Apple (AAPL) Solves iPhone Unlocking Problem, Cashes In
In Germany, Apple has apparently found a way to solve the vexing iPhone "unlocking" problem, which is costing it hundreds of dollars on each iPhone sold (as Dan Frommer explains, Apple collects high-margin revenue on each locked iPhone activated by AT&T and other wireless partners, which it loses when buyers free their phones).
Here's the solution: Sell the unlockable iPhone for about $1,000 more than the regular phone. MacNotes.de (via Engadget and MacRumors) note that, to get around an injunction filed against T-Mobile, Apple has begun selling an unlockable iPhone for 999 Euros, 600 Euros more than the regular phone. Buyers simply plug the phone into iTunes, click a switch, and voila!
Not clear how charging usurious prices for a simple software fix will get T-Mobile out of legal jeopardy in Germany, but a similar solution is apparently also in works for iPhone sales in France (where the exclusivity provision will only last six months). And, in any case, we are probably seeing a foreshadowing of Apple's solution to the iPhone unlocking problem in the U.S.: Buyers will likely be allowed to buy $399 iPhones for use with AT&T--and, say, $799 ones for use with the carrier of their choice.
See Also:
Why Apple is Rationing iPhones (So Professional Unlockers Can't Buy More of Them)
How Much Are Unlocked iPhones Costing Apple?
iPhone Ballerina: Real, Taken
Here's the solution: Sell the unlockable iPhone for about $1,000 more than the regular phone. MacNotes.de (via Engadget and MacRumors) note that, to get around an injunction filed against T-Mobile, Apple has begun selling an unlockable iPhone for 999 Euros, 600 Euros more than the regular phone. Buyers simply plug the phone into iTunes, click a switch, and voila!
Not clear how charging usurious prices for a simple software fix will get T-Mobile out of legal jeopardy in Germany, but a similar solution is apparently also in works for iPhone sales in France (where the exclusivity provision will only last six months). And, in any case, we are probably seeing a foreshadowing of Apple's solution to the iPhone unlocking problem in the U.S.: Buyers will likely be allowed to buy $399 iPhones for use with AT&T--and, say, $799 ones for use with the carrier of their choice.
See Also:
Why Apple is Rationing iPhones (So Professional Unlockers Can't Buy More of Them)
How Much Are Unlocked iPhones Costing Apple?
iPhone Ballerina: Real, Taken
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I would guess that one reason why Apple may be experiencing lackluster sales in the UK might be due to the fact that consumers there don't like being locked-in for 2 years.
profit on sale of iphone + % each month of contract ...
If the court rules that Apple (in essence) must make all the profit upfront, so be it ...
unlocked iphone = locked iphone + contract revenue steam in today's $ + a couple hundred dollars for making Steve Jobs take two phone calls over the weekend.
Basically, Apple wins BOTH WAYS and there are no laws against pricing anything at any price when you sell it for a PROFIT (how much do Chanel or Fendi bags cost to make - $100? What do they sell for $6,000? or how much more metal do you get with a Ferrari than a Sprinter truck?) ... it's only if you sell at a loss or "dump," then they can come after you.
Again, win-win-win for Apple.
It's not actually Apple offering the phones for sale.
if the true costs of the iPhone are 999 Euros, you might see Apple's share price starting to go down pretty soon, since Apple would be losing a lot of money on each and every iPod Touch sold -- the parts cost for which can't be much higher than the iPhone.
In truth, I think this is the ugly and exceedingly greedy face of Apple showing itself.
BTW, I've been an Apple fan-boy and loyal customer for more than 20 years, so don't think you can simply dismiss me as some Windoze borg.
Or do you think the EU courts are going to get into the pricing game. Plus there is a lot of competition, you simply don't have to buy an iPhone at all. Apple should be punished by the market place and not through the courts, unless its doing something to violate the law. High prices alone don't violate the law. Does that mean a Mercedes should now sell at a price comparable to a much cheaper vehicle.
If a product should not be tied to a service then shouldn't that also apply to government services as well. For example if I am unhappy with German law, why should I be compelled to use German courts, can't I then use an Italian court instead? Do you think Germans would entertain that idea?