Apple: 250,000 iPhones bought to unlock

Throughout all the hoopla over the hacking of the iPhone, it was never very clear how many people were actually trying to escape from AT&T. Apple ventured a guess on Monday.

During a conference call to discuss the company's blowout fourth quarter, Apple Chief Operating Officer Tim Cook said that of the 1.4 million iPhones sold since June 29, 250,000 were bought with unlocking in mind.

As many as 250,000 iPhones might have been bought last quarter and unlocked, Apple said Monday.

(Credit: CNET Networks)

"Where we don't know precisely how many people are doing that, our current guess is there were probably 250,000 of the 1.4 million that we sold where people had bought them with the intention of doing that," Cook said, or actually volunteered: no one asked him that specific question.

There are now several reports out that suggest the 250,000 is a firm number of unlocked iPhones in the wild, but that's not exactly what Cook said. An Apple representative said Tuesday that Cook's comments were just an estimate of unlocked iPhones, although it does appear to be a pretty damn good estimate.

AT&T had its own earnings conference call earlier Tuesday, and Bloomberg reported that the carrier said it has activated 1.1 million iPhones to date, which could suggest that as many as 300,000 iPhones might be destined for other cellular networks. Some of that difference can be chalked up to units in transit as the quarter ended on September 29, or iPhones that were bought at the very end of the quarter and activated at the very beginning of the next. Of course, it's also very possible to unlock an iPhone without going through the registration and activation process with both Apple and AT&T, disappearing off the radar screen.

As discussed at length, Apple is unlikely to stand idly by and let users unlock their iPhones. Peter Oppenheimer, the company's CFO, confirmed the obvious on Monday, that Apple doesn't receive any payments from AT&T under their revenue-sharing agreement for iPhones that aren't running on the AT&T network.

Many of the iPhones counted in Cook's estimate were sold after Apple cut the price of the device by $200, he said. So not only did Apple miss out on the higher profit on those iPhones, it's also losing the ongoing revenue from AT&T's data services. Now that several of the iPhone hacking groups have figured out a way around the 1.1.1 software update, which bricked many of the early unlocked phones, Apple likely has another software update waiting in the wings.

[raulmot]

Unlocked Phone Revenue

First, they aren't really loosing revenue, because many of those 250,000 unlocked phones never had intention of signing up with AT&T. If they it couldn't be unlocked, I would guess there would have been about 245,000 less iPhones sold.

Second, they are still getting revenue on the the 250,000 iPhones that would not have otherwise have been sold.

Third, yes Apple will update the software and squash unlocked iPhones. But the hacking community will find ways around it again. And this time, most people will have learned their lesson and not upgrade until the hacking community gives the go ahead or has a workaround.

[mvpcarl]

Has anyone seen?

Has anyone seen the Will It Blend from Blendtech? I imagine there were a lot of people that bought these just to take them apart, or to BLEND THEM!

http://www.willitblend.com/videos.aspx?type=unsafe&video=iphone

[dotmike]

There's also that one Greenpeace smoked

Greenpeace "analyzed" one in order to get some publicity:

http://www.emsnow.com/npps/story.cfm?pg=story&id=29692

[dotmike]

You say it like it's a bad thing...

There's ample evidence to suggest the majority of unlocked
iPhones are not being used in the US.

Case in point, I have two in my household alone, unlocked... in
Australia.

In my wider circle of (mainly tech savvy) acquaintances, there are
a large number of iPhones represented, almost as many as
amongst similar groups in the US.

In finding out how to unlock, I've been communicating with
people all over the world, ranging from Malaysia to Croatia.
There has been no announcement of iPhone availability in any of
those markets.

If those people had not unlocked, Apple would have not received
any more revenue, and if those people had not purchased the
unit at all, Apple would have received less revenue and would
not be able to boast having sold over 1 million in Q4.

To assume that unlocking is hurting Apple is flat out wrong.

Besides this anecdotal evidence: Apple's own retail stores
indicate much higher sales rates in "border cities" such as
Washington State for Canada, and New York (as a border city to
Europe) with payment by international credit cards. They must
be aware of this.

Plus, there's a very large number of people who buy several at a
time and resell them through Ebay. For a while, Ebay even had
an iPhone graphic on its home page.

Considering that the average Ebay price is ~$500, and the online
Apple Store price $399, why would anyway buy from Ebay inside
the US.

Unlocked phones benefit Apple in the same way that an iPod
sale does. They don't receive additional network revenue, but a
$400 sale is a $400 sale.

[Tom Krazit]

Interesting

On the part about usage outside the U.S., at least. Do you have anything else to support that, any other sources of information about iPhone usage outside the U.S.? Like you, I've seen a lot of anecdotal stuff, but would be interested in learning more about that if you can point me in the right direction.

Also, where did you get the info on the border store sales? Not disputing it, just looking for something to support it.

Obviously, judging by Apple's quarterly results, they're not exactly hurting. But if they can't prevent unlocking, wouldn't it be harder for them to demand the types of revenue-sharing agreements they got from AT&T in the future, when talking to other carriers?

[imacpwr]

Unlocked iPhones in France.

Switzerland's "SonntagsZeitung" reported Sunday (Oct. 20) that
iPhones sold in France through Orange would have to comply with
consumer's rights laws of France by suppling in addition to the
"locked" Orange version an "unlocked" version which would allow
cell phone subscribers to use the cell phone provider of their
choice. This "Naked iPhone" comes at a price though as it's
expected to cost over $1,200.