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Apple Says 250,000 iPhones Sold to Unlockers
Hugh Pickens writes "Timothy D. Cook, Chief Operating Officer at Apple, disclosed during Apple's conference call to discuss their fourth quarter earnings that they estimate 250,000 of the 1.4 Million iPhones that have been sold were bought by people intending to unlock the phone. 'The elasticity in demand with the price drop] enabled us to far surpass our expectation of hitting around a million units cumulatively by the end of the quarter. Some number of these were sold to people that have an intention to unlock and [while] we don't know precisely how many people are doing that, our current guess is there is probably 250,000 of the 1.4 million that we sold where people had bought them with the intention of doing that. Many of those happened after the price cut.' Apple knows how many iPhones have been sold and how many have been activated with ATT. The difference is the number that are unlocked."
Couldn't some of that 250 000 just people not bothering activating them or planning on giving them away as christmass gifts or whatnot.
Does anyone else find it somewhat ironic that a company that has roots in defrauding Ma Bell is having these problems now?
ATT shareholders are the ones who should be paying attention.
25% of the affluent side of the market is willing to risk bricking a $400 phone to avoid their service.
How many more iPhones would have been sold if it was unlocked in the first place.
I'd like to know how many of those 250,000 phones were resold (on ebay?) for a premium? On one hand, those extra sales are obviously good for Apple. On the other hand, that could also be viewed as an opportunity cost for Apple...
I guess I'm one of many people that would be interested to see the numbers on the whole 'exclusive cingular deal' thing. I'm guessing there must be quite a hefty payment per unit by cingular to apple. Looking at these figures, apple were expecting 1 million sales at the end of Q4, and ended up with 25% more sales as a result of sales to unlockers, if they were expecting this then I'm guessing the payment per unit must be at least a third of the unit price.
I guess we'll know when it goes on sale in France (where due to law it must be sold unlocked). I assume they'll be whacking on the appropriate additional cost.
I also wonder why Apple really care? I mean they already signed the deal, and they're making 'reasonable' efforts to uphold their end of it, so why do they care enough about unlockers to bother with a patch aimed at preventing it? Esp. since they're getting more sales out of it....
Windows in 6 Bytes (IA-32) : 90 90 90 90 CD 19
From a business perspective, I understand the benefits of profit sharing especially when you have a lock on the market with your new product. However, when 18-20% of your market makes the active effort to purchase your product and create a workaround, I firmly believe that Apple could have printed their own money if they opened sales up to all companies that can handle a SIM card.
Being a T-Mobile customer, I wasn't an early adopter for the iPhone. I would have been if I was an AT&T customer, but having looked at it demographically I see this:
There are people who want an iPhone:
-And get it
-But have a different carrier
-And buy the hacked version for 90% of the functionality
-And can't justify the cost
-But won't pay the switching cost.
-But they really want a ZunePhone
.02
My
Missing from this oversimplified calculation are iPhones sold but not yet registered with AT&T. This would include (and is potentially a figure large enough to throw off their estimate) iPhones sold to non-registered resellers.
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
I bought the iPhone the day it came out thinking I'd have the same reaction ("it's just a phone"). I then immediately took it on a multi-week vacation and used it every day. I found some features invaluable.
* The "real" web browser can be a lifesaver. I was able to conduct business as usual, accessing OWA, using PayPal, etc. No Blackberry-ized web.
* "Real" email is also a plus. Getting PDF attachments and actually seeing them rendered as they're supposed to be rendered helps.
* Visual voicemail was a great benefit on vacation. When you have 10-12 messages to go through, a day, seeing exactly who sent what and picking/choosing was a godsend.
* Video plays very well on it, and was a great benefit on 8-hour plane flights.
* Even "just as a phone", there's a number of features that it just does better than other phones. I never could recall, for example, the key combination to do 3-way calling on my Blackberry. On the iPhone it was just a couple of button presses.
It's still not perfect. If you receive a large attachment (e.g. a 1 MB+ JPG) it can error. I've seen the web browser crash a few times while playing music. Also, the screen is a fingerprint magnet.
That said, the same people complaining "What's so good about an iPhone?" are likely the same that complained years ago "What's so good about carrying around a cell phone?" Until you have one, using it every day, you don't realize how good beneficial it can be.
I can only hope that other manufacturers copy the design well enough that someone else can release a model at a lower price.
You just don't get it, do you?
It's got an "i" in its name. That's right, not just any old copy of the ninth letter of the Roman alphabet, but a motherfucking lower-case "i".
Comprendez?
Some of us get paid lots of money to do that.
It supports Javascript just fine. Flash they might get working at some point, but I wouldn't hold my breath for Shockwave.
I read the internet for the articles.
Completely agree. Set aside how thin it is and the screen, the UI is amazing. From a product development standpoint, it's an amazing piece of user functionality (or human interface whatevertheycallit). It's fast, easy access to all of the different types of information on the phone. (Yeah, this sounds like fanboy crap, but I got to play around with one last week and I understood how to use it pretty much instantly. That's not the case with a lot of phones, where you have to dig through menus to get to features.)
Bark less. Wag more.
and that would be me. :)
:)
:P)
:)
As a Canadian, I didn't have much choice. It was unlock it, or wait until Apple and Rogers get their act together.(Rogers is basically the only GSM carrier in canada. Fido is the other one, but it's owned by rogers now)
There's no light at the end of the tunnel for Canadians either. There are 2 hurdles currently slowing down the release of the iphone in Canada:
1) the iPhone name is already trademarked by a voip company called Comwave. I know this because I'm an iphone customer in more ways than one!
2) the data rates in Canada are insanely stupid. I don't even subscribe to data and just rely on wifi around the big cities to fulfill my data needs. The best deal I can get from Rogers is $10 for 10MB. After that, it's $0.03/KB. Yes, you can do the math. The 2nd 10MB will cost you another $300**. Now you know why I don't subscribe to data.
Going the unlock route might even make sense when indeed it does show up north of the border. You know they'll force you to subscribe to data, and you know they'll want a lock in for 2-3 years. So even if it was available in Canada now, I might still have unlocked an iphone anyhow.
Just my $0.02 CND. (And yes, it's actually worth more than your $USD now
** - Can someone double check for me, I'm still in disbelief at the $300 for the 2nd 10MB
AirSpeak - http://itunes.com/apps/AirSpeak
And if by killing you mean buying up all the companies that where making excellent clones and using their talent to build the iMac, G3 and Airport... then good for Apple.
"Slashdot, where telling the truth is overrated but lying is insightful."
I'm all for hacking around this kind of crap. Remember when Nintendo tried to sue Game Genie? In that case, the judge ruled that once you buy a piece of hardware, you can't force someone to use it the way the manufacturer intended, at least not through lawsuits.
Here's another perspective (as opposed to the other one already extolled by another poster above):
I'm among the 250K iPhone buyers who bought to unlock. I, unfortunately, live in Canada, but the feature set appeared solid enough (and my iPod had the good grace to suddenly die on me) that I decided to make the jump. I don't regret it one bit and here is why:
- Full email access on the go is very nice. A Blackberry does this also, but very few other phones do. I've never realized how nice it is to have email access on the road - airline reservation number? No need to bring a sticky note, or anything else for that matter, it's all cached on the phone.
- The full web browser is a bigger feature than people give it credit for. I communicate heavily via forums, wiki, etc, for work, and being able to check these in a non-crippled (like a Blackberry, or every other phone really) phone is really, really, really nice.
- It is, in the end, just a phone and iPod slammed together. But it is also the nicest phone I've ever used, bar none. The interface is intuition, the buttons are easy to hit (which can't be said for Sony Ericsson phones, which used to be my favored brand - they have nice software, but poor physical UI).
- It's ridiculously nice not having to carry a phone AND an iPod. I tried this before with other music phones and I'd been disappointed each time. I was wary about this at first, having such problems with convergence devices before, but so far the iPhone has been a dream in that regard. The iPhone is the first "all in one" device I've used that doesn't suck.
That's MARKET penetration, for the dirty-minded of you out there.
Listen, I'm not going to buy an iPhone any time soon. I'm a grad student and just can't afford it. In fact, by the time I can afford one, every other cell phone manufacturer will have something that copies all its features, although Apple will also keep up and have some better phones, etc. But I think Apple is doing absolutely the right thing with the iPhone, and as annoying as some of their actions have been, they're ultimately going to our benefit as well as theirs. This isn't altruism. They want profit. It's just that they know about user demand, but they presently have their hands tied.
Here's something you need to realize: Apple doesn't like this lockin any more than you do. Oh, sure, they like the kickbacks, no doubt. But the lockin has caused them untold grief from both technical and PR angles. And the KNEW this even before setting out.
So why put us through all this bullshit? Because before there was an iPhone, there was no specific demand for it. As an idea, there was GENERAL demand, but there wasn't a phone from Apple already that you could play with to tell that you really want a phone from Apple. If Apple were to start out with an unlocked phone, they would shoot themselves in the foot--no carrier would pick up their phone, because there wouldn't be enough guaranteed profit in it. As it is, Apple and AT&T have going basically the only way to go about it and not have the iPhone be a total waste of time that tanked before it started. The key factors here are (1) to get users familiar with it and addicted do it, and (2) make significant profit. The only way to do these things is to sell them by the millions. The only way to sell by the millions AN UNPROVEN PRODUCT is to make a deal with a major carrier who will see enough profit in it to help push it on buyers.
In short, what Apple did was SMART. Oh, it wasn't NICE. But it was SMART, because frankly, it's the only way to meet these basic business requirements.
I guarantee you that before iPhone+AT&T, T-Mobile was only passingly interested in it, considering it to be a very risky thing to take on. NOW, they're shitting themselves and are about ready to beg Apple to sell to them. Apple knows this. This is why Apple did what they did. They had to prove themselves, and now everyone wants them. One way to prove yourself is to sell the product successfully. The best way for them to sell the iPhone successfully THE FIRST TIME was to take another route.
Apple is smart and is going to take advantage of their popularity. Once AT&T becomes dependent on the iPhone because they see it as highly profitable, they'll agree to terms more favorable to Apple, which is that Apple will sell to other carriers, and the phones they sell will be unlocked! Apple is not only aware of what the users want; they've ancipated what the users want and are preparing to give us those features. They just can't yet. Apple is fighting tooth and nail with the unlockers, not because they give a shit about unlocking. They WANT unlocking. In fact, they're probably elated that users are able to use the phones on other networks. But they have to put on a good show for AT&T! They have a contract with AT&T that requires them to maintain the lockin. And they MUST maintain that lockin, because they have not YET achieved that critical mass of adoption.
Oh, BTW, if Apple doesn't do as I predict, users will become jaded and lose interest in the iPhone as the competition catches up and DOES provide what people want. I don't think Apple is that blind or stupid. Otherwise, they wouldn't get half their Mac sales from people who've never before owned a Mac.
To be honest, I just don't care for the iPhone. My coworkers have them. I have played with them all over. I even borrowed one for a couple hours.
I just don't get it. It's not intuitive to me, it's too slow (the whole interface seems to be the UI equiv of William Shatner) and I just don't like it.
Where's the SEARCH in the Address book? Where's the replaceable battery? Where's the GPS? Where's the 3G high-speed? Where's the decent audio jack?
Comeon Apple, you can do better.
An operating system should be like a light switch... simple, effective, easy to use, and designed for everyone.
Well, every time I read this type comment on the iPhone (or any other product of any type on the market) my first obvious thought is "they aren't marketing this thing to you".
Obviously, they have struck a chord with many other people out there. It does have the current 'gee whiz' factor. It has a nifty interface. It works with iTunes, upon which a lot of people have their audio/video content contained. It does have a 'coolness' fad factor at this time, believe it or not, there a LOT of people out there that like to have the latest thing. Heck, read how bad that type thinking is in Japan before criticizing the US on it.
To get it so thin, and other design reasons, there had to be compromises, I'm guessing the non-owner changeable batter is one of them.
And lastly, there are a LOT of people out there with a LOT of disposable income. To many people out there in the US, $300 is pocket change....and they'll often pick up the latest 'toy' to play with without a 2nd thought. To them, I'd guess any cell phone is a disposable phone, and this one is no different in that aspect.
So really...if you don't see the greatness about the iPhone...if you don't 'get it'....then don't worry and quit bitching. It isn't marketed at you, but, why complain if it does catch the attention of other people. Do you complain that much that 'no one needs a corvette' when a yugo would do just find, and and seat far more people?
Not every product is made to appeal to everyone...it seems that would be a dead simple concept.
For the record, I do not have an iPhone. I think they're cool, and if they weren't locked to AT&T, I'd have one myself....but, I don't bitch about all the shortcomings and ask why would anybody in their right minds would buy one. I can easily see why others would. It isn't that difficult.
Light travels faster than sound. This is why some people appear bright until you hear them speak.........
Personally, I don't care a lot about the iPhone and don't plan on buying one anytime soon. I felt the exact same way about the iPod and still do. That doesn't mean, however, that I don't recognize that Apple is pulling off another revolution with the iPhone, akin to what they did with the iPod. The iPhone is revolutionary in the exact same way.
Do you remember "no wireless, less space than a Nomad, lame." That assessment was not wrong, it just failed to account for the market. The iPod was not a lot more featureful than existing MP3 players, or cheaper. What it was was easier to use and learn and provided a smooth easy experience. The iPod was the first portable, digital music player that was easy enough for the average person to rip their CDs, load them onto the device, buy new music online, and play it while jogging. It didn't steal market share from existing MP3 players... it opened up the market to the 95% of people who were still using portable CD players.
The iPhone does the same thing, but for smart phones. It is the first smart phone that is easy enough to use and learn for normal people. It may not have all the features of other smart phones and it may not steal market from RIM's blackberry, but it opens up the market to the 95% of people who just have a regular cell phone and don't even use half of its features because they are too cumbersome. It opens up the market to people who don't even have cell phones but who think having all those features, usable, anywhere they are is worth the price.
Apple's winning strategy is top notch user interface and even more importantly, overall user experience. I'll probably buy an iPhone one of these days, unless someone else catches on that it isn't the look of the device, or how many features are listed as bullet points, or what brand it is and actually delivers a really good smart phone I will actually enjoy using and not be frustrated by.
What about people who hacked their iPhones but are still on the ATT network? My boyfriend was already an AT&T customer when the iPhone came out and wanted one really badly... only to discover that because he was a corporate customer, he couldn't have one because the iPhone wasn't able to be activated for corporate accounts. Pretty lame really, at least from a PR standpoint. I mean, all these corporate customers hauling around iPhones is some of the best damned advertising a company could get!
Anyways, when the hacks started coming out, he bought an iPhone and did the hack so that he could use the phone with his corporate AT&T account. AT&T is getting their money, Apple got their money... and yet he's one of those quarter million phones that was bought to be hacked which is apparently bad. I wonder how these people fit into this discussion of hacked iPhones.
If Apple had just sold unlocked phones, there MIGHT have done just fine. But I think this deal with AT&T dramatically improved their chances. A lot of the process of rolling out a new product is publicity, and making this deal with AT&T gave them an immediate advertizing channel. Plus, Apple is very careful about this "experience" thing, where they control the environment so as to minimize problems. MacOS is awesome for the novice, but to make it usable for an expert does require a fair amount of tweaking with some add-on programs and such. The thing is, if Apple were to ship with these things, they'd be increasing their chances of problems. If you install a third-party app, and the system does something funny, then it's your fault or the fault of the app developer. But Apple does not by any means PRECLUDE these add-ons when you know what you're doing.
This goes along with the current lack of dev kit or the iPhone. The launch MUST go smoothly, with minimal problems. Delaying the introduction of a dev kit gives Apple the opportunity to demonstrate how a virgin iPhone works. If a dev kit had been released with the phone, the market would have been flooded with 3rd part apps that would muddy the waters--people won't necessarily be able to distinguish whether a major problem was the fault of Apple or the 3rd party. People are most likely to blame Apple. Once we're used to virgin iPhones, then when 3rd party apps break things, Apple benefits because we automatically blame the app developer instead.
So, back to the locking issue, supporting a single carrier is FAR easier than supporting everyone. For one thing, AT&T were actually willing to work with Apple in order to support interesting features like the visual voice mail. That is, certain features exist ONLY because of the relationship. If Apple had tried to work with every carrier, then some carriers would not provide services that are an integral part of the iPhone experience that is making everyone drool over it. Add to that the complications of activating a phone. With one carrier, it's trivial. With every carrier, just associating the phone with the network requires technical knowledge that many people don't have. Even if the problems were relatively slight, they would have MASSIVE impact on adoption.
So, I maintain that stricking a deal with a carrier (any carrier, but a specific one) was CRITICAL to the market penetration of the iPhone. This gives Apple the control they need over the network. The contract with AT&T goes both ways. If you can't use your unlocked iPhone with T-Mobile's feature X, you're screwed. If you can't get it to work with AT&T, you call customer service, and they fix it for you. Indeed, you're not going to want to have an iPhone with a carrier that Apple doesn't have a contract with. You WILL run into some technical problem along the way, and you're going to want to have a supported device on a supported carrier. The only difference is that all the carriers use the same phone and would let you migrate between them. (Or they better, else Apple will be doing something stupid or inexplicably failing in the market.)
BTW, those who already own iPhones probably hope that, once the AT&T contract is over, Apple will provide a way to unlock your phone. This might or might not happen. Apple's far better than other PC makers about supporting older hardware, but they also engage in tactical obsolescence. A first-gen iPod will work fine with the latest iTunes, but there are no firmware updates for it, so you don't get, for instance, memory as to where you left off when you were last listening to an audiobook or podcast. Every time you patch a device's firmware, you take a risk of breaking it, so there are not just profit but also engineering reasons to not provide an "it ain't broke" update like that, even if the newer iPhones are unlocked.
Try again:
Vacationem: "leisure, as being free from duty."
Advice: on VPS providers
I tend to disagree. First off, it's not merely kickbacks, Apple gets a portion of the monthly fees during the contract. That is revenue for years after the initial product sale. Compare this to an ipod in which they only get their money for the initial sale. You can't think that Apple wasn't drooling over this. And, in fact, they took the same deal to the carriers in Europe. To the people that say they don't want to sign up for a contract for an unsubsidized phone, its actually kind of the reverse. Instead of the carrier using a portion of your fees to make the phone cheaper for you, they are using a portion of your fees to pay off Apple. I don't think the parent is right when he says that Apple's actions are going to our benefit.
There absolutely was specific demand for it. People were clamoring for it well before it was announced. You can even look at it as an evolution of the ipod and forecast the demand. There is no way that a company like Apple can't do the proper market research and figure that out. And, as mentioned, they are pulling the same tricks in Europe after they have tons of forecasting data to build upon.
Apple doesn't need carrier lock in for market penetration. Again, this is APPLE, not HTC or something like that. They have etablished marketing and distribution channels for consumer electronics.
For Apple, this is only about maximizing profit. They know the end user will pay and they know that AT&T will pay, so they're milking it. I think that AT&T only signed up as a defensive move.
Apple's locking is to benefit their bottom line and nothing else. They could have released it unlocked with no carrier tie in and they would have sold a lot more than they have now, but they wouldn't still be reaping the benefit for two years. I think the iPhone is a cool device and am still considering getting it, but I don't for a moment think that Apple cares about wireless freedom; they care about what's in my wallet.
Now, if you want to talk about the price cut tactic with regard to market penetration/share, I'm all with you.