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Why Apple’s anti-unlocking strategy doesn’t make sense

Posted June 11, 2008 3:00 PM by Cedric Bosch
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Along with the introduction of the 3G iPhone on Monday, Apple announced there would be only one way to get your hands on an iPhone- buying it in-store, and signing up for an AT&T contract on the spot. In contrast, the first iPhone was easily purchasable online, in an Apple retail store, or in an AT&T store- no contract required. It’s easy to see why Apple thinks this new plan makes sense- it locks iPhone users into an AT&T-only scenario, and eliminates the number of people buying iPhones for the sole purpose of unlocking them. However, this just doesn’t make sense. Remember Monday’s keynote, when Steve Jobs joked about how iPhones are in use “all over the world”? He wasn’t kidding. For example, over 400,000 iPhones- over 10% of all the iPhones sold in 2007- were purchased by Chinese unlockers. By restricting who can purchase the 3G iPhone, Apple has completely eliminated a full 1/10th of its customers, and that’s just in China. If Apple was serious about its goal of selling 10 million iPhones in 2008, it would offer a cheap, AT&T-locked 3G iPhone, and a slightly more expensive, fully unlocked iPhone. It might be more expensive, but at least it would give people another option.

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Comments

  1. That would be great idea if they wanted a law suit for breach of contract with at&t. Unless we forget that there is an exclusivity agreement between apple and at&t.

    Posted by Ken on June 11, 2008 5:25 PM

  2. Actually it makes perfect sense. Because it was so easy to purchase iPhones and export them wherever, Apple had little leverage to negotiate deals with other contries’ phone providers. Now that it will either be more difficult and/or cost significantly more to export those. This in turn will increase pressure on phone companies on countries without a deal with Apple thus improving Apple’s negotiating possition.

    Kevin

    Posted by kevin on June 11, 2008 5:44 PM

  3. When Apple had no contracts with carriers in those nations, it didn’t really matter that much to them that unlocked phones were in use there.  And especially for those nations that required unlocked phones.

    But now they do have carriers in almost every nation that matters, so for most of those nations, they need to ensure that people buy the phone with the carrier selling it in that nation.

    So what Apple has done makes complete sense.

    Posted by mark on June 11, 2008 6:02 PM

  4. When Apple starts NOT selling those phones to those people then the Apple will learn.Apple has made mistakes before remember. Time will tell and i think sooner rather than later!!!

    Posted by michael on June 11, 2008 9:26 PM

  5. #3: Remember that your “almost every nation that matters” does not include Russia or China, which is a substantial market.

    I don’t know the rest of the world that well, but I can point out that Apple covers Central America except for Costa Rica, which is tech saavy and has one of the better economies in the region. If they’re missing other key players in each region of the world, it adds up.

    And it’s not like AT&T is actually a good company. On the whole, they are dragging the iPhone (and Apple) down with their horrible bureaucracy and attitudes. Apple has to honor contracts, but I wish it weren’t with AT&T.

    Posted by Wayne on June 11, 2008 10:29 PM

  6. I know this policy is a deal killer for me, at least for a while, not because I plan to unlock my iPhone - I already have the original, and am perfectly fine with ATT. I just refuse to go stand in line to buy it, and then wait in the store for activation. If, in a few months, I can go to an Apple store with no wait and do it, I will.

    But I can’t believe Apple would make me do this to renew an ATT contract I already have.  It is ridiculous.

    Posted by Dawn on June 12, 2008 8:21 AM

  7. Apple is just honoring its partner AT&T, thats why they did it. So for all you would be unlockers out there, guess you have to find another phone to unlock, aint that a shame hehe. So who cares if they lose 10 percent of thier sales, at least they did the noble thing, and that 10 percent will more than be made up with the lower price of the new 3g.

    Posted by Stephen on June 12, 2008 3:44 PM

  8. It is nice that Apple has decided to make the phones more affordable, however AT&T is really sticking it to their customers. Their rates are 30% higher per month than that of comparable carriers. I was planning on grabbing the new IPhone as soon as it came out, I am now rethinking that, because it will cost me twice as much to get comparable minutes and features.

    Sprint has an unlimited plan for $99 that has unlimited voice,data,messaging, and TV. I would love an IPhone on this plan. Not to mention their data speeds are blazing compared to AT&T. Apple should not have tied itself to one carrier, especially a greedy one. I believe they are making the same mistake that cost them the huge market share to Microsoft. The only difference now is that no other phone compares to the IPhone, so the consumers are the only ones loosing out.

    Posted by Bryan on June 13, 2008 10:10 AM

  9. hombog all u niggers apple aint do da rite thing i want the iphone to be for every one kevin and steven stop with your crap

    Posted by cassidy on June 15, 2008 11:12 AM

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