After a lot of hype and a controversy over price, the iPhone comes to Canada

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(The Canadian Press)

By Lyndsie Bourgon, The Canadian Press

About 70 people gathered in the early morning hours outside a Halifax mall to be the first in Canada to buy Apple's iPhone.

The mobile phone lets users play music, watch video, surf the Internet and check their e-mail.

Some people in the line said they had arrived as early as 2 a.m. to beat the expected rush.

Christian Meagher, 29, a worker at the Halifax Casino, was among the earliest of the arrivals.

He said he decided to make his purchase after hearing that the exclusive Canadian carrier, Rogers Wireless (TSX: RCI-B.TO), had lowered the iPhone's data price to $30 a month for a limited time just days before the launch.

"That's 100 per cent of the reason I'm here today," said Meagher. "It was fairly ridiculous before."

Officials at the Halifax store said they expected crowds to grow as the day moved along.

They handed out numbered tickets to the people who had assembled ahead of the doors opening.

"I feel kind of lame, but kind of awesome all at the same time," said Meagher.

"I think it will be cool, but I think a lot of people are making a bigger deal than need be right now. It's just a phone, a cool phone, but just a phone."

Rogers Wireless hasn't said how many iPhones it has received to sell in Canada or would like to sell here, but has said it has sufficient inventory.

Apple has said it hopes to sell 10 million iPhones worldwide by the end of this year.

Select Rogers stores are opening up at 8 a.m. local time to sell iPhones in Toronto, Montreal, Vancouver, Ottawa, Calgary and Halifax.

Analysts said that while there's pent-up demand for the high-end, touch-screen phone, only a small segment of consumers will buy it because of the costs associated with running it.

"The average person is going to look at this thing and say, 'Very cool, very nice phone,' but am I willing to spend the money for a three-year contract at probably $70 to $80 a month minimum when you talk about voice and data," said U.S. telecom analyst Jack Gold of J. Gold Associates in Northborough, Mass.

"That's a significant amount of money ... This thing is an extra $40 to $50 a month over three years. You do the math. It's a lot of money."

The iPhone now sells for $200, less than half its price a year ago when the first generation of the device was launched in the United States.

Rogers has the only Canadian network capable of running the new, faster iPhone. The $30 data fee applies to Web browsing, email and video on a three-year contract for customers who activate by Aug. 31.

The iPhone uses 3G wireless technology on a GSM network, which is widely used in Europe and Asia, comprising about 70 per cent of the global market.

Analyst Carmi Levy said Apple Inc.'s products generate a lot of buzz but that doesn't always translate into sales.

Apple is a master at creating "aspirational buzz," said Levy of Toronto's AR Communications Inc.

Research In Motion's (RIM: TSX) BlackBerry and Apple's iPhone are competing against each other, and other smartphone makers, in both the consumer and business markets.