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Unlocked iPhones Are A-OK with Apple: Mark Anderson Right Again

June 8th, 2008 · No Comments · Future in Review

At the recent Future in Review conference, Mark Anderson reiterated a prediction he made back in April in his SNS newsletter. In the April 28 issue, he commented on how Apple is cleaning up on the iPhone, as Nokia and Motorola are on the ropes. The only problem? The lockup with AT&T is a key obstacle holding them back from “total market domination.” Anderson said then:

“Unfortunately, Stevej has a five-year lockup with AT&T. Hmmm. What do you want to bet he finds a way to break that deal, say, within the next four months?”

Based on what I read in the July issue of Macworld Magazine, it sounds like Steve may have found a way to circumvent the deal without actually violating the specific terms. If you don’t aggressively prevent the use of the phone on other networks via hacks, can you be accused of “breaking the deal?” Apparently not.

I tried to find the article at the Macworld site, so I could drive traffic there, but (sigh) it appears Macworld no longer posts print articles in a timely fashion. Either that or the navigation is so byzantine I couldn’t find it. (Note to content sites and bloggers: please don’t use Google search to help visitors find things within your site — there is no way to sort by date…) Anyhow, here is an excerpt of the article:

Unlocked iPhones Are A-OK with Apple

Hacked products show strong demand 

If you were Apple, what would you do upon realizing that many of the 5.4 million iPhones you’ve sold haven’t been activated on the networks of any of your worldwide cellular partners? The correct answer? Shrug. 

True, Apple doesn’t get the cut from the unlocked phones that it probably receives from its cellular partners. But presumably, Apple has priced the iphone hardware to produce a tidy profit on its own. And that’s money it doesn’t have to share with the likes of AT&T, 02, or T-Mobile. 

This strange story, the “disappearance” of iPhones from the markets in which they’re being sold, has been the highlight of the last two Apple conference calls with analysis to discuss the company’s financial results. In the most recent call, Apple CFO Peter Oppenheimer said that unlocking is occurring and it’s significant. “Our view is that it’s a sign of clear interest and demand globally.”

When this unlocking trend began, I think many Apple watchers expected the company to take a pretty hard line in defending its phone company agreements… Apple seems pretty cheery about the whole thing. 

My guess: Apple…didn’t expect the demand for the product to be so huge that the unlocked phones would be the massive source of sales that they have become.

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