BusinessWeek: The rewards of unlocking Apple’s iPhone barely outweigh the drawbacks

“There’s more than one way to break your phone free of Apple and AT&T’s constraints, but for now the rewards barely outweigh the drawbacks,” Stephen H. Wildstrom reports for BusinessWeek.

With an unlocked iPhone, you can’t use “the iPhone’s visual voicemail feature, which lets the user go straight to any voice message by selecting it from a list on the screen,” Wildstrom reports. Also, “the YouTube application did not work…”

Wildstrom reports, “Some of these capabilities are very cool, but the unlocked phone makes sense only for customers who have a good reason not to go with the standard AT&T deal—such as living outside the U.S. and really, really craving an iPhone. You’ll still be stuck with relatively slow phone networks, even in Europe, and there’s the fact that the hardware modification voids the Apple warranty.”

Wildstrom reports, “There’s also the possibility… that a future Apple software update might relock the phone and leave you with an elegant but expensive brick. You can get around that by refusing to accept updates, but then you can’t use new applications, such as Wi-Fi access to the iTunes Store. Nor will you get updated bug fixes and security patches.”

Full article here.

[Thanks to MacDailyNews Reader “Linux Guy And Mac Prodigal Son” for the heads up.]

29 Comments

  1. This will quckly change as more and more native 3rd party apps gets written for the iPhone. Also, the “hackers” are making installing of these 3rd party apps a lot easier with a graphical UI that most users will be able to install. Soon the rewards will outwewigh the drawbacks.

    For us up here in Canada, unlocking is the only way we’ll be able to use th iPhone as there has been not even a sligthest inkling of the iPhone being released in Canada as a result of our small market and pedantic cell phone industry.

  2. @Linux Guy And Mac Prodigal Son

    No one is going to use the “hardware” hack
    iPhonesimmfree, is all over the place with their software hack.

    This is no threat to ATT, the people who are doing this, live where there is no ATT, or travel overseas a lot. I live in Mexico, and we do not even have an iTune store, so we do not see the iPhone coming here any time soon.

  3. As for Canada – I don’t think I’d even want to get one right now. I live in Western Canada, and Rogers coverage totally blows out here. In addition, with the amount Rogers charges for data services (and this appears to the big stumbling block – Rogers doesn’t want to back down on this issue, even for the iPhone), I couldn’t afford it.

    Thank Steve for the iPod Touch… my cheapo simple Telus phone and the Touch make far more sense as a solution, even with having to carry two devices…

    MDN word: night: As in “Have to work all day and all night to pay Rogers data plan fees…

  4. Rogers in Canada are dick-heads. I’m selling my stock in Rogers and buying more Apple stock. ” width=”19″ height=”19″ alt=”grin” style=”border:0;” /> Apple bought my new Corvette!!
    ” width=”19″ height=”19″ alt=”grin” style=”border:0;” /> Thanks Steve.

  5. Regarding Canada, you’d think Apple would want to extend coverage for the iPhone to cover all of North America as soon as possible. There is plenty of cross-border travel and it makes sense to have iPhone features available when I cross the line. Since they are the only GSM service in Canada, I suspect Roger’s (and their FIDO subsidiary) will be the carrier. I recall that Roger’s network used to be an AT&T;partnership but since their separation they haven’t had a great track record — anyone remember their “Reverse Option Billing” scandal?

  6. @MrMikey

    Agreed 100%

    Rogers has decent coverage where I live, but the data plans are still insanely expensive. And I don’t feel like using an unsupported product and having it break all the time with only myself to fix it.

    Since I already have a RAZR, I only ever really use the cell phone and camera functions on anyways, the iPod touch makes far more sense for me, at least in the foreseeable future.

  7. in regards to the “no youtube thing” if you go to google video, when the little blue box w/ the “?” inside comes up, just click “download” next to it. This will display the video in the same sideways format as YouTube. Yes Google Video sucks, but it’s a good alternative for people who want an unlocked iPhone

  8. @Linux Guy And Mac Prodigal Son:
    It’s not threat to Apple because they are selling more phones because of it. There are plenty of resellers willing to take advantage of the demand to offer a service, so you don’t have to be an Uber Geek to get an unlocked iPhone, you just need to know one. I think you underestimate the number of people who are doing it. Engadget has an article that states that it’s already been done by people in over 42 countries, and if you read the comments, you get the impression that there are a lot of us out there.

    The more I think about it, the more I think Apple should have gone on their own and just sold unlocked iPhones worldwide, where service exists. They could have avoided having to sign exclusivity agreements, and wouldn’t limit their potential customer base by geography or network. Sure, they wouldn’t have visual voicemail, but I’d say that would be a worthwhile tradeoff and it could always be added later by finding some other way to appease carriers, like offering access to the iTunes Store via EDGE.

    MacGolfer: AT&T;users who roam in Canada do get visual voicemail. Those with an unlocked phone with an account on any other network will only get voicemail notifications and standard call-in to check messages service.

  9. Fido used to sell the Hiptop, another data intensive device and they offered (I expect still do) unlimited data for $20/month, but only with the Hiptop.

    Can’t help but wonder what would happen if you had a hiptop and popped its SIM over to an iPhone…. Or over to a cellular modem…

    So its clearly not a network capacity issue, and there is a precedent. In fairness, the Hiptop wasn’t that popular.

    Blackberries also get different, much better pricing, Bell’s Solo brand has unlimited data on a couple of extremely crappy phones, also.

    Now the bad news: supposedly Fido isn’t going to get the iPhone, only Rogers, according to the well meaning but doubtlessly not that informed staff at the local Fido store. On the other hand, I expect Apple will be making some demands regarding pricing.

    t will be interesting to see what happens in the U.K./France/Germany as regards pricing – comparable to the U.S.? A change from earlier pricing?

    Even with the grossly inflated pricing, I’m getting very tempted to make a road trip to the U.S., grab iUnlock (the free, open source unlocker), and try and only use data when on wi-fi.

  10. Andy C.:

    If Apple didn’t sign exclusive agreements, then Apple wouldn’t be receiving 10% of subscriber fees for each iPhone. That’s quite a bit of revenue that Apple would be losing, much more over time than selling more iPhones would compensate for.

    Why? Because if you have a phone, you need service. If you have an iPhone, you aren’t buying it to be an iPod. You want the phone part as well, so you’re paying for service. 10% of $60/mo (about the cost of the minimum AT&T;plan) is $144 over two years of additional revenue from selling the same iPhone. More for more expensive plans, which I imagine plenty of people opt for.

    I think you’re OVERestimating the number of people who are unlocking iPhones. Engadget lists 42 countries, but there could be one person in a country and the whole country is included. While there may be a lot of peopled who want to have an iPhone where they are not currently sold, I don’t see a lot of people spending $400 for the phone, then hoping the hack will work, knowing that some services will not work, and praying that Apple doesn’t release a software update that kills the hack.

    Sorry, most consumers don’t want that kind of risk. They want to know that their phone will work without having to screw around with it.

  11. @ lbuschjr

    True enough about the revenue sharing deals. Still, I have to wonder how many more iPhones Apple would sell if there were no contracts and no unlocking for consumers to deal with, and they were available worldwide. The money they would make from selling that many more iPhones could be more than what they get from revenue sharing agreements, and they’d gain far more customers which would bring in other revenue streams to Apple.

    I agree most consumers don’t want that kind of risk, but don’t underestimate Apple’s brand power. The number of people who are using an unlocked phone is certainly measured in the thousands, which means it’s not insignificant. My whole point is there are plenty of people who ARE willing to go through it. I can only offer anecdotal evidence unfortunately, but the amount of websites I’ve seen devoted to it, volume of forum posts on many different forums, speaking to Rogers support staff and US Apple Store sales staff tells me there’s some validity to my claims.

    I think the majority of people who have unlocked the iPhone, like myself, would disagree with the article. For me, the rewards outweighed the drawbacks by a significant amount.

  12. “This will quckly change as more and more native 3rd party apps gets written for the iPhone.”

    Buy my new iPhone app.
    -Will it work if I upgrade?
    Maybe.
    -Then “maybe” I’ll keep my money in my pocket.

    As long as there’s no money in it, it’ll be at best a hobby. The rewards will never outweigh one significant drawback, a seamless experience that you never have to think about. When the 1.0.2 update came out, I installed it with no problems, didn’t have to wait for anyone to code around changes or anything like that.

  13. “I agree most consumers don’t want that kind of risk, but don’t underestimate Apple’s brand power.”

    100% of Apple’s brand power is based on products that just work without having to know anything about the device. The fact that some geeks want to hack the device to make it work the way they want it to doesn’t change the fact that the people buying an iPhone are not buying it because it’s “hackable”.

    “The number of people who are using an unlocked phone is certainly measured in the thousands, which means it’s not insignificant.”
    When you’re talking about cellular phones, “thousands” is insignificant. Heck, even “millions” is insignificant. Apple wants to sell 10 million phones in their first full year of operation. That would be LESS than 1 percent (given that over a billion will probably be sold next year).

    To the entire cellular market, Apple’s hat in the ring will be insignificant. Those people hacking the iPhone will be an insignificant amount of an insignificant amount.

  14. I think we need to take a step back and look at progress:

    v1.0 – the hardware based unlock, and the very first. Featured on CNBC. Clearly not for anybody except hard core. this took around 6 weeks.

    there is also the turbo sim sleeve – again hardware based, but that was kinda cheating, took 5 weeks.

    v2.0 – the software only unlock from iphonesimfree.com – a massive improvement. Unfortunately closed, payware, and command line. Still fairly hard core. took 8 weeks from launch

    v3.0 – iUnlock – free, open source but still command line. another nice improvement but command line still means hard core. took 9 weeks. people who want to charge $50 for this service just had a heart attack….

    v4.0 – the gui version of iUnlock is released in beta this week – this is the one everybody wants. give it a couple of more weeks to make it highly Mac like, widely used/tested….

    http://www.macnn.com/articles/07/09/12/free.gui.iphone.unlock/

    will most people use v4.0? probably not.

    if the alternative is no iPhone? now its getting hard to say. depends on how bad you want it and when the iPhone is coming. For what its worth the local Fido store claimed they had already seen several unlocked iPhones brought in by customers. Dunno if they were giving me a line or not – this seemed awful fast.

    if unlocking is widely done and available at the corner store like it is in the U.K.? now its gets interesting.

    would you do it if its about as easy to do as ripping a cd into itunes (which i expect)? a big chunk will say yes, with another big chunk going to the corner store/unlocking expert/their local tech ‘guru’.

    so it looks to me that there will be a lot of unlocked iPhones out there, beginning next month, depending on the need. for people not serviced well by AT&T;(particularly outside of the US) the need is high, but you have to get an iPhone first.

    a lot of iPhone developers are Mac people – they understand about ease of use, even with technical software like iUnlock. if not, they’ll be quickly educated, Its The Mac Way ” width=”19″ height=”19″ alt=”smile” style=”border:0;” />

    and, since iUnlock is open source, if somebody messes up (has a clunky interface), somebody else will make a new version off the same core.

    the iPod touch complicates things – a lot of people may just grab that instead.

    almost enough to make you wonder if the original author of the article was an AT&T;astroturfer. probably not, just not thinking ahead.

  15. This guy is an idiot and has no idea how big the hacker community for iPhone is. I live in Austria EUROPE and every single feature except for visual voicemail works. everything. Youtube, Googlemaps,safari,wi-fi,edge you name it!!
    I hate guys wh think are tech geeks but have no clue whats really going on!!

  16. Way Down Under..

    I live in Australia and am lucky enough that a mate of mine who lives in NY is shouting me an iPhone. It should arrive in the next week. I bought on the day it released the iPhoneSimFree solution and two days later the free hack came out. Once I get my phone I’ll probably end up using the free hack and forgetting the $AU60 I paid.

    I have never used voice mail. I have a paging service whereby missed calls go to a call centre who text my messages to my phone. They answer as if they are my receptionist. When the iPhone comes to Australia and if the telco is one I would be prepared to change to, then I might start using voice mail for the visual voice mail features, but otherwise I couldn’t care.

    I am soo Jonesing for my iPhone. Now that I have touched one that one of my clients has (unlocked by the free method) I can’t get mine soon enough. For me, having suffered through a number of alleged smart phones, finally I will have a real smart phone.

    Bring it on!!

  17. WAIT.

    GOOGLE will own the 700Mhz air ways… and iTOUCH and iPhone shall rejoice in a freshly innovative APPLEGOOGLE sub-telecom-company system.

    IT will be better then anyone thinks. And shall Kill Rogers DEAD.

    Rogers is TOO tied into YAHOO which is Microsoft partnership move. AND BELL Canada uses Microsoft client emailing…. SO CANADA is whacked….

    CND needs GOOGLES upcoming 700Mhz air ways.

    Hurray… I think I made this all up. Maybe not. I can’t remember.
    Was I dreamiing again.

    SOMEONE help me!

  18. RE: Canada

    Apple should just scrape together a few billion and buy out Rogers. They’re the worst carrier in Canada – though it’s hard to blame them entirely with the likes of the CRTC (our regulatory body) which seems determined to create micro monopolies throughout the country. Rogers is worth slightly over 30 b’s.

    Alternatively, for other markets, they could come out with a good VoIP app that works over WiFi and start setting up 1000mW hotspots in major centers.

    MDN Magic Word: ready, as in “I’m ready for a real choice in Canada”.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.