When Apple first announced that as many as 250,000 were sold to people with the intention of unlocking them, I thought those numbers were a little bit off, but after thinking about it, Apple has a very easy way to know how many were sold to unlockers, and that would be by comparing it to the number of activations on AT&T's network to the number that had been sold. Apple gets a decent amount of change from AT&T for each AT&T subscriber, so Apple would have access to both the number of iPhones sold, and the number of subscribers. Whatever number is left over must be the number of iPhones that are unlocked and running on other carriers, which, as revealed in the post-earnings conference call may number as high as 250,000. To clarify, these are not unlocked iPhones, merely unactivated iPhones, and as such, Apple isn't enjoying the nice kickback from AT&T ($20 per iPhone, per month) on these unactivated iPhones.
Shortly after the number of unlocked iPhones were announced, Apple announced that the new Apple Store policy would be to stop accepting cash/gift cards for iPhones. Then I read this story about three guys who flew in from Amsterdam to bring 15 iPhones back with them using the 5 iPhones per person limit (from the San Francisco Apple Store), and another story about a ZD editor going into Apple undercover and attempting to purchase the iPhone with cash after the credit card rule went into effect. Apple has said it's a maneuver to prevent resellers from purchasing iPhones, as well as to try and ensure enough stock in the stores for the holidays.
Even so, I've started to put several of the pieces of the puzzle together.
Apple's iTunes Store, restricts music purchases only to people living in that country. If I want to say purchase a Japanese track off the Japanese iTunes store, I can't do it, as it checks my address and my credit card, and says "You're not living in Japan, you can't download this digital file". But, if I purchase a Japanese iTunes card, I can go ahead and purchase my song. I have a feeling this is likely going to be the same way it works with iPhones soon. With the launch of the iPhone soon in Europe, Apple has to clamp down on resellers and tourists in the United States who are turning a tidy profit by purchasing iPhones in the US and shipping them overseas. Were this a Mac or a normal iPod, Apple wouldn't care -- they can deny warranty service if the device ever comes into their hands, and there are plenty of other people/businesses out there who would fix a broken Mac or iPod. However, by controlling the point of purchase, you can limit the number bring exported, simply by checking whether or not the credit card is an American credit card, and whether or not they've made purchases of iPhones recently.
A good deal of Apple's money comes from the deal with their partner carrier. For AT&T in the United States, this amounts to $20 a month, a tidy $480 for the length of the 2-year contract. As the iPhone rolls out internationally, Apple turns a huge profit on the iPhone. If Apple has to deal with a quarter of all buyers who intend on unlocking their iPhone, Apple will be able to meet their sales goal, but their profits will suffer considerably.
Apple's iPhone requires syncing with iTunes to download playlists, and is returned to it's cradle every so often to charge, iTunes also manages the iPhone updates, and with each update, the iPhone is able to become relocked. If it becomes too troublesome to unlock, or bricked as a result of the unlock, Apple benefits, as people either switch to using their local iPhone carrier or stop using the iPhone.
Leave a comment