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Tuesday, July 08, 2008, 04:05 pm PT (07:05 pm ET)

O2 UK warns of weeks-long iPhone 3G shortage ahead

In a cautionary message to potential iPhone buyers, Britain's O2 says a rush of customers that brought down its online orders for iPhone 3G is a sign of a looming supply crunch that could last for weeks.

The complete message from O2 Sales Director Stephen Shurrock, obtained by AppleInsider, apologizes for the surge that knocked out its systems for ordering the Apple device and that it was the ratio of demand to actually supply that was to blame.

The company's early registration page wasn't just a notification service but a way passing on demand estimates to Apple, according to Shurrock: the users signed up at the site gave O2 reasons to ask for larger iPhone orders ahead of July 11th. With the number of registrants quickly spiraling out of control, however, it soon became clear that there would be many more orders than iPhones once advance purchases were an option.

"To put it in context we had over 200,000 people expressing interest and only a very small proportion of that number of devices available," he says. "Faced with this dilemma, we made it clear in the communications that to be fair to all customers the orders would be managed on a first come first served basis, as stock was limited. The response was so great that the online store completely sold out of iPhones within just a few hours."

Even with 250 times the performance capacity and backups in place, the online system collapsed after it received as many as 13,000 orders per second. "We just weren’t prepared for this unprecedented level of demand," Shurrock adds. "No website is."

Still, actual in-store supply may raise the most concern for O2 subscribers. Although the July 11th retail debut the next best chance to get an iPhone, each shop will have just a "few dozen" phones and is likely to run out quickly; with new stock coming in only once a week, the UK company isn't certain that it can accommodate everyone on launch.

"We are confident that over time we will start to get sufficient volume to meet demand, but it is likely that stock will be in very short supply for some weeks to come," Shurrock says.

The supply problems online and at retail are largely credited to the 22-nation simultaneous launch of the iPhone, which O2 says will spread stock thin. However, Apple retail head Ron Johnson has tried to allay concerns and says his company's goal is to always have stock — which O2's Shurrock says will be more prevalent at Apple's own retail locations.