Apple Cracks Down On iPhone Unlockers

An anonymous reader writes "It looks like Apple and its wireless operator partners have finally figured out a way of cracking down on iPhone unlockers by making it a requirement to sign up for a contract before you can get your hands one. "It's obvious why this has happened though. This method means you're tied into a contract, or you're paying O2 and Apple a massive wad of cash for the privilege of owning a 3G iPhone. We're disappointed about this decision, but it does make business sense." Both ATT in the US and O2 in the UK are implementing the new activation system on July 11th, when the iPhone 3G goes on sale."

Correction

[Mateo_LeFou (859634)]

"a massive wad of cash for the privilege of owning a 3G iPhone" If you're not allowed to do what you want with the device, you do not own it.

Re:Correction

[OverlordQ (264228)]

If you're not allowed to do what you want with the device, you do not own it.

You can do what you want with it after you buy it. You just need a contract to buy it, slightly different.

Re:Correction

[sirambrose (919153)]

You can also cancel your contract and keep the phone by paying a $175 termination fee. Since the new models are $200 cheaper than the old models, the new phone is still cheaper than the old one that cost $400.

Re:Correction

[God'sDuck (837829)]

Or you get the contract and immediately resell it on one of the contract trade sites: http://www.google.com/search?q=trade+cell+phone+contract [google.com]

O2's network is not good enough

[onceuponatime (821046)]

If O2's network was good enough I wouldn't have so much of a problem with this. However, O2's network is simply not worth being tied into. I put an O2 sim into my HSDPA phone (TyTN II) and I swear it wasn't even getting 64kb/s, so it's not going to benefit much from the 3G version. If this were on Vodafone in the UK, I would extend the contract as that was several times faster than O2's when I tested it (It felt about 5x faster at least).

Re:Correction

[eiapoce (1049910)]

You can also cancel your contract and keep the phone by paying a $175 termination fee. Since the new models are $200 cheaper than the old models, the new phone is still cheaper than the old one that cost $400.

Are they unlocking the terminal after the cancellation? Otherwise it's not like you really own it afterwards...

Re:Correction

[Wireless Joe (604314)]

This may be posted further down, but the one thing this guards against is the people who buy multiple iPhones to resell. AT&T won't let you sign a new contract for a number of months (year?) after you cancel one. So you'll only get to buy, cancel and resell one phone per SSN.

Re:Correction

[Dr. Spork (142693)]

Yeah, you can do that, but you'll have a $475 locked phone. What are you gonna do with that? Most likely, you'll get an illegal unlock, but then you'll want contract with some provider. Since it's an iPhone, you'll want a data plan as well as a voice plan... and market rates for that are about $80+ per month. So you bought out your contract... why?

AT&T isn't exactly cheap, but their plans are not out of bounds of the market rates. Seems like the smart thing to do is to just stay with AT&T, enjoy your warranty and feel safe that a stealth update won't brick your phone.

Re:Correction

[Miseph (979059)]

A lot of people hate AT&T for a wide variety of reasons. The most common I've heard is that they really liked Cingular prior to the merger, but afterwards started to have billing problems and find dead spots.

In any case, that French law sounds solid. Vendor lock in isn't cool when cell providers do it either.

Re:Correction

[MrPerfekt (414248)]

Because some people irrationally think that one American provider is better than another... which is patently false. They all suck.

Re:Correction

[0100010001010011 (652467)]

And an unlocked iPhone will help Verizon customers how? iPhone is GSM. There are currently 2 main providers of GSM in the states: T-Mobile and AT&T.

Re:Correction

[xouumalperxe (815707)]

You saved one character by clipping "parents". It wasn't worth loosing your credibility ;)

He was just being considerate, and saving you a character so you could splurge on "losing".

Re:Correction

[Builder (103701)]

You're wrong about that. A number of countries will have two providers for the iPhone.

Re:Correction

[vhogemann (797994)]

On top of that,

Here at Brazil the operators can't sell locked phones. It's the law... some laws here were made to actually protect the consumer.

Yes, that's right. IPhone will be sold unlocked here at Brazil.

Re:Correction

[linuxci (3530)]

I doubt it. I believe that in Steve's presentation yesterday, he said that the maximum price anywhere in the world would be $199... meaning that they aren't going to allow any unlocked iPhones. Not to mention, everywhere (that I'm aware of) that Apple is selling iPhones, they're doing it with exclusive agreements with one carrier in each market.

Not quite true, in many of the new markets (Australia and Italy for example) they've signed multiple carriers.

For the contracts already negotiated such as AT&T for the US and O2 for UK, they had to remain exclusive, but I do get the feeling that Apple are learning as they go along here and if they'd had the opportunity they'd probably open it up to more carriers in their original markets.

Re:Correction

[molarmass192 (608071)]

Italy does not have an "exclusive" carrier agreement. Also, France does not allow a phone to be sold only when tied to a contract. In fact, I think France forbids the selling a phone without an unlocked option. There's also some similar weirdness in Germany. So, regardless of what Steve said alluded to in his presentation, not much will change wrt the current iPhone options in Europe.

Re:Correction

[orasio (188021)]

In fact, I think France forbids the selling a phone without an unlocked option. There's also some similar weirdness in Germany.

Similar weirdness?

So, forced bundling is the normal thing, and regulations against forced bundling are weird?

With that kind of thinking, it seems like everything big corporations choose to do is to be redefined as the normal thing. Or does the corporation need to be C00l, and have a turtlenecked CEO?

Re:No turtlenecked CEO necessary

[LKM (227954)]

Except when you can't. In the U.S, it's probably no big deal if you can't get unlocked phones. In Europe, where you can't spit without hitting two other countries, it is. The people here want phones to be unlocked by government mandate; some governments have followed the people's will. That's what typically is supposed to happen in a democracy.

Re:Correction

[gutnor (872759)]

There are countries like Belgium where it is illegal to sell a locked phone.

In Belgium there is no concept of subsidied phone. You buy your phone and your contract separately.

Some other countries like France allow locking but still requires that an unlocked version is sold ( it is currently possible to buy an unlocked iphone in France )

Sure Apple could buy a law, but it more realistic to think that the 199$ 'maximum price' was a hyperbole. ( Also think that currently the USD is worth nothing - taking Steve speech literally would mean an iPhone for 100 GBP in the UK - yeat, you can barely enter a Apple Store with that money in your pocket. )

Re:Correction

[blackholepcs (773728)]

That's the problem with companies today. They "lease" you the equipment, with hidden terms and rules, and bullshit marketing that omits important facts that relate directly to your decision to purchase (lease) their product. Cell phone companies are one of the worst for this.

Re:Correction

[ConfusedVorlon (657247)]

That's the problem with consumers today. They'd rather "lease" a discounted phone and pay more in the longer term with higher locked in rates.

Cell phone buyers are the worst for this, they more or less destroy the market for buying phones seperately.

Re:Correction

[Angostura (703910)]

That's the problem with cell-phone companies today. They subsidize the cost of the equipment, in the expectation that they might get some call revenue in exchange. Then they get all annoyed when you don't give them any call revenue. Weird that.

Laughing my ass off

[goombah99 (560566)]

That's the problem with companies today. They "lease" you the equipment, with hidden terms and rules, and bullshit marketing that omits important facts that relate directly to your decision to purchase (lease) their product. Cell phone companies are one of the worst for this.

Whooo boy. you must be still wet behind the ears. You see sonny a long long time ago, there were these things we now call land lines and POTS. And back then no one owned their own telephone. Indeed almost all telephones looked alike because there was only one place to get them. Lease them from the telephone company to put onto their network.

It was not until deregulation (carter era?? I cant quite recall when it happened now) that you could buy any old phone and attach it. It may also surprise you to learn there was only one phone company too.

At the time it made a lot of sense. The networks made a lot of assumptions about what was connected to them. They trusted the hardware. they trusted signals coming in from other nexuses. trust trust trust.

but just like trusting client side authentication leads to grief, the rise of phone phreaks injecting their own signals into a trusted network led to free phone calls.

I can still see why the cell phone company has reasons that they don't just want to permit any possible activity on their network. They are all about quality of service for as many possible people not an all-you-can buffet where a few people can pig out.

But I digress. Leasing telephone equipment has been the norm since alexander graham bell. this little experiement where you "purchase" a phone then lease the line has been pretty short lived so far. So get over it.

Re:Correction

[stormguard2099 (1177733)]

I own a baseball bat. Am I allowed to smack you upside the head with it a few times?

Depends on if you are in the majors or just in the minor league

Re:Correction

[elrous0 (869638)]

If Apple cared about ethical behavior towards us, they would also offer an unsubsidized version for consumers at a higher price. Since they refuse to do that, why do we owe them anything?

Re:Correction

[salmosri (1051404)]

They do, in the UK you can purchase the new iphone on the pay as you go deal, which means no contract you pay the full price for the phone and you can do as you wish with it. Here [techcrunch.com] is some info from the O2 deal.

Just what ethical duty is that?

[thefinite (563510)]

And exactly what ethical duty to us would they be upholding by offering an unsubsidized, contract-free iPhone?

I'm curious to hear your answer because, while the grandparent was right about the ethical duty of fulfilling a contract you agree to, I don't think Apple owes an ethical duty to us that would require them to offer an unlocked phone.

Re:Just what ethical duty is that?

[mumblestheclown (569987)]

New to slashdot, are you? Things that you can learn from slashdot include:

• you have a right to pirate something if it is not for sale in your area.
• you have a right to pirate something if you want it in a format in which it is not possible to purchase
• companies have an ethical duty to make GPL drivers,
• if you have some grievance against a company where the question is about whether you get some good/value/service from the company by being in violation of some law, contract, agreement, statute, or convention, you are nevertheless justified in doing so since while you are small, the companies are big.
• and on and on.

welcome to the home of situational ethics!

Re:Correction

[howdoesth (1132949)]

...wireless providers have no standards whatsoever (ethical or otherwise)...

CDMA? GSM?

Re:Correction

[Firehed (942385)]

I had more meant along the lines of business practices.

Ok, they do have one (and it never involves lubrication). You can fill in the blank.

Re:Correction

[Machtyn (759119)]

And nobody ever expects the Spanish Inquisition!

Re:Correction

[NtroP (649992)]

Slavery is a step up from living on the streets homeless and hungry (or being beaten to death), but that doesn't make it moral, nor something I should support if given the choice. I keep hearing your reasoning to justify using third-world slave labor, and I still find it unsavory.

I grew up in a third-world country. It's not "Slavery". People are falling all over themselves to get and keep these jobs. If there is anything negative to be said it's that there is no job security. What we would consider "poor working conditions" and "low pay" is a gold mine to these people. Stop trying to help them out of their jobs. Talk to them and they will tell you that.

Are there bad bosses? Sure. That happens everywhere. Are there some places that have poor working conditions? Sure. And we need to bring those to light and pressure them to improve. But for goodness sake, don't take these people's jobs away from them.

Going to be hard in most european countries.

[splutty (43475)]

Apple is going to have a serious problem applying this in a lot of European countries. They have laws that actually forbid this sort of tying 2 vendors into 1 product.

I know for a fact that France and the Netherlands have laws for that, and if I remember correctly, Germany has as well.

So either they're not going to be able to sell iPhones there, or they have to be sold seperately, which then opens them up for unlocking anyway.

Re:Going to be hard in most european countries.

[larry bagina (561269)]

Vodafone sued T-Mobile/Apple (in Germany) over that and lost [During the lawsuit, they sold an unlocked iPhone for 999 Euros]. Orange (France) sells an unlocked iPhone for 749 Euros vs 399 locked. So nothign will change (except maybe a lower price for the locked version).

Links broken

[SuperKendall (25149)]

Your links are broken, they point to something that is not quite as good as, much less superior than, an iPhone... even the current one. Especially so though after the July 11 software update and app store.

but it's not subsidized by the voice and data plan, so you pay a penalty for buying one.

It's very nice but it's simply no iPhone. It's not even as good as potential Android devices quite honesty, why you would buy an N95 now without considering an Android device coming before too long seems like a weird choice.

This makes sure the new iPhone is NOT CHEAPER.

[BoldAC (735721)]

The contract lock-in insures that the new iPhone is more expensive than the last.

If you do the iPhone math [tech-recipes.com], the new phone will cost you more than the older phone despite the "half the price" ad campaign.

If AT&T really drops free sms, it'll cost even more.

I don't mind paying more. However, for somebody like me not in a G3 area, why should I have to pay the G3 transfer higher prices?

As far as I recall...

[oahazmatt (868057)]

As far as I recall, Apple was actually shopping around for a few different providers. Apparently when they were in talks with Verizon there were too many demands on Verizon's end. (Surprised?) AT&T was the largest carrier available willing to let the phone be what Apple wanted it to be. Just something to think about.

Thank goodness for Android

[0xdeadbeef (28836)]

While carriers might still be able to lock Android phones, there will undoubtedly be unlocked phones available, since there is no monopoly on the platform.

Apple + AT&T = single point of failure

Think about how absurd it would be if, in the old days, you had to buy your computer from the phone company because it had a modem?

Just wait ...for ...it ...from the Chinese!

[Zymergy (803632)]

Time will likely solve this issue as Chinese reverse-engineering development teams (and "ghost shifts" at probably the same factories making current 'official' 3G iPhones get to cranking out 'overages' lol)

Then again, if the killer app is not the device but the method by which it is unlocked.... surely this will not increase handset theft or there is always the 100% 'honest' 3G iPhone vendor unlocking the phones in house for some under the table cash?

Just what is so technically savvy about the new unlocking method or is this simply some lawyer-authored bulletproof contract that one must sign in fresh blood?
I for one compliment the cloners in order to avoid those ridiculous lock-in contracts. This is the world of competition, and the nature of global competitors.

How useful would it be for Asus' eeE PC to only work under contract and only from an Asus Wi-Fi router? It is a matter of time before someone creates a truly unlocked Wi-Fi handset that VoIPs whenever possible with Vonage et al, and other times uses the SIM for whatever carrier you choose to use that day. I can use my laptop with a variety of pay ISPs even at the same time. A few more evolutions of these devices and stiff competition will likely leave consumers getting a better product not crippled deliberately. This is why I despise the iTunes lock-in on iPods (and will not own one as a result). I remember when MP3 Players were as easy to access as USB memory sticks and they played nearly anything despite its source... Given Apple does make some sharp looking items, but they are not consumer-friendly due to their hardware lock-ins. I'd love to use Tiger or Spotted-Leopard or whatever it is called these days on my Intel PC hardware, I'd love to just use windows explorer to copy MP3 files onto my Nano. I'd love to swap SIM chips in my iPhone and use whatever carrier I am using at the time... But NO.. They are lawyer-empowered consumer-restraining capitalists above all else. So I pay for and own NONE of the Apple devices mentioned above.

Going To Do Wonders...

[Nom du Keyboard (633989)]

Isn't this illegal tying?

If anything this is going to do wonders for Apple iPhone sales in a downward direction. Make it even harder for them to reach the magic 10 million sales in a year -- make that 18 months now.

Three words: "Nokia N800 series"

[paco verde (561678)]

The iPhone alternative (for freedom lovers) [cnet.com]

"This article [cnet.com] explains how to get an even better mobile Internet experience, without having to do business with either AT&T or Apple--with no contracts and no $60 per month bill just to surf the Net."

(Surveillance State blog [cnet.com])

Re:ER, non-story

[Thelasko (1196535)]

Um, this has always been the case, since the first round of the first models started being resold without contracts Apple instigated this. Old news, non-story, and hasn't actually stopped anyone from doing this.

I think this is news to people in Great Briton. For those of us in the US, this is not news at all.

Re:ER, non-story

[x_MeRLiN_x (935994)]

Great Britain was the island you were looking for. 'Great Britain' and 'United Kingdom' are also not interchangeable.

Re:ER, non-story

[Silver Sloth (770927)]

Great Britain is a country

a great Briton is an inhabitant of that country who is either (a)notable or (b)obese

And, ok, mod me off topic, I've got the karma to burn.

Re:ER, non-story

[jrumney (197329)]

Great Britain is a country

You deserve the mod points for the insightful statement that follows this, but I have to take exception to the above. Great Britain is an island, which contains the countries of England, Wales and Scotland, and forms part of the sovereign state of The United Kingdom of Great Britain and Northern Ireland, or UK for short.

Re:I don't see how it makes good business sense

[DrXym (126579)]

O2 are crap, most people in the UK realise this, it's one of the main reasons the iPhone has failed to take off in the UK.

Nah, it has more to do with the fact that the iPhone is ludicrously expensive AND you must lock yourself into an expensive 18 month contract.

Perhaps that strategy works in the US. It doesn't work in Europe where you can literally have any phone for free on the sorts of tariffs and contracts the iPhone ties you to.

Re:Seems reasonable

[Serious Callers Only (1022605)]

It happened with my old 8525 to get the $600 phone down to $285, and now it's happening with the iPhone to get the $400 phone down to $200.

Only reasonable if you don't realise that $325 price drop was taken out of your fees for the next x years of contract.

We'd be much better off if mobile phones were sold as items like computers or telephones, without contract, and the phone companies concentrated on providing a good service, instead of 'adding value' by gimping phone software, charging insane amounts for data, or tying users into long term contracts.

$500 is a reasonable price for the technological marvel which is a modern cellphone, if you can't afford that, perhaps you can't afford a highly priced monthly contract either.

As it is in the UK the iPhone may be available without a contract from O2 via the Pay as you Go packages, but they're being remarkably coy about that, they probably want to sucker people into signing 18 month contracts for 30-75GBP a month first before unveiling PAYG.

I see why Apple has done this (as you say it's standard practice) but that doesn't make it any more palatable.

PS Can't translate a £ symbol !! WTF Slashdot, this is 2008.

Re:Seems reasonable

[elrous0 (869638)]

Getting cell phone companies in the U.S. to abandon the "locked-in" model at this point would require a new law or high-level legal ruling. And, since the telecoms basically own Congress and the Presidency, it ain't gonna happen.

Re:Seems reasonable

[MBCook (132727)]

If I'm going to be locked into a contract either way, I'd much rather have my phone subsidized (new plan) than not (old plan).

I was all set to buy one of the new iPhones until more data started leaking out. You know that nice iPhone plan they had? 450 minutes, unlimited data, 200 SMS for $60 a month?

Gone

In what can only be described as "easier", you now have to use the standard AT&T model. Their lowest plan is 450 minutes which is $45. You have to add $5 to get 200 SMS messages (note: this seems to include MMS and other things too, which is different). Then there is the iPhone data plan that you are required to buy: $30 a month.

So instead of a simple little $60 plan, they now expect me to pay... $80.

So let's see... $20 difference per month X 24 months = $480. Take out the cut they were paying to Apple (wasn't it like $5?) and that's another $120.

So AT&T's revenue goes up $600 per two year 3G contract.

I'm not so sure I want to pay $80 a month for an iPhone. I was hesitant with $60 but this makes me question things much more.

Congratulations again AT&T. You took the must buy product of the year for me and managed to screw it up.

You need a contract

[DrYak (748999)]

We'd be much better off if mobile phones were sold as items like computers or telephones, without contract, and the phone companies concentrated on providing a good service, instead of 'adding value' by gimping phone software, charging insane amounts for data, or tying users into long term contracts.

None the less, you still need a contract with some GSM or 3D operator to be able to use your phone. Otherwise, you'd be buy an iPod Touch instead.

So while you're at it, as you'll be buying a phone and a contract anyway why not the phone company giving you some rebate as they're going to make wads of cash from the monthly fee any way ?

The only current problem with the iPhone is that they have exclusive contract with some service providers.

Whereas, in several European countries (including here in Switzerland, but also mandated by law in France as reported recently on /.), you just buy whatever phone you want from the shop. Either you pay the phone full price. Or, if you sign a new contract or extend a previous one, that contract's provider gives a N$ rebate, to be used with whatever phone you choose to buy simultaneously in the same shop. The amount of rebate depends on the contract you picked up.

The two aren't even bound together (the phone was just taken from the shelf) and nothing forces you to use this contract and this phone together (you could cheaply get and extra handset by extending your own current contract and give the phone as a present to you S.O.)

Some service providers have their own shop which may sell some special package with a "special edition phone" (= read : the provider logo on the phone's shell, 1 additional customized screen background and ringtone, and some preinstalled crap that you won't use at all).

But in most shops and malls, you just pick up the phone you want, and eventually the contract you want from the provider of your choice.

The idea of subsidizing phone with provider contract isn't stupid. It's the complete lack of choice for those contract that is debilitating.