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Apple finally sells iPhone 3G online

Move may be an inventory-clearing measure as new models near, says analyst

May 14, 2009 12:43 PM ET

Computerworld - Apple on Wednesday started selling its iPhone 3G online, the first time in a year that consumers have been able to get their hands on the device without making a trip to an Apple retail store or buying from AT&T.

Only customers new to the mobile carrier, however, can complete the entire purchasing process online.

"Apple always wants to drive sales, and they're probably also clearing out inventory," said Ezra Gottheil, an analyst for Technology Business Research. Apple sold the first-generation iPhone online -- as well as at retail -- from June 2007 to when supplies were exhausted in May 2008 and let buyers activate the device using iTunes. But when the iPhone 3G debuted last July, it was sold only at Apple and AT&T retail outlets, where it was activated before the customer left the store. That move was prompted, most analysts agreed, by the extensive "jailbreaking" of the original iPhone, and the corresponding revenue loss to AT&T.

In September 2008, however, Apple let customers reserve an iPhone 3G online, then head to a store to pick it up and activate the phone. AT&T followed suit in December by selling iPhone 3Gs online, letting users activate it later -- and at home -- for the first time.

In lieu of online ordering of the iPhone during last year's holiday selling season, Apple only had iPhone gift cards to offer.

The new online order page warns consumers that only customers new to AT&T can complete the process entirely online, and tells people with existing AT&T accounts that they will still need to pick up the device at an Apple store.

"The move also might be connected to the rumors, which sound logical, that Apple and AT&T will swing some kind of plan price reduction," added Gottheil, linking the new online availability to an inventory-clearance move by Apple.

In the first calendar quarter of 2009, Apple sold 3.8 million iPhones, a number significantly higher than many analysts' projections.

Apple, which previewed iPhone 3.0 in March, is expected to introduce one or more new iPhone models this summer, perhaps as early as June 8 when the company kicks off its annual developers conference.

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