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The Globe and Mail

It's getting hard to find an iPhone in Canada

Montreal shoppers check out iPhones at a downtown store, Oct.28, 2008.

John Morstad/John Morstad/THE GLOBE AND MAIL

It's been in the spotlight more than almost any other product of the information age, but the iPhone is becoming hard to find in Canada.

Apple Inc. is shipping limited supplies of its smart phone to Rogers Communications Inc., the only Canadian wireless operator able to carry the device, as the California company scrambles to try to meet global demand that appears to have exceeded its own forecasts.

Rogers is advising shoppers that it is out of stock of Apple's latest device, the iPhone 3GS, which was launched in June, as well as earlier models introduced last summer. The wireless carrier is telling visitors to its website that the newest device will be available again in the coming weeks. Rogers' discount brand, Fido, is also out of stock, although some Fido stores said they had older devices, with significantly less memory, available.

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Liz Hamilton, a spokeswoman for Rogers, said the iPhone remains popular and demand is high. "We are out of stock and still taking orders as our inventory continues to come in week to week," she said. "While we have continuous incoming inventory, we are filling back orders on a priority basis and we appreciate the enthusiasm and patience of our customers."

Phone companies around the world have been adjusting to the shortage, and some markets, such as Australia, said this month their supply of iPhones had been exhausted.

Apple, however, is still finding ways to keep supply flowing in certain places. AT&T Inc., the exclusive carrier of the iPhone in the U.S., is still selling the device - although it warns delivery time can take seven to 14 days. "I don't think Apple has been able to anticipate this demand and I think it has been caught somewhat off-guard," said Kevin Restivo, senior analyst for mobility at IDC Canada.

On a conference call with analysts last month, Apple's chief operating officer, Tim Cook, said the company was unable to keep up with demand in most countries, after selling more than one million units of the 3GS model in the first three days of its release.

"If you're in short supply and the smart-phone companies are [fighting]it out in a war, you want to protect your beachhead. You want to be able to fight the battle in the most important areas of the world, and quite frankly that's the United States. You've got to reserve your supply for the biggest battle grounds," Mr. Restivo said. "Rogers can't be thrilled about the supply situation."

Simon Atkins, a spokesman for Apple, declined to talk about the product shortage or how the company allocates supply.

The one place Canadian shoppers can still find a new iPhone is at one of Apple's own stores.

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The company runs 11 retail outlets across the country and some of them say they have models available - but consumers are required to go online to book an in-store appointment.

It's unlikely that Apple receives more money per unit sold within its own stores than through Rogers, but by holding back inventory for its own retailers, the company is able to showcase other products and in many cases sell customers extra equipment or software, Mr. Restivo said.

Phones sold from the Apple store work only on the Rogers network in Canada.

By the end of the year, however, rivals Bell Canada and Telus Corp. are expected to have completed an update of their wireless networks to a standard that supports the device.

For now, Rogers needs to get its hands on as many iPhones as it can. Last quarter, it posted a 3-per-cent decline in revenue from customers with wireless contracts. Smart phones, such as the iPhone and Research In Motion Ltd.'s BlackBerry lineup, generate about 11/2 times as much revenue for Rogers as do regular cellphones.

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