“Apple Inc. said that almost one out of every six iPhones sold may have been unlocked to run on unauthorized wireless networks, surprising analysts who had estimated the problem wasn’t as widespread,” Connie Guglielmo reports for Bloomberg.
“Chief Operating Officer Timothy Cook said yesterday that 250,000 of the nearly 1.4 million iPhones sold may have been bought by users with the intention of unlocking them, or modifying the device to work on a network other than AT&T Inc.’s,” Guglielmo reports.
“Customers who aren’t signing up with AT&T, Apple’s approved service provider in the U.S., are preventing the two companies from collecting monthly mobile-phone fees. Analysts had estimated that between 10,000 and 100,000 iPhones had been unlocked since Apple began selling the device in June,” Guglielmo reports.
“Some buyers have been purchasing five phones at a time at Apple stores in the U.S., modifying the software that locks it to AT&T’s service, and then reselling the unlocked iPhones overseas,” Guglielmo reports.
“Apple’s sales totals include phones that are in AT&T’s stores and warehouses and haven’t yet been handed to customers, AT&T spokesman Michael Coe said. ‘We do agree with Apple that the vast majority of phones that haven’t been activated on our network are going overseas,’ Coe said. In the U.S., the iPhone can only be altered to run on one other national wireless service, Deutsche Telekom AG’s T- Mobile USA.,” Guglielmo reports.
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Phillip Elmer-Dewitt reports for Fortune, “One day after Apple trumpeted its quarterly sales of 1.12 million iPhones — for a total of 1.4 million sold so far — AT&T reported that it has activated 1.1 million of the devices. Most of the 300,000 gap between those two numbers, according to Apple, can be accounted for by iPhones purchased to be unlocked and used with another wireless service.”
Elmer-Dewitt reports, “Buried in Apple’s Q4 report yesterday was a $118 million line item called ‘iPhone and Related Products And Services,’ which is where the company tucked the proceeds from its revenue sharing deal with AT&T. Piper Jaffray’s Gene Munster, who’s been trying to unravel the terms of that deal ever since it was announced, estimates from the Q4 report that AT&T is sending Apple $18 per month per subscriber.”
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