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]

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.

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:Correction

[howdoesth (1132949)]

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

CDMA? GSM?

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).

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.

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

[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

[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.