Daniel Eran Dilger
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iPhone 3G sales hampered by Windows Mobile

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Prince McLean, AppleInsider
Sources within Apple’s retail stores report that sales of the iPhone 3G are being slowed down by handhelds running Microsoft Windows Mobile/WinCE. That’s because the stores have been selling new iPhones to customers using the old EasyPay, a problematic Pocket PC handheld computer that’s causing employees lots of grief.

iPhone 3G sales hampered by Windows Mobile
Apple began using the EasyPay devices in its retail stores in 2005. Ever since, management has been pushing to expand the use of the handheld systems, in part to deliver more personal service in stores commonly designed without a prominent check out area, as well as to provide flexibility in handling transactions for customers without requiring them to stand in checkout lines.

An initial report by Peter Burrows in BusinessWeek detailed Apple’s optimism for the devices back in 2005, explaining, “Steve Jobs believes that many people who are comfortable buying on-line — and that’s a rapidly growing percentage of the total — will not only accept but will actually prefer getting their receipts electronically. Also, the wireless, paperless checkout gives Apple an opportunity to improve in-store service, as well.”

In July, just prior to the iPhone 3G launch, Apple again reaffirmed confidence in its strategy to handle the heavy demand expected for the new phone by using the handheld EasyPay devices almost exclusively to complete purchases and in-store activations. The irony is that problems with the EasyPay devices’ clumsy software actually aggravated problems and resulted in slower moving lines.

The rollout of the iPhone 3G required US Apple Store employees to act as AT&T representatives in collecting data from customers and setting up their mobile activations right in the store. The EasyPay devices commonly turned a five minute process into at least a fifteen minute ordeal, according to sources familiar with the devices, severely reducing the number of customers each employee could help. That in turn resulted in extremely long lines that kept some iPhone 3G customers waiting for hours to get the new phone.

‘Huge old ugly pieces of junk’

It’s also ironic that Apple is relying upon handheld computers with a large Windows logo on the back to sell its iPhone, a handheld computer with an Apple logo on the back. Why isn’t Apple using its own technology? For starters, the iPhone project was only just beginning to come together in late 2005, after the company’s retail stores had already begun a successful pilot program using the Windows Mobile devices to ring up purchases. Apple’s roughly 200 retail stores likely stock fewer than 6,000 of the devices even counting replacement units, making it a costly venture to custom design a hardware solution that would replace such a small batch of commodity handheld terminals.

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The Apple Stores’ EasyPay units are Symbol PPT8800 Pocket PCs manufactured by Motorola and cost around $800 to $1000, although Apple probably pays significantly less than retail price for the devices. The unit itself connects to an external credit card reader, both of which have issues. “They are huge old ugly pieces of junk,” one user confessed. “I hate these things. In the middle of a transaction, I’ll hit ‘next’ and end up dumped back at the login screen. It’s so frustrating.”

For security reasons, the devices are configured to log out after two minutes of sitting idle. However, when they just log out spontaneously it then takes “a good two minute process to login,” one user lamented. Regular hardware failures and software reinstalls remove about three units from service per month, necessitating the need to keep a lot of extra units in stock. One insider said her retail store maintains roughly twice as many EasyPay systems as are needed in regular use.

‘What is it doing?’

Preparing an Apple Store in the morning requires a lengthy starting up session for the dozen or so EasyPay systems a typical retail store puts into use daily. Just turning them all on takes around fifteen minutes, even if several are done together in batches. “You have to boot it up in the morning, an eight minute process for each EasyPay that requires clicking a series of ‘OK’ buttons as it boots up Windows Mobile and then the EasyPay application. If you don’t click the buttons right, you end up at the WinCE desktop, with no way to manually start the EasyPay app,” one former Apple retail store employee reported. “You have to start all over.”

The units have an integrated barcode reader for identifying products without typing in their SKU, but “the barcode scanner takes five seconds to register,” complained one frustrated Apple Store employee in the busy retail flagship in downtown San Francisco. Once the purchased items are all entered, clicking on “tender” to add tax “takes forever,” another user familiar with the devices noted. “What is it doing? It’s just calculating the tax.”

In comparison, “Apple’s own POS [point of sale] application on Mac OS X flies,” according to a retail employee who has used both. Apple’s retail stores typically have a small number of stationary MacBook Pros to complete sales for users, but managers encourage employees to seek out customers who are waiting to make a purchase and help them with the handheld EasyPay systems.

“I don’t know why they don’t create an iPhone application for handling transactions,” one Apple store employee said. “The camera could act as a barcode reader, and Apple should be able to figure out how to build a USB interface for the credit card reader. It looks bad to be using these old clumsy things. Plus they’re PCs, and we advertise the whole Mac PC switcher thing.”

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  • fatbarstard

    Oh the irony…. however, it isn’t exactly easy to register a device as a handheld payments terminal because it needs to meet all the bank security requirements, and as far as I understand it some of the security requirements are hardware based (chips in the circuits)…

    So it isn’t easy to covert any device like an iPhone or an iPod Touch into a payments terminal because they will likely fail the security test.

    I imagine that Apple are tearing their hair out about this and trying to get a solution, but it won’t be easy…

    On the other hand Apple might play the double negative card as use the experience to remind people how crappy Windows CE/Mobile is… I can see the Get A Mac ad now….

  • jfatz

    They have plenty of money lying around to requisition their own specific alterations to the design, or to have an attachment made that has the chips they need and do some custom firmware/app adjustments to get things going.

    They really SHOULD, as I simultaneously think it cool that they can do all their checkout work right at your side next to the products, but bemused/irritated that their devices are so “anti-Apple” and don’t work quite right.

    Hell, it would serve as excellent advertisement if they could do everything on an iPhone anyway. Well worth the minimal cost to supply their stores.

  • hodari

    It is not completely the hardware issue or the OS. For the record WINCE.NET 5 is a very solid embedded OS. The primary problem is the application. In all the probablity it is the application that is badly writen that is causing grief.

    Having said that, these are old hand helds – very old infact. Apple should be using XTREME hand helds from C2E FZ LLC http://www.c2etek.com or the newer version of the hand helds from symbol such as MC70.

    Third for those who are not familiar with rugged devices. These are not any ordinary hand helds. They are military standards IP65 and IP67 certified such that they can with stand drops of upt 8 meters on concrete floor, they are waterproof and dust proof and there are only four major players in this arena.

  • harrywolf

    Handheld devices are not an elegant solution – more like a gimmick that doesnt really work well.

    If the employees are ‘wandering’ around the store looking for people to transact with, why not simply have more MacBook Pro workstations scattered around the store?

    This Windows handheld device is clearly junk, and it sounds to me as if the person who runs the Apple Store setup isnt really thinking clearly, or differently.

    As for the ONE incident where Apple were overwhelmed by the demand for iPhone 3G’s, this is more evidence that Apples’ brilliance in design and software doesnt always reach as far as the stores – as anyone will tell you who has dealt with the somewhat dubious ‘genius’ workers.

    “we may have a lot of people wanting iPhones – should we plan for that?” Duh.

    Anyway, 15 minutes to buy an iPhone isnt very long – is this really an issue?

    Get rid of the silly PC junk and employ a couple more people and a few more Macbook Pros – time for man-of-the-moment Eddie Cue to look at the Apple store situation?

    Time for Apple to employ some brighter retail people? Maybe.

    This leads back to Apple needing to employ a LOT more people – growth of 45% per annum would suggest that they are chronically understaffed, I would venture to guess…..lets not see any more MobileMe-style debacles, please.

  • rdamiani

    I dunno – I think the concept is wonderful, and the execution is (mostly) wonderful as well. That no other retailer has managed to almost completely do away with the sucky wait-in-line-at-the-register part of shopping makes shopping at an Apple Store a unique experience. After my first few trips, I wonder why more retailers aren’t doing it.

    Compare how painless the check-out process is at an Apple Store to a typical Best Buy or similar.

    Apple Store: Pretty much anyone who is on the floor can process your purchases. Even when it’s pretty busy, you can be in and out in a few minutes, and you can do the transaction with the same person you started talking to.

    Best Buy: of the dozens of people milling around, only that one guy in the front can take your money. You can’t deal with one person from start to finish, and most of the registers are closed most of the time, so in-and-out pretty much always takes a half-hour. If you are lucky.

    Shopping at an Apple Store is nicer than 90% of other retail experiences. Sure, it would be nice if the devices were easier for the employees to use, or were more reliable, or had Apple logos on them. It’s still better than anyone else has managed to do.

  • Tardis

    If “Apple’s own POS [point of sale] application on Mac OS X flies,” and stationary MacBook Pros can complete sales, then how about some MacBook Airs?

    “The camera could act as a barcode reader, and Apple should be able to … build a USB interface for the credit card reader.”

    OK, it’s not a “handheld”, but it’s as easy to carry around as a clipboard.

    Or is the problem with security on the wireless network?

  • jfatz

    @harrywolf

    You still need the barcode reader scanner, and plugging a USB device into whatever computer on the floor is handy would create its own special security issues, since they’re always open to public access. Plus, it’s just not INTERESTING to see someone use a computer like a register, nor does it keep your personal details private to you and the employee, since it effectively splashes it out to anyone on the floor looking your way.

    The handheld units don’t replace the regular registers anyway, they just make things instantly and remotely available, and seem to be pushed mainly when there’s a line at the registers anyway. The main problem is that they’re clunky.

    Whether or not Apple feels like doing it with custom iThings is beside the point… they just need the experience to be less clunky. Actually DOING it with an iPhone/iPod Touch is simply bonus marketing points.

  • Tardis

    Now that Daniel seems to have cornered the market on “telling it like it is” and blowing away the BS, on any commentary about Apple-related technology, does he still read his own stuff?

    The Daniel Eran Dilger commentary comes to us on both the Roughlydrafted site and Appleinsider. Both have comments and forums for each article, plus Dan the Man asks us to e-mail him with comments.

    In the bad old days, Dan would have to read the comment and put it up on the website. He would even reply to an e-mail. Now it all happens automatically, which is great.

    What isn’t great is that if I read an article on roughlydrafted.com it would show the first paragraph and then link to the full article, now at appleinsider.com If I post a comment to one, it does not appear on the other. If I email Dan, maybe one time in ten he replies. Maybe not.

    So how about a bit of sync.?