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iPhone was the hottest consumer electronic devices in 2007. It gained 19% of US cellphone market share in just 3 months of launch. AT&T is the exclusive wireless carrier for Apple’s iPhone, which made it mandatory for iPhone users to sign up for a new contract with AT&T.
Those who live outside US, or those are not willing to be with AT&T unlock their iPhone to run on any GSM connection. Bloomberg speculates that over 1 million iPhones out of the 3.75 million iPhones sold last year were unlocked. It is believed that Apple gets an undisclosed amount for every contract sold by the wireless network provider.
According to an analyst from Institutional Investor magazine, Apple might be losing $300 million to $400 million in future revenue and profit for every 1 million unlocked iPhones.
If Apple decided to cut down their sales, they might not be able to reach their goal of 10 million by 2008. On the other hand, if this trend goes on, Apple might be having a hard time sign up with new carriers in new countries. eBay is the primary market for these unlocked iPhones. These unlocked iPhones are internationally available on eBay for $500 to $700. I can’t think of any reason why the number of unlocked iPhones shouldn’t go up. Thousands of them are being internationally sold on eBay!
Source: Bloomberg
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wrote, on February 2nd, 2008
Nice informative post. And yeah Apple is losing a lot of money through this. And the unlocked iPhones will continue to grow as long as eBay is alive!
wrote, on February 4th, 2008
$300 million to $400 million is it a lot of money?
It is a VERY lot of money
wrote, on February 15th, 2008
Unlocked iPhones in the UK were achieving something in the region of £100 ($200) more than their original counterparts on eBay.
It would surely be better to by new and do it yourself. I guess there are people who just aren’t confident enought to attempt it, but what do they do when there is a firmware upgrade that locks it again.
We really ought to take the lead from France for a change though. They ruled that is was anti-competitive to lock the iPhone to a single network, so their phones are shipped unlocked.
Viva la France!.