Steps to recreate:

1. Set in the Settings -> General -> Passocode lock to enabled. This should lock the screen with a password and forbid any unauthorised access.
2. In Settings -> General -> Home Button, select Phone Favourites. When the home button is double clicked, the phone Favourites are displayed.
3. Sleep the phone and wake it up. Slide to Unlock.  Click on emergency call and double click on the Home button. WHAT! The phone favourites are displayed! Select to view details of a person and click on text messages. WHAT AGAIN! I can read, send and delete any message I want! Click on e-mail and you just got access to my corporate email!

So, what is the sollution? Set the  Settings -> General -> Home Button to Home Screen. That will disable the security hole...

Well done Apple on this one...........

Despite being there at 7.45, the queue in the O2 store was extending past the corner of the block. See for yourselves:

[View with PicLens]

If you have any common sense, three are the key questions to ask yourself before queuing:

1. How many people are there? Answer: Roughly 50.
2. OK, so how many phones are there? Answer: As O2 said, a couple of dozens, i.e. 20 to 30? Max 40?
3. So lets assume they have more. How many of them are the 16GB version? (I wouldn't upgrade 8GB and pay for it just for the 3G...)? Answer: Noone knows, but I assume around 1/3 of the phones, so roughly 10.

The math didn't look that good so I headed off. But it makes you wonder, what the heck are all these knobs doing at the queue when the reality is that they wont get a phone today?

Testing my luck, I've decided to drop by the Carphone Warehouse around the corner. Less people, around 20. So, lets queue here, better chances. However, it was already 8:15 and I had to go to work by 9:00... In the 10 minutes I've waited, none of the 5 customers that were in-store completed the contract. The process was taking to long and I'm definatelly not a queue person (I still remember jumping the two blocks queue when purchasing Leopard last year.. hehe). So I went inside and asked how many phones they got. Answer? Sixteen 8GB and four 16 GB, with all the 16GB being sold out... So waiting was over and was off  to work!

However, being an existing iPhone user I've managed to get the new software yesterday on the phone. And its fair to say that 90% of the new iPhone is the software. So existing iPhone users, don't be a knob and waste your time in the stores today, you wont find any phones and it probably is not worth upgrading as it will cost you... Moreover, what sort of business practice is having customers waiting but not products to sell them... So much lost profit for Apple. So you are able to use all the new features of the new phone now and that will probably make you think twice before opting in for an upgrade.

A little poll for today:

Watch this space for more on the new software after I play with it for a couple of days.

Update:

Apparently according to later reports the activation server crashed and the process took over 90 minutes per customer... So a day off work to buy the iPhone? Or a very mad manager

Lets start with the standard stuff... The new iPhone is, finally, 3G and has real GPS on it. The metal back is now replaced with a shiny plastic cover, slightly curved in the ends making the new model appear to be thinner. The "biggest" improvement is that it now comes in white. What? Yes, the expensive 16GB model has the option of a white back, with black face. What? Seems like an aesthetically challenged design, if you ask me. You either make the whole darn thing white, or keep it black... Oh well, some people wear rabbit ears with flashing lights on a Saturday night, so I guess its a matter of taste.

So, the phone is filling in the most important gaps of the previous model. So how much is this thing going to cost? Apple says, free. However, it's not as simple...

True, you can go to any O2 and Carphone Warehouse store and get it for free, provided that you sign a contract for 18 months on the £45 tariff. Sure, you get 1200 minutes and 500 texts, but who really talks that much on the phone? To use 1200 minutes you need to spend 40 minutes on the phone every day, which from my perspective requires considerable effort, especially as AIM, MSN and Skype are filling in most of our daily communication needs. (For the rest, there is always friends and a cappuccino ). All in all, the £45 contract will set you back £810.

So what is the next best option? £35 per month, which means that by the end of your contract, your bank account would have taken a £630 hit. Not bad... But, the phone is not free any more. The 8GB version costs £99. In reality, the £35 contract is more of a £40 contract if you factor in the cost of the phone, with a total outlay of £729 by the end of the 18 months.

Finally, there is a pathetic £30 contract, that only gives you 75 free minutes, compared to the 600 of the £35 tariff. You can also get it on Pay-as-you go, but using the phone for anything besides iTunes will cost you... Dearly... 

Lets open excel and plot the total cost of ownership and cancellation charges... (No one sticks around for 18 months...)

iPhone 8GB Total Cost of Ownership

Ok, so what does that mean? Until the 10th month the iPhone will cost you more on the £35 contract than on the £45. What happens if I want to cancel? Well, if you think that you wont last more than 10 months, then the £35 will cost you the least to get out of, whereas the difference is negligible with the £45 if you wait for a year. In absolute numbers, canceling your contract on the 12th month will cost you £210 on the £35 and £270 on the £45.

What happens with existing iPhone users? O2 has made a "special" offer for existing iPhone users. You can simply renew your existing contract and enjoy the same offers as a new iPhone user. Plus, your old iPhone is converted to Pay-as-you-Go. But what does that mean in terms of cost...?

Existing iPhone users - Total Cost of Ownership

Upgrade for free? It depends on your perspective... If you stick with the 18 month contract, upgrading will cost you nothing on the £45 contract, or £99 for the device on the £35 contract. If you changed to the £35 contract in May, when O2 doubled the talk time of the package, because 600 minutes are enough and you choose to upgrade to the £45 to get the device for "free", the device would cost you in the end almost twice as much than if you paid for it up-front, totaling £180...

Moreover, the moment you sign the renewal, you are increasing your cancellation cost by £450 for the £45 contract and £280 for the £35 contract. If you choose to end your contract on the 18th month, when your original contract was set to expire, you will end up paying for two and a third fully priced iPhones (£285 + £280 + £99). 

Reading between the lines of Apple's clever marketing, lie the financial facts. It's definitely not a free upgrade, nor the iPhone is free on the £45 tariff. So, weight your needs, understand the commitment and take the plunge... Or not?

Note: There is a poll embedded within this post, please visit the site to participate in this post's poll.

PS. The excel files used for the calculations can be found here.