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AT&T Causes iPhone Pre-Order Frustration

AT&T is in the spotlight today after a slew of problems handling iPhone pre-orders. Is Verizon looking even more attractive to Apple?

DALLAS (

TheStreet

) --

AT&T

(T) - Get AT&T Inc. Report

is in the spotlight today after

consumers faced a slew of problems when attempting to place pre-orders

for the new

Apple

(AAPL) - Get Apple Inc. (AAPL) Report

iPhone 4

. Could AT&T's much-publicized problems make

Verizon

(VZ) - Get Verizon Communications Inc. Report

even more attractive to Apple as an iPhone partner?

Like Apple, AT&T began taking online pre-orders for the new iPhone yesterday, ahead of the phone's general availability on June 24. Many AT&T customers, however, were reportedly unable to reserve a phone and the telco has been slammed for the poor performance of its online ordering system.

Reports of security issues have also emerged -- the last thing AT&T needs after

the recent iPad security brouhaha

. Some iPhone purchasers were guided to other customers' accounts, said the

Wall Street Journal

, adding that the

Federal Trade Commission

is aware of the problem.

"We have received reports of customers inadvertently seeing thewrong account information during the iPhone 4 purchasing process," explained an AT&T spokesman in an email to

TheStreet

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. "We have been unable to replicate the issue, but the information displayed did not include call-detail records, social security numbers, or credit card information."

In the meantime, said the spokesman, AT&T is "looking into this matter."

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The timing of the pre-order snafu, however, could hardly be worse for AT&T. Repeatedly criticized for its network quality, there have been growing calls for Apple to end its exclusive iPhone deal with AT&T. With many consumers and investors desperate to see a CDMA iPhone capable of running on Verizon's network, this week's problems may push Apple closer to AT&T's arch-rival.

With its 90 million customers, Verizon would undoubtedly extend Apple's smartphone empire, and speculation about a Verizon iPhone has been unceasing. At the

recent iPhone 4 launch

, however, Apple made no mention of Verizon, which has been wielding its network coverage as a cudgel against AT&T.

For now, though, the dust has barely settled on what has been described as an iPhone pre-ordering fiasco.

A news report, for example, has claimed that AT&T did not perform adequate preparation of its pre-ordering system before it went live yesterday. The

Gizmodo Web site

, citing a source at an AT&T third-party processing facility, suggests that there was no testing of the new iPhone pre-order system.

The AT&T spokesman declined to comment on this possibility when contacted by

TheStreet

.

The telecom giant, however, still stands to win big from the iPhone 4, even after all the pre-ordering problems. AT&T has already described Tuesday as the busiest online sales day in the company's history and looks set to sell millions of the new iPhone. Investment bank UBS, for example, has even speculated that a million iPhones have been sold during the first day of pre-ordering. In contrast, it took Apple's iPhone 3S three days to reach the one million mark.

Even Apple struggled to cope with iPhone 4 pre-orders yesterday, underlining the phenomenal demand for the new phone, although the tech giant did not respond to

TheStreet's

request for comment.

Verizon, though, is waiting in the wings.

-- Reported by James Rogers in New York

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