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Can Apple + AT&T Shut Down iPhone Unlockers?
aalobode writes "Do Apple and AT&T have the legal right to stop hackers from selling unlocked iPhones? Under their terms, only AT&T may sell iPhones, and Apple gets a commission. When unlocked iPhones are used on other providers' networks, AT&T and hence Apple get nothing beyond what they earned on the initial sale of the hardware. Can they prohibit unlocking? Reselling? The article in Businessweek gives the for and against arguments, but leans toward the view that the hackers may have the law on their side for once."
http://news.bbc.co.uk/1/hi/technology/6966600.stm
My web domain.
I bought a computer and have the right to modify it and subsequently turn around and sell it? Amazing!
...the same thing we do every night, Stimpy: try to take over the world!
What will I do with this new-found freedom?
"If still these truths be held to be
Self evident."
-Edna St. Vincent Millay
Sigs are too short to say anything truly profound so read the above post instead.
Wrong. Apple sells iPhones (through their website and retail locations). The phone isn't activated at the time of sale (it's done at home with iTunes). AT&T announced 146k activations when Apple announced 270k iphones sold. You do the math.
Do you even lift?
These aren't the 'roids you're looking for.
Collecting bonus money from activations isn't really in Apple's business model. So why should they even bother with trying to hault cracking of the iPhone? The product has already been sold. Apple made their official dollar off of it. Their interests should really die there. It's not like crackers are replacing the Apple components of the software; just defeating the AT&T parts.
Here's an article that better explains my point of view because I'm an ineloquent rambling idiot.
The game.
Not for nothing, but when the next gen iPhone comes out and it's store activation only and not home activation, you'll know why.
I guess it comes down to who owns the phone.
If when you buy an iPhone you are actually buying the ownership to the phone, you can do what the hell you like to it as its yours.
but...
If Apple are just selling a licence to use the iPhone (kinda like what Microsoft do with Windows) rather than actually selling the ownership of the iPhone itself, then they could legally and justifiably require you not to unlock it as they still own it.
If it's illegal to unlock the phone, that means I dont own it. Am I leasing it? How the hell else is it possible for me to outright purcahse something and not be able to do whetever the hell i want with it (besides to commit something that is already a crime obviously -like throwing it at someone).
If I buy a t-shirt can they make it illegal for me to use it as a rag?
Is it illegal to color the iphone with a marker? Is it illegal to open up the iphone and melt it down? Is it illegal to take the battery out of the iphone and use the large battery in a hobby RC car project? If it is, it damn well shouldn't be.
Since unlocking involves some soldering and such, at least according to the account I've heard, clearly it violates the warranty. And don't forget, the iPhone has a soldered in battery; you're supposed to send the phone in after a year to take care of the battery. So, if it breaks or the battery dies, your unlocked iPhone is a very expensive paper-weight.
However, manufacturers have managed to prevent you from modding your game console after you own it, or at least prevent other people from selling you mod chips and modding services, so now it's murky.
Wouldn't Ford love to only have you put Genuine Ford Advantage replacement parts in your car? They can't. Nor can they force you to only buy Ford approved gasoline from licensed dealers.
Yet Apple can't prevent you from putting non-iTMS purchased music into your iPod -- although that's probably because you'd never have bought the iPod if you couldn't rip your own albums and play them in it.
So what can, and cannot, Apple and AT&T do here? Besides scaring off potential unlockers, whatever the courts are willing to allow them to get away with. Clearly these days, there is no bright shining line of what's allowed, and what isn't.
Loan your new CD to your friend to listen to and the RIAA probably won't come knocking. Let him get the tracks through KaZaA and you may have an ugly time of it. Nobody knows the real rules any longer!
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
Usually when you "buy" a phone (in the US at least) you are getting a discount in exchange for a lengthy contract. If you don't want the contract you buy the phone outright and can do anything you want with it. This is the same issue that the auto industry had at one point. Manufacturers did not want 3-party parts sold and didn't want people to fix their own vehicles. The auto industry was pretty much shot down. Unless you are breaking a law, ie: modifying a phone to output a stronger signal, you can do as you please with any item you own. That is not to say that you can not be held liable if you do something to an item you own and it ends up damaging someone else's property or another person.
--
... so they're going to send ninjas with screwdrivers into the streets to steal people's iPhones, make hardware modifications, and then quietly return them?
When you sell a mobile phone below cost, you are supposed to make up for the difference in the subscription fees. Which are mandatory to pay in the binding period even if you unlock the phone and use it on another net.
At least that is how it works with GSM phones in Denmark. You can unlock them and switch to another provider legally, but you have to continue to pay the subscription fee for the binding period. This is common, and accepted by all the service providers.
Also: The maximum binding period is six month, providers are obliged to tell the unlock key after that, and all advertisement must include the minimum total cost in the binding period (initial price plus subscription fee for six month) in order to make it easy to compare prices.
Good regulation does wonders to improve the efficiency of a market.
They get royalties from AT&T.
Well, it has never been successfully tested.
They certainly can't use the DMCA to block the unlocking. This is almost identical to the Lexmark International, Inc. v. Static Control Components, Inc. case a couple years ago. Basic upshot of that ruling is that DMCA doesn't cover hacking to unlock a device for interoperability and third-party components.
If they try to sue using DMCA, they will almost certainly lose.
IMO the legal right of Apple or AT&T to stop someone selling unlocking software will probably become a moot point, simply because if a company can do it, eventually some cracker somewhere will create a freely distributable version and release it onto p2p. Once that happens the only thing can Apple can do is update the firmware, which I would guess they have every right to do if they choose to.
In a nutshell, I think that allowing it to be unlocked would be beneficial to Apple's sales, but perhaps may cause (possible legal) problems in their relationship with AT&T.
If the history of iTunes is any guide, Apple will continue to roll out new measures that are strong enough to keep unlocking a niche issue, but won't waste time, money, and consumer goodwill by trying to lock the thing down completely. The geohot hack doesn't bother Apple or AT&T at all. Most people won't open their phone and start tinkering with the hardware. If somebody comes out with a pure-software hack that can be loaded and run with only a couple mouse clicks, Apple will probably take steps to make that harder. But in the long run, fighting to prevent hacks is a losing proposition, and Apple knows it.
The best way for Apple and AT&T to stop people from unlocking their phones is to develop software-as-a-service products that are only supported by the AT&T network. Maybe that means seamless integration between the AT&T network and the iTunes store, maybe it means streaming music & video that automagically syncs to your desktop computer's iTunes library, or maybe it means things none of us have even considered yet. Apple's whole business strategy revolves around the idea that people will pay for better quality, though.
If 'unlocking the iPhone' means 'keeping all the really good features of the iPhone and ditching the expensive suck factor of AT&T service', then unlocking will rule no matter what Apple and AT&T do. If 'unlocking the iPhone' means 'I ditched AT&T, but lost a bunch of cool features in the process', then only a handful of people will bother.
There are two main reasons Apple won't try to play the lock-in card.
First, Apple doesn't own enough of the cellphone market to have a 'lock' on anything. Their stated goal is to own 1% of the smartphone market by the end of 2008. Meanwhile, Nokia's goal is to own 40% of that same market. Apple isn't in a position to get pushy about anything right now. All that will do is alienate customers, and alienating customers doesn't help them increase their market share.
Second, Apple doesn't compete by locking out alternatives. It competes by offering the best package it can, and trusting consumers to think the package is worth the price.