Apparently it has taken all of two months for people to figure out how to unlock the iPhone. I find it hard to imagine that this will make a dent in Cingular's profits--the majority of people aren't going to mess around with soldering guns and cards. On the other hand, I imagine people said the same thing about that crazy Napster network.
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Lock-in
25 Aug 2007 02:43 pm
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Well, the real test will be when a software workaround gets wide release-- and it will happen.
That is a great story - Geek outsmarts the Biggies.
I know what you mean, but I think you have an inaccurate view of who is the underdog here. It was always a matter of time. The hackers always win. There are thousands of gifted people working at all hours to crack things like this. It's like any kind of encryption or anti-piracy efforts. The corporations just can't win against so many smart people who will work for free and really, really want to succeed.
Is the new ETF on the iPhone worth paying to move the phone to another network? AT&T wasn't selling iPhones at cost, they were taking a loss on each one of them (same as any phone) in order to get people signed up onto a contract. It's my understanding that Apple is the only supplier of iPhones, so there won't be any large distributor selling unlocked phones without contracts attached. It's interesting from a geek standpoint, and I suppose it opens up the secondary market one used phones a couple years from now when people are looking to upgrade to iPhone 2.0. I just don't think it amounts to much of a challenge to the current arrangement. And the software workaround that will upset the entire industry is software radio.
The average citizen isn't going to hack his iPhone, but some enterprising capitalist may very well offer de-locking for a fee. There is a cottage industry in hacked and upgraded TiVos, for example, which does pretty well.
As the lock-in period for AT&T runs out, I imagine there will be a market for unlocking and adding replaceable batteries to these things.
The average citizen isn't going to hack his iPhone, but some enterprising capitalist may very well offer de-locking for a fee.
Most high-end phones are subsidized by the carrier.
So unscrupulous people buy subsidized phones, unlock them, and them sell them unlocked - often in countries other than the one they were bought in.
The iPhone is reverse-subsidized, at least in Europe:
(http://www.basex.com/btw)
MOBILITY 08-21 According to reports in the Financial Times and other newspapers, Apple has signed agreements with T-Mobile of Germany, Orange of France, and O2 in the United Kingdom to distribute its iPhone. The contract reportedly includes a provision calling for the operators to turn over 10% of revenue made from calls and data services to Apple.
Things aren't always as we want them to be.
Most high-end phones are subsidized by the carrier.
So unscrupulous people buy subsidized phones, unlock them, and them sell them unlocked - often in countries other than the one they were bought in.
But of course this has nothing to do with the present situation, since:
a) Early termination fees are designed to counteract this (and typically aren't prorated for partially-completed contracts)
b) It's been confirmed that Cingular/ATT isn't subsidizing the iPhone's cost (and, in fact, a parts analysis shows that Apple enjoys a ~100% profit margin on the device).
It's interesting to note that, were this virtually any other type of device, the unlockers would likely be in violation of the DMCA. However, there's an exemption for cell phones.
I have a hard time believing this really matters to Apple, and it generally won't matter to its target market.
Unless designers are stupid, they factor in the systems being hacked or compromised. It doesn't exactly discourage sales (in this specific case).
Nor does it prevent the major carriers from getting annoyed and en masse changing how phones can be used.
freddie-
The corporations just can't win against so many smart people who will work for free and really, really want to succeed.
So, you would agree that there is obviously no problem with "Big Oil", "Big Media"-- or any of the other "leftist" or "anti-capitalist" whinges avidly promoted by the "nutroots"...
MOBILITY 08-21 According to reports in the Financial Times and other newspapers, Apple has signed agreements with T-Mobile of Germany, Orange of France, and O2 in the United Kingdom to distribute its iPhone. The contract reportedly includes a provision calling for the operators to turn over 10% of revenue made from calls and data services to Apple.
Wouldn't this be a mechanism for plain-old subsidy--the carriers are giving money to Apple so they can sell more plans with somewhat cheaper iPhones?
Freddie - right on time with that article on unlocking the iPhone via software only. Money does have a power hard to overcome except by the biggest of idealists (usually only when they're very young or very old, though).
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That is a great story - Geek outsmarts the Biggies. Leave it up to the individual to determine how to be ingenious and make it easier for the masses to use.
Not being an AT&T fan, I applaud the Geekster with his Hot Lead (euphemistically) Iron, and hope they can never find a way to outsmart someone with the desire to do better.
Posted by falkoyn | August 25, 2007 3:15 PM