iPhone 3G gives international visitors an iHeadache

Valentyn Bannikov, 19, said he'll excited to get his hands on the iPhone 3G Friday even though Apple Inc.'s latest attempt at a cellular device comes only a year after its initial foray into the mobile phone market.

But promises of a next generation phone that is advertised as "twice as fast" for "half the price" piqued Bannikov's interest. "It's unusual and different from other telephones. I might wait in line tomorrow if I have time for it," he said.

Bannikov's wait may be longer than he realizes if the Ukranian native wants to buy the iPhone 3G at the Michigan Avenue store in Chicago instead of waiting to purchase it when he returns home to Europe.

According to Apple's Web site, and various press releases from the Steve Jobs conglomerate and ATT Inc., in order to purchase an iPhone 3G in the US "qualifying customers" must purchase a new two-year service contract with ATT. This poses a big problem for international visitors who want to buy the touch screen phenomenon here and bring it back to their country.

"A foreigner cannot buy any iPhone [in the US] because it's bound to the contract of the telephone company," said Mory Claude who is here on business from Switzerland and inquired about picking one up. "Even if you have friends here, relatives in the states, you can't even tell them to buy one in your name. It's not possible."

The process of getting an iPhone is a detailed one filled with credit checks and service activation. Apple phone fans have to bring a credit card, social security number and a government-issued photo ID with them in order to purchase a handset and get it up and running by the time they walk out the door.

According to Apple, the iPhone 3G is being released in 21 other countries tomorrow and available in more than 70 by later this year, so why is inter-country purchasing more difficult? The answer may be in the price-tag.

The suggested retail price of an iPhone 3G is $199 USD for an 8 gigabyte version and $299 USD for its 16 gigabyte alternative. Though these prices will be offered similarly in other countries the weakening of the U.S. dollar actually makes the iPhone 3G cheaper for foreigners to buy here than in other countries, especially in Europe.

"Mobile phones, iPhones, are very expensive in Germany, so we're looking here for cheaper versions here," said Daniel Babczyc, 20. He and his brother Adrian are visiting Chicago while their father is on a business trip. They said they were shocked by the steep price difference compared to back home.

So, while Apple is welcoming the international market, they have stepped up their effort to guard against profit loss by reducing incentives for global importers to buy U.S. iPhone 3G phones and re-sell them in Europe by using restrictions such as in-store activation.

In the end even Chicago residents are caught up in the red-tape. Vanessa Nieves, 25, has T-Mobile USA Inc. as her service provider and would like to keep it that way.

"I want to have mine unlocked so T-Mobile can do something with it. I don't know if I can get it tomorrow," she said.

Dorothy Perry, a visitor from San Francisco said she intends to go back to the Michigan Avenue Apple store Friday to get her phone, but "I'd rather that it weren't just tied to ATT. I'd rather be able to keep using my same carrier."

Lucky for Perry ATT recently announced it would offer the contract-free version of the iPhone but at a hiked price in this country of $599 and $699 "in the future."

And that won't help Bannikov whose reason for not purchasing the iPhone last year was price. "In my country it cost much more money than I can afford. I'll keep waiting until I can get it here," he said.