3G iPhone debuts, cost, rigid agreements irk buyers

TOKYO/WELLINGTON, JAPAN/NEW ZEALAND: Apple's new iPhone made a glitzy debut on Friday as frenetic buyers in New Zealand and Japan, some of whom had camped in line for days, stormed outlets to get their hands on the gadget.

The new iPhone -- a music and video player, cell phone and Web terminal in one -- is an updated version of the original that sold to 270,000 people within days of its June 2007 launch.

After New Zealand and Japan, the sales of the 3G iPhone will roll out to more than 20 countries across the globe.

Several hundred people waited outside Vodafone shops in New Zealand's three main cities, supplied with music, food and entertainment, before a spirited countdown saw the first person in the world politely ushered through the door to the counter.

"I'm going to put this on charge, have a play around with it and have a nice long sleep," said 22-year-old Auckland student Jonny Gladwell, who queued in freezing temperatures for around 60 hours to be the first to buy it, at a minute past midnight.

A Vodafone New Zealand spokeswoman said more than 400 phones were sold in early morning trade.

Softbank Corp which sells the iPhone in Japan, said over 1,500 people lined up outside its flagship store in Tokyo just before its launch.

Analysts expect the new iPhone to draw as many as 10.5 million buyers worldwide this year and -- with 6 million of the older devices already in use -- help Apple beat its target to sell 10 million iPhones by the end of 2008.

The next-generation iPhone is the first taste for Asian consumers of the multimedia device, with earlier models only available in the Unites States and Europe.

The gadget has faster Web links than the first iPhone, supports third-party software like games and instant messaging and is heavily subsidized by a coterie of phone carriers, some of which are giving it away to lure new users.

Tokyo Buzz

Queues formed in the pre-designated Asian markets as early as Wednesday. In London and Hong Kong, carriers were swamped by tens of thousands of online applications.

In Tokyo, the street in front of the Softbank shop was jam-packed with iPhone fans and media, with staff and angry policemen shouting to make space for passers-by.

The flagship store started selling the phone at 7:00 a.m. (6 p.m. EDT), after the crowd was asked to practice the countdown three times. The sales will expand to stores nationwide at noon.

Shiho Hishida, a 33-year-old Web designer from Chiba, east of Tokyo, said the monthly fees of over 8,000 yen are expensive, but was happy to snap up an iPhone as she had been wanting one since the launch of the previous model.

"I have three kids, but I pleaded with my husband to let me come out for this," said Hishida, who joined the queue late Thursday. "The interface, functionality, touch panel -- it is just like OS X, and I don't feel awkward using this."

Despite the buzz, some analysts are skeptical about the iPhone's prospects.

Many doubt the device will be popular among mainstream customers in Japan, Asia's largest retail market, as it does not support the television services or electronic payment features so widely used in the country.

Others point to a large and vibrant grey market of fakes or "unlocked" phones -- hacked to work on other carriers' networks -- in China and Southeast Asia, which is expected to cannibalize demand.

There have also been complaints about high rates and rigid agreements.

To help safeguard revenue, many carriers are making buyers of subsidized iPhones commit to contracts they cannot break without a penalty, to discourage them from unlocking the phone to work on other networks.