Why We Love Apple and Hate AT&T

Most readers of this blog know that I'm a huge Apple fan.  So you won't be surprised to learn that in spite of my ongoing battle with AT&T I was lined up with hundreds of others outside an AT&T store in Colorado Springs early Friday morning in an attempt to be one of the first owners of the new iPhone 3G.

As we got closer to the assigned hour (8 a.m.) the store manager kept walking down the line and counting the people.  Each time she seemed to be more and more concerned.  A rumor started circulating that the store had only 50 iPhones available.  Sure that this wasn't the case, I used my Blackberry to email my new friend in AT&T's President's office and received an almost instantaneous response: "I would be shocked and amazed if any store ran out on the first day.  My understanding is that all stores including Apple stores, would be fully stocked. Let me know if you find out otherwise."  I breathed a sigh of relief and assured those in line around me that the rumor couldn't be true...the highest office at AT&T had told me we'd all be getting phones.

Once the line started moving and the first group of customers were inside the store I decided to go up to the front of the line and talk to a store manager myself.  A man who identified himself as the "Market Manager" was standing at the door looking stressed...so I asked him if the rumor was true.  He told me that he didn't know how many phones they had and if he did he wouldn't be allowed to share that information.  While this didn't make much sense it satisfied me that he hadn't told anyone there were only 50 phones so I went back to my place in line.

Then, at about 8:15, the police cars arrived.  Two squad cars sped up to the front of the store and the officers got out and stood by the entrance.  The store manager, a young women, came out and stood with the officers beside her.  The crowd fell silent as she announced that they had only 6 phones left.  They had started the day with only 40 phones.  She told us that any one else in line would be allowed to place a "direct fulfillment" order and would receive their phones in 7-10 days.  Then she dropped the bombshell...she announced that they were expecting another shipment of phones the next morning and they would be available on a first come first served basis.  She suggested lining up again on Saturday morning for a chance to get those phones.

I got on the phone to my contact at AT&T's Office of the President and he seemed shocked that any AT&T store had started the day with so few phones. He asked me to hold while he called other AT&T stores in the area to see if he could find a phone for me.  He came back on the line after a few minutes and sheepishly admitted that every store he had been able to reach was in the same boat.  They had each started the day with less than 50 phones and sold out in less than half an hour.  He then offered to check stores in a wider area for me...and found out the same thing...they had sold out as well.  He assured me that no one in his office knew that the stores were going to be so short of phones.  Then he asked me to hold  while he called the Apple Store in Denver for me...he came back on the line and told me that the Apple store had huge lines but the store manager was sure they had plenty of phones for everyone.

So, I decided to drive to Denver.  Two hours later when I arrived at the Flat Irons Mall the line to get into the Apple Store was so long that it stretched out of the air conditioned mall and into an outdoor courtyard.  As I chatted with those in line a similar pattern emerged. Pretty much everyone in line at this point had been at an AT&T store that had run out of phones...no one was happy with AT&T.  But here at Apple, things were different.

The atmosphere in line was almost party like.  Even though most of those in line with me had already had a disappointing morning there was a shared anticipation of the payoff to come.  Apple store employees came by every half hour or so with status updates and bottled water.  They assured us they had plenty of phones and apologized that the line was moving so slowly due to the AT&T activation process.  After I'd been in line for an hour an Apple store manager came by with cold Starbucks drinks for everyone.  It was really clear that the Apple employees were happy to see us and understood that we were sacrificing our day to be part of their product launch. 

I was in line for five hours before I reached the store entrance. As I waited in the short line inside the store one of the managers came up and asked if I was an existing AT&T customer.  I told him that I was and briefly explained my unfortunate situation.  He asked me if customer service had been able to sort out my problem since he had heard stories from other's in line who had the same issue and AT&T customer service managers had issued them credits.  I told him that I had been in contact with the "Office of the President" of AT&T and that they refused to help me.  At this point the manager gave me a heartfelt apology.  He told me that he was so sorry that AT&T treated customers that way and that it was really unfortunate that Apple's partner for the iPhone didn't value customers in the same way that Apple does.  Here's the thing...I believe he really meant it.  It wasn't patronizing...it was a heartfelt apology.  He then introduced me to another employee and told that employee "look after this guy...he's had long day and he's a really important customer."  Ten minutes later I walked out of the Apple Store with two shiny new iPhones.

So here's my rant:

Is it just me or did AT&T have weeks if not months to prepare for the iPhone launch.  The fact that additional phones had already been shipped with a scheduled delivery date the day after the iPhone launch points clearly to a planned shortage. Did AT&T really want all their stores to run out of phones on the morning of the launch?  Did they think that "selling out" of the iPhone would be good for publicity?  What about the hundred's of customers who spent hours in line only to discover that they were being used as pawns in AT&T's marketing strategy.

As Seth Godin points out in his post yesterday on Scarcity: "The danger [with creating false scarcity] is that you can kill long-term loyalty. You can annoy your best customers. You can spread negative word of mouth. You can train people to hate your scarcity strategy (Apple did all four this weekend)."  Unlike Seth I don't blame Apple for what happened.  The vast majority of folks in line at the Apple Stores were people who had already tried to purchase an iPhone at an AT&T store.  I think the blame lies firmly with AT&T...and that's why the only real problem with the iPhone is AT&T.

The day before the iPhone launch, after hearing my story, the manager of AT&T's "Office of the President" told me that he would love to help me but even he had to follow policy and he refused to issue me a credit.  I was hoping that if I was able to reach someone high enough at AT&T that they would do what they all agree is the right thing and fix my problem.  However, he proved beyond a shadow of a doubt that at AT&T policies comes before people.

In spite of this, because I love Apple, I took 12 hours out of my day to get my hands on a pair of iPhones.

Was it worth it? Yes, I love the iPhone...its probably the best electronic device I've owned.  But after my ongoing challenges with AT&T, unfortunately its bittersweet.

What can we learn from this?

We love Apple because we believe that Apple respects us as customers and as people...we hate AT&T because their actions show they don't. 

So, how do your customers feel about you?

Update: Here's a great post on Consumerist.com that illustrates how Apple bends over backwards to help customers who are having challenges with AT&T.

 

Comments

[Richard]

Do you have have any evidence suggesting that these AT&T stores had any choice about how many phones there were able to get in stock?

Just curious, you seem awful quick to blame AT&T here but don't actually offer anything to back up the claim that it's their fault. Even the article you link on TechCrunch is about an AT&T manager unable to sell his stock due to contractual obligations to Apple.

AT&T is big and evil I won't argue that but I think there are two evil corporations at work here.

[Jon Dale]

Richard,

I'm not accusing the individual stores of anything here. I'm simply accusing AT&T at the corporate level of making some really bad business decisions. Is it possible that Apple played a part in this...sure, it's possible. But my experience with Apple says that its less likely. In general I find that Apple has a culture of taking care of its customers...AT&T, not so much.

The techcrunch story is the only reference I've found to a store with inventory that refused to sell phones. Both AT&T and Apple at the store level seem to have been quick to blame the other for issues. I think the blame lies at a much higher level.

Thanks so much for your comments.

[Molly]

I used to be a customer of AT&T and due to their customer service, I will not go back. I would give my eyeteeth to have an iPhone, however, as long as Apple has a relationship with AT&T-that won't happen in this household.

Given the reputation that AT&T has, I wonder if Apple really DOES value their client base joining forces with a company that seriously lacks in the service department...

[Ramon Antonio Parada]

Feels weird that here in Spain happened exactly the same thing. Weird that Telefonica had the same strategy than AT&T without Apple suggesting or forcing it.

Nobody considers Apple responsible of this but its commercial agreements with phone companies are unknown.

[Jason D]

wasn't it apple who released the first iPhone at some ridiculous price and within months dropped it significantly -- essentially giving the middle finger to it's early adopters (AKA loyal fans) and it took a public shamefest to get them to issue credits?

I'd say in this instance your more than an apple fan, you're an apple apologist. They planned this shortage. The fact that you had to go all over kingdom come to get a product that should've been in stock is a testament. If apple was taking care of it's customers, it would've insisted ATT have more than 40 phones per store.