting glitches such as losing their email access.

Queues in Paris were smaller than those normally seen for a brand-new iPhone, with some fans there wondering if the somewhat underwhelming introduction had put people off, but in London and elsewhere the lines were as long as ever.

On Regent Street in central London, the queue wound down a side street and into a park, where Starbucks had a mobile stand to serve coffee. Of the 40 people to whom Reuters spoke in London, 13 were switching from other phones.

“This is rubbish,” one buyer at a north London store said, holding his Blackberry after owner Research in Motion struggled for days to fix an international outage of its email and messaging services.


The vast majority of the iPhone 4S buyers who Reuters interviewed in Sydney, France and Frankfurt were existing Apple customers, many having bought the original iPhone and subsequent upgrades.

“Since Jobs died, I wanted to make sure I had a new iPhone with some advantages over the old,” said iPhone devotee Mark Du, who expressed concern about future gadgets without Jobs in charge.

Apple fans in Sydney, Tokyo, Frankfurt and London made sure Jobs was part of the iPhone 4S launch, with flower, candle and photo shrines to the late Apple boss erected outside stores. A black-and-white picture of Jobs in Covent Garden carried the line, “Let's make a dent in the universe.”

Underscoring the enthusiasm for the new phone, Japanese mobile carrier Softbank Corp had to temporarily stop contract applications after its computer system was overwhelmed with more requests than it had expected.

Some analysts expect fourth-quarter iPhone shipments to reach 30 million or more, almost twice as many as a year ago.

Apple's fifth-generation iPhone uses chips from Qualcomm Inc, Toshiba and a host of smaller semiconductor companies, according to repair firm iFixit, which cracked the device open on Thursday.

The iPhone — seen as the gold standard for smartphones — is Apple's highest-margin product and accounts for 40 percent of its annual revenue.

Analysts point to several factors in Apple's favor: a $199 price that matches up well with rival devices; availability promised on more than 100 carriers by the end of 2011, far more than its predecessors; and glowing reviews.

Apple shares were up 2 percent at $415.56 in early trading.

(Additional reporting by Michael Perry in SYDNEY, Edwin Chan in LOS ANGELES, Isabel Reynolds in TOKYO, Marie Mawad in PARIS, Jens Hack in MUNICH, Christoph Steitz in FRANKFURT and Giles Elgood, Matt Cowan and Kate Holton in LONDON, Liana B. Baker in NEW YORK; Editing by Mark Bendeich, Alex Richardson, Sophie Walker)