iPhone Supplies Dry Up as World Waits for 3G

The Cupertino, Calif.-based company confirmed that the iPhone is out of stock online, but added that brick-and-mortar stores run by Apple and iPhone carriers, including AT&T (NYSE: T) , might still have units available. Apple has been known for clearing out its inventory of a certain product ahead of a major upgrade.

Apple spokesperson Natalie Kerris declined to comment on reasons for the shortage and on Apple's plans for an update to the device, which is widely expected to be unveiled in June at Apple's Worldwide Developers Conference in San Francisco.

The paucity of iPhones for sale in some markets comes as Apple is hustling to meet its goal of selling 10 million of the hybrid iPod-cell phone-Internet surfing gadgets by the end of 2008. So far, Apple has sold 5.4 million iPhones, according to the latest data as of the end of March.

Loosening Its Grip

One way Apple is expanding the iPhone's reach is by inking deals with wireless carriers around the world, even breaking with its pattern of requiring exclusivity to sell in a certain country.

On Monday, four mobile providers in the Asia-Pacific region announced partnerships with Apple to bring the iPhone to their regions later this year.

SingTel will sell the gadget in Singapore, Bharti Airtel in India, Globe Telecom in the Philippines and Optus in Australia, the companies said in a brief joint statement, without giving details.

SingTel owns Optus and holds a 30.5 percent stake in Bharti and 44.5 percent in Globe.

SingTel has about 2.3 million mobile subscribers in Singapore and around 7 million in Australia, according to data as of Dec. 31, 2007. Bharti currently has about 64 million subscribers, while Globe reported a 21.3 million mobile subscriber base for the quarter ended March 31.

Global Reach

Last week, the top mobile phone operator in Latin America, America Movil SAB, also announced plans to deliver the iPhone to its region. America Movil has 159.2 million subscribers in 16 countries, including Argentina, Brazil, Chile, Colombia and Mexico.

In recent weeks Apple has also signed deals with Rogers Communications to sell the device in Canada; Milan-based Telecom Italia SpA to sell the iPhone in Italy; and Vodafone Group (NYSE: VOD) , the world's biggest mobile company by sales, to sell it in a total of 10 countries, including Australia, India, Italy and Turkey.

Until the spate of the latest deals, Apple adhered to its policy of exclusivity with one carrier in each country.

The exclusive deals for the iPhone were with AT&T in the United States, O2 in Britain, T-Mobile in Germany and France Telecom's (NYSE: FTE) Orange wireless arm in France.

Industry observers say some people may be holding off on buying an iPhone until the much-rumored next-generation of the device is launched and the phone is officially rolled out in more countries.

It takes some technical gymnastics, but it's still possible to get the phone in some markets where Apple doesn't have arrangements with wireless carriers.

Many of the phones sold so far have been bought legitimately in one country, modified to work on any cellular network , and resold in countries where Apple doesn't have agreements to sell the iPhone. The trend expands the iPhone's reach but deprives Apple of some of the subscriber fees that Apple splits with its carrier partners.

Dial-Up on Your iPhone

Another knock against the iPhone's current design is that it works over so-called 2.5G networks instead of the faster 3G , or third-generation, cell phone networks, which are popular outside the U.S. The difference in performance is similar to a dial-up Internet connection versus a high-speed broadband connection.

Apple's chief executive, Steve Jobs, has said Apple went with the slower cellular technology because the chips for 3G networks were too bulky and power-hungry when the iPhone was being designed, and because the iPhone automatically switches to faster WiFi networks when they're available.

The next generation of iPhones is expected to work over 3G networks, which makes tasks like downloading videos easier.

Apple is also planning a software update for this summer that makes the iPhone work better with corporate e-mail , a necessary upgrade to help the iPhone compete with Research in Motion's BlackBerry and Palm's (Nasdaq: PALM) Treo smartphones.

Girding for a fight with Apple in the business-oriented smartphone space, Research In Motion (Nasdaq: RIMM) on Monday unveiled the Bold, its first BlackBerry model to work over 3G, helping its shares climb to an all-time high of US$143.08. The stock closed Monday up $9.20, or 6.9 percent, at $141.97.

Apple shares closed up $4.71, or 2.6 percent, at $188.16.