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German Court Rules iPhone Locking Legal 146

Posted by kdawson
from the help-pay-for-the-patent-settlement dept.
l-ascorbic writes "A German court has overturned Vodafone's temporary injunction against T-Mobile. Two weeks ago, the British mobile network won an injunction forcing T-Mobile to sell iPhones that were not locked to its network. Vodafone argued that locking is an anti-competitive practice, and sought to force the German network to permanently allow the use of the phones on other networks. After the injunction was granted, T-Mobile offered the unlocked phones for €999 ($1473), and these will now be withdrawn from sale."
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German Court Rules iPhone Locking Legal

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  • in the German press. Still a bummer...
  • Ich bin ein unlocker (Score:2, Interesting)

    by Anonymous Coward
    nothing to see here...technical competence will trump DRM every time. Something about information wanting to be free. The US phones are unlocked, the German phones will be too. Just this way, the carriers won't make any money off the unlocking. Remove nose, face, spite. Amazing companies still don't get it.
    • Re: (Score:3, Insightful)

      by Radres (776901)
      Whoa, whoa, whoa... last time I checked, iPhone was still locked to Cingular here in the United States. Yes, you can go through all the trouble of unlocking your phone, which the average person cannot be bothered with. The point of this story is that the idea of locking phones to plans in Europe is immediately recognized as something wrong by the courts, and here in the United States it is accepted as a common business practice. Why is Europe always so far ahead of us in this regard?
      • by freedom_india (780002) on Wednesday December 05, 2007 @02:15AM (#21582119) Homepage Journal
        Why is Europe always so far ahead of us in this regard?

        Because they are actually funded directly by the people. And not by corporates.

        Take for instance BBC: It is a public funded news organisation and is the exact opposite of FOX. So BBC has no incentive to like corporate-sponsored candidates and they can actually be true reporters.

        Take France: They always hate monopolies, hate corporatocracy, hate anything US-mass made. So for them to rule against Apple is understandable.

        Germany: Tricky case. The judiciary is fiercely anti-monopolistic but yet corporate friendly. The parliment is neutral and they are bound by EU laws. And secondly German-made products are faaar superior in quality than chinese-products.

        Poland: Fiercely anti-monopolistic and strongly pro-consumer. Alarms corporates a lot.

        Finland/Norway/Sweden: All these 3 have totally different but radically same policy: As long as its made in EU they support it. If not in EU, they have a NIH syndrome.

        Italy: Let them first get their postal service to work.

        Belgium: They can't decide if they want to remain an independent country.

        To conclude: EU is mostly pro-consumer and is not awed by corporate money power primarily because EU member presidents and parliments are funded by taxes and public funds, and not by corporates directly.
        So they can afford to be altruistic !

        • by houghi (78078)

          Belgium: They can't decide if they want to remain an independent country.

          Well, if they would listen to the people, they would know. And there are so many governements that one more or less is not realy an issue. :-D

          On the other side, locking phones in Belgium is illegal. So that means you have a choice and you pay for your phone whatever you like. Wether you pay 40 EUR or 800 EUR for a phone, is completely up to you and wether you do that with a cheap pre-payed card or with something else is also up to you

        • Re: (Score:1, Informative)

          by Anonymous Coward
          Belgium: They can't decide if they want to remain one independent country.

          There. Fixed.

        • Re: (Score:3, Interesting)

          by veso_peso (1029298)

          Take France: They always hate monopolies, hate corporatocracy, hate anything US-mass made. So for them to rule against Apple is understandable.
          Heh, it's quite the opposite. France insisted that competition to be removed from the major EU "goals" from the Lisbon treaty. There are lot of state-run and private quasi monopolies and laws restricting competition, for example in retail and transportation.
        • by Fizzl (209397)
          Wow, at least you are going get a lot of replies...

          Finland/Norway/Sweden: All these 3 have totally different but radically same policy: As long as its made in EU they support it. If not in EU, they have a NIH syndrome.

          What the hell is that supposed to mean?

          Oh wait... I was going to reply to this how much American products we actually have around, but I ended up deriding the said products in every sentence. Then I started thinking about cell phones and how much the Japanese Nokia knock offs suck ;)
          Damn. Poin

        • by cayenne8 (626475)
          "To conclude: EU is mostly pro-consumer and is not awed by corporate money power primarily because EU member presidents and parliments are funded by taxes and public funds, and not by corporates directly. "

          But, in the US, the govt is funded by both the corporates and the people....it is just that the govt listens to the corporates tell then what to do with the people's money. Strange set up, I'll grant you...

      • Okay I'll bite... (Score:5, Insightful)

        by Critical_ (25211) on Wednesday December 05, 2007 @02:29AM (#21582205) Homepage
        You're actually quite wrong here. I am an American who lived in the UK for more than a year. Mobile phones from the big companies are locked in many cases and its not seen as wrong. A trip down to any High Street will yield a few cell phone unlocking shops.

        The more expensive handsets, such as my Nokia E61 or my housemate's Nokia N95, were unlocked. Why? Vodafone's contracts are written differently than any US carriers. When I sign up for a cell phone I agree to pay a lump-sum amount of cash in 12, 18, or 24 monthly payments depending on the length of the contract. Incentives increase with the length of the contract. If I cancel the contract at any time, then I must pay the remainder of the sum and forfeit the monthly payment schedule. In this way, Vodafone is already promised a certain amount of cash in exchange for the handset. They don't care if you leave at that point since they've already made the money.

        I really find it disturbing that Slashdot heralds Europe as some panacea in the cell world. It's really not as bright and wonderful as you people try to make it out to be. Ultimately these corporate entities are out to make money within a certain set of rules. Cell phone locking, unfortunately, is a fact of life in the UK. When it isn't, its because of the way the contract is written.
        • Re:Okay I'll bite... (Score:4, Interesting)

          by totally bogus dude (1040246) on Wednesday December 05, 2007 @03:31AM (#21582459)

          My understanding is that a lot of American phones are "feature locked" as well, i.e. certain features are disabled in order to force (coerce) you into using the higher-priced Telco features. I've heard really crazy sounding things like Bluetooth being disabled so you can't copy songs to the phone for free, you have to download them from your Telco. Is this hogwash, or does it have some basis in reality?

          Also, the phone companies do care if you pay out the contract and leave; a lot of their market value is determined by the number of subscribers they have. While it's true they won't care about an individual subscriber leaving, they do care in the statistical sense.

          I'm in Australia and the UK contracts sound similar to what we have. My latest phone (N73) is with 3, and interestingly enough they appear to subsidise the cost of the phone. I'm paying $22 a month for the handset over 2 years, which works out to be a little bit cheaper (around $100 IIRC) than buying it outright would have been. I guess there might be some trick with depreciation, but I was expecting to end up paying more for the phone over the period in exchange for the convenience of lower upfront costs.

          I can't remember the exact terms of unlocking in my contract, nor even whether the phone is network locked at all (I think most consumers don't really care, if I didn't like the plan they offered I wouldn't have signed up for it). I think it's free after a certain period of time.

          • by I!heartU (708807)
            Yeah we can't take a crap near our phone without going through Verizon. Sure it has bluetooth, but you can only use it for a headset. No getting pics off/on or sounds off/on it. Usually someone will release a data cable that can go into a usb port, then you can kind of mess with on your comp, but that is extra $$. In the near future it sounds like I'll be able to buy whatever and get it to work on their network though. Due to all this 700mhz band being auctioned and Google trying to buy it up.
          • Only Verizon does that to its phones. The other carriers leave the manufacturer software on the phone.
            • Not entirely true. T-Mobile also blocks some manufacturer features on it's phones in the US too. My Nokia I got from them has a few of the features missing or inaccessible.
              • Sprint Samsung A740's seem to have no features turned off.

                If you use non-Sprint content, it gives you a warning and a dialog box that I believe defaults to not continue.
                (can't say I really blame them).

        • by houghi (78078) on Wednesday December 05, 2007 @03:44AM (#21582507)
          The problem is that some people in the USofA see Europe as one country [break.com]. Well, it isn't. Each country has its own laws and political situation.
          E.g. In Belgium you can not sell a contract as part of a phone deal. Also the phone can never be locked. You can sell them at the same time, but you can not sell them as part of one contract.

          I believe it is the same in Portugal. In other countries the situation is different. The fun part is that because much of Europe is one economic entity, you can easily buy a phone in another country unlocked and no contract and use it where you live.
        • Hmm, the handsets that are locked in the UK (I live in the UK so I know and worked for Vodafone for 5 years) are locked up to the point of sale. After this point, you can ask to have the lock removed (as I recently did after signing a new contract with Orange UK) which will normally cost you around £20 (US$40 at current exchange rates!).

          The handset locks are there for a different reason: rather than stopping you using your handset/hardware on another network, Network Operators are ensuring that handse
        • Re: (Score:3, Interesting)

          by Builder (103701)
          I think you're missing a major point here though... I rely on having unlocked phones and always will, but I still keep to my O2 12 month contract.

          I travel in Africa a lot and in many places out there, I cannot roam on my UK sim. So when I'm in-country, I simply remove my O2 sim, put it in my wallet, and load up a local sim.

          I couldn't do this with an unlocked phone.

          Both O2 and Vodaphone supply phones unlocked (except for the iPhone from O2) and this is a major reason I stick with these providers (depending o
          • by jpkunst (612360)

            I couldn't do this with an unlocked phone.

            Surely you mean: I couldn't do this with a locked phone?

        • by dr_d_19 (206418)
          I really find it disturbing that Slashdot heralds Europe as some panacea in the cell world. It's really not as bright and wonderful as you people try to make it out to be. Ultimately these corporate entities are out to make money within a certain set of rules. Cell phone locking, unfortunately, is a fact of life in the UK. When it isn't, its because of the way the contract is written.

          In Sweden phone locking is not unusual, but far from the norm. Getting the phone and a contract separately is no problem what
        • Ultimately these corporate entities are out to make money within a certain set of rules.

          While this is true they can't just behave as badly as their US bretheren, or they'll get a good whacking by some EU commissioner.

          Case in point: Their partially outrageous roaming charges where heavily capped this year, since they failed to regulate themselfs in any serious and tiemly manner.

          • IIRC they went from outragously high to fairly high.

            Afaict you can take most US mobiles anywhere in the US without paying roaming charges but in the EU you will pay roaming charges as soon as you leave your own country.

            • This is from FT.com:

              Under the agreement, the price of making a call while abroad will be capped at 0.49 per minute, before VAT. While existing roaming charges vary widely, they are generally significantly higher.

              from the same article:

              A four-minute call home by a French customer in Italy costs 4.72 ($6.39, £3.19), while an Austrian phoning home from Malta would pay 9.51, according to EU data.

              For your other reasoning (and that's a guess): A Verizon customer, residing in LA uses the Verizon network

      • The point of this story is that the idea of locking phones to plans in Europe is immediately recognized as something wrong by the courts, and here in the United States it is accepted as a common business practice. Why is Europe always so far ahead of us in this regard?

        It was my understanding that Germany overturned the injunction against T-mobile which would have prevented them from locking people into an exclusive contract on the i-phones. In that case, I think the point is that Europe isn't as hard on m

        • by Rulke (629278)
          The selling of the iPhone locked to one vendor can hardly be called a monopoly... there are other phones and there are other providers, just because that specific combination is not available everywhere doesn't qualify. That is also the sole reason that the court has ruled in favor of the deal. But there is another case open because T-mob might very well be in violation of their license http://news.zdnet.com/2100-1035_22-6219520.html [zdnet.com] and if Debitel succeeds in this case the iPhone will again be free.
      • by umghhh (965931)
        have you actually read TFA or original post? It actually said that the court overturned the injuction i.e. in your words 'europe is not ahead of you'. We are not better than you are although some people here in EU may like to think so. After all this traveling to get my bread and butter I tend to agree with what has been said about Europe and US in Pulp Fiction - it is just small things that are different but the shit is the same. Alas sucking up the ass of big business by courts and politicians is as advan
      • "The point of this story is that the idea of locking phones to plans in Europe is immediately recognized as something wrong by the courts,"

        The story is about exactly the opposite. The German courts say there is nothing wrong with it.
    • Re: (Score:2, Informative)

      by Kiku888 (1198673)
      Not all US iPhones are unlocked fully yet. If you were lucky to buy one with version 1.0.0/1.0.2/1.1.1 of the firmware, then you are good to go. But if you have the newest iPhones (including ones sold in the UK), then you got version 1.1.2 with newest bootloader, then you are out of luck so far. See more details here [google.com] about the iPhone unlocking status.
  • by calebt3 (1098475) on Wednesday December 05, 2007 @01:06AM (#21581771)
    Will the already-sold phones remain unlocked? Or is another bricking patch on the way?
    • I'd say unlocked, too much threat of a lawsuit, etc because of the presumably thousands people that bought the phone unlocked. The key is what would keep it unlocked, I bet that will fall into some hands that turn it into an awesome patch.
    • by Alwin Henseler (640539) on Wednesday December 05, 2007 @02:10AM (#21582109) Homepage
      From the article:

      In the two weeks since the temporary injunction was granted, T-Mobile sold the handsets without a network contract for 999 euros ($1,477; £719). That price was a significant premium to the 399 euro cost for a phone with a two year T-Mobile contract.

      A significant premium indeed, 600 Euro extra NOT to be locked into a T-Mobile contract. For that reason alone, you can be pretty sure that phones sold as unlocked, will stay that way (and functional). Consumer protections are pretty strong in Germany. If a firmware update would re-lock or brick those phones, Apple or T-Mobile would face a class-action lawsuit, and surely lose it.

      Probably more interesting is how Apple will provide firmware updates for these unlocked phones, as compared to updating phones that are locked to a specific provider. If it works exactly the same for locked and unlocked phones, that should give clues for a reliable/safe hack (that doesn't risk bricking your phone with future updates). If the procedure is different, that should give good info as to what exactly makes the phone locked. Either way, the mere existence of legally unlocked phones should be a boon for hackers (thank Vodafone for this side-effect of the temporary injunction).

      Although it's a nice piece of hardware, I'd rather throw my money at one of these OpenMoko [openmoko.com] phones (when they're released as consumer-ready).

      • Re: (Score:1, Informative)

        by Anonymous Coward
        There are no class action lawsuits in Germany. Each proud owner of an iBrick would have to sue T-Mobile individually.
        • by hoover (3292)
          Hm, I'm not too sure about this. Ever heard of the term "Sammelklage" (collective suit)?
          • by lobStar (1103461)
            Another common way is to cooperate and push one "pilot case" though the courts, and then if it loses, pay the court costs for that person together. And if it wins, the defendant will usually choose to settle with all other plaintiffs at the same terms as the pilot ruling.
      • by Tom (822)

        If a firmware update would re-lock or brick those phones, Apple or T-Mobile would face a class-action lawsuit, and surely lose it.

        Two different things. My iPhone is unlocked, and yet I only paid 399 and have a T-Mobile contract.

        You can (could) buy one for 999 without a contract. During the time the injunction was in place, T-Mobile also unlocked your phone (i.e. removed the SIM-Lock) for free if you bought one with a T-Mobile contract.

        Why is that not just a technical difference? For me, it means for example that I can use the SIM card from my business phone for business calls without having to carry two mobile phones. Also, it means

        • TFS says:

          After the injunction [to Vodafone] was granted, T-Mobile offered the unlocked phones for €999 ($1473), and these will now be withdrawn from sale [thanks to the overturn]."

          You said:

          You can (could) buy one for 999 without a contract. During the time the injunction was in place, T-Mobile also unlocked your phone (i.e. removed the SIM-Lock) for free if you bought one with a T-Mobile contract.

          So, unless the summary is wrong (would be no surprise), it is incorrect to say they unlocked normal

          • by Tom (822)

            it is incorrect to say they unlocked normal 500-contract phones for free;

            I have a 399 unlocked iPhone here to prove it. :-)

            They responded to the injunction in two ways, because it had two parts. Part one, the SIM-lock, response: Remove it if customer asks for it. Part two, the 2-year-exclusive-contract, response: Sell for 999 without a contract.

            In my case, I bought for 399 with 2-year contract, asked for the SIM-lock to be removed, and a few days (and a phone call) later, I could use my E-Plus SIM card in addition to the T-Mobile card it came with.

      • by 3247 (161794)

        A significant premium indeed, 600 Euro extra NOT to be locked into a T-Mobile contract. For that reason alone, you can be pretty sure that phones sold as unlocked, will stay that way (and functional). Consumer protections are pretty strong in Germany. If a firmware update would re-lock or brick those phones, Apple or T-Mobile would face a class-action lawsuit, and surely lose it.

        There surely are no class actions in Germany.

        However, Germany has a legal system in which it is feasible to sue big corporations a

  • by Mukunda_NZ (1078231) on Wednesday December 05, 2007 @01:20AM (#21581863) Homepage
    What about the stupid German anti-hacking laws? Or is it okay for corporations to circumvent this kind of restriction? I'm guessing it probably is... But I wonder what would have happened if it was just individuals doing this, would it have been allowed then?
  • by r00t (33219) on Wednesday December 05, 2007 @01:21AM (#21581871) Journal
    The masses will snap up "cheap" phones with evil contracts that can't be comprehended by non-lawyers.

    Other phones become a niche product with rising costs. Eventually nobody offers them, because they are less profitable.

    You're getting the US cellphone industry. Enjoy!
  • Oh please... (Score:1, Insightful)

    by JBMcB (73720)
    "Apple still faces two lawsuits in the US from people alleging that preventing users unlocking their iPhones is an unreasonable restriction of consumer choice."

    I'm sorry, but it's a friggin' cell phone. If you don't like the terms of service then don't buy one. I don't like AT&T so I'm not getting one.

    Verizon, on the other hand, is opening up their network and embracing Android, which will hopefully start up the unlocked cell phone market in earnest. Shrewd move on Verizon's part, this will turn up the
    • Re:Oh please... (Score:5, Insightful)

      by timmarhy (659436) on Wednesday December 05, 2007 @01:50AM (#21582007)
      The "if you don't like it don't buy one" logic only works to an extent, every single time a vendor locks a phone it squeezes the market place a little more. The bottom line is I should be able to do what i want with something i pay for, and apple can fuck off and die if they think their control should extend past the sale (or any vendor for that matter)
      • Re:Oh please... (Score:4, Insightful)

        by adolf (21054) <flodadolf@gmail.com> on Wednesday December 05, 2007 @02:08AM (#21582097) Journal
        If I had mod points, I'd use 'em. But I don't, so I'll just voice my agreement instead:

        If it's my stuff (ie, not leased, or rented, or otherwise owned by another party), then I'll be doing whatever the fuck I please with it, as long as it is legal, and nobody can stop me.

        The free market works in a lot of different ways. The same ideology that states "if you don't like the Terms of Service, don't buy it" also states "if Apple doesn't want people fucking with the hardware they sell, then they should stop selling it to people."

        • by remmelt (837671)
          You're right and I agree, but you don't have a free market. IANAE so I don't know the definition of Free Market, but Wikipedia does:

          "A free market is a market in which prices of goods and services are arranged completely by the mutual non-coerced consent of sellers and buyers, determined generally by the natural law of supply and demand."

        • I seriously doubt Apple would cave in even if told they must be sold without a SIM lock. They would simply redefine the terms of purchase to be a lease. As such they could do what they want. End of contract, phone goes back to AT&T or Apple. They won't care of the condition as the contract terms were just to avoid future lawsuits and keep their lock in.

          Like others said, its a damn cell phone. It has convinced me that a touch only interface sucks for a phone and for typing. Sure you can do it but c
        • The same ideology that states "if you don't like the Terms of Service, don't buy it" also states "if Apple doesn't want people fucking with the hardware they sell, then they should stop selling it to people."

          Apple doesn't give a rats ass about what you do with the iPhone once you've bought it. Note, they're not suing people who unlock their phones, intentionally bricking phones, or doing anything particularly nefarious. In fact, they provide warnings that mention "This update could brick your phone". Apple

        • Yes, you can do anything that you want with it. You have physical possession of it and it's yours. If you want to open the case, swap out the SIM card, use Jailbreak, or even braze legs onto it, you're perfectly free to do so. But if Apple says that any of these things voids the warranty, they are under no legal compulsion to fix your phone if you screw it up.
        • by arminw (717974)
          ....."if Apple doesn't want people fucking with the hardware they sell, then they should stop selling it to people.".....

          You can do *anything* you want with your Apple phone. Run it over with a truck, throw it off a 12 story building, or install some hack to use it as it was not intended. Apple couldn't care less. Just don't ask them to honor the warranty or support it if you do any of the above. The hacked phones may work fine, as long as you don't ask Apple to maintain or improve it by downloading their u
      • Re:Oh please... (Score:5, Interesting)

        by DustyShadow (691635) on Wednesday December 05, 2007 @03:11AM (#21582389) Homepage

        The bottom line is I should be able to do what i want with something i pay for, and apple can fuck off and die if they think their control should extend past the sale (or any vendor for that matter)
        A little off topic here but the Supreme Court is taking up this issue right now in the LG v. Quanta case. It's a case that asks whether patent owners can impose restrictions on what you can do with a product after you buy it [eff.org]. The law right now says that they can restrict you however they want by using licenses. Many are saying that the Supreme Court only hears cases from the Federal Circuit when they want to reverse them so you just may get your wish.
      • by MistaE (776169)
        Well I do agree with you in theory, I hope you realize this ISN'T how it all markets work. The bottom line is, as of right now, locking a phone is not against the law. Some circles would argue that the act of unlocking the phone violated the DMCA as not falling within one of the very few 'fair use' exceptions codified in that chapter.

        What does this mean? It means that companies CAN control what you do past the point of sale (or at the very least, the government can control what you do and can pass off th
    • by GenP (686381)
      Something about a race to the bottom...ah well, can't be that important.
  • 999 euros?! (Score:3, Interesting)

    by RuBLed (995686) on Wednesday December 05, 2007 @01:35AM (#21581931)

    T-Mobile offered the unlocked phones for 999 ($1473)


    That's the first thing I had noticed. Is that the true cost for an unlocked iPhone? I had thought selling a phone for $500 is insane, I might have yet to see everything...
    • Re: (Score:3, Informative)

      by Descartes (124922)
      It doesn't really surprise me.

      If you read some of Apple's statments when they released the iPhone they mention that they're figuring the revenue differently. They said that the revenue from iPhones would be spread out over the term of the service contract. My impression was that AT&T was actually paying Apple a share of the monthly service charges.

      It does seem a little pricey anyway. Maybe T-Mobile was trying to discourage people from going for the unlocked phones.
      • Re:999 euros?! (Score:5, Interesting)

        by Darth (29071) on Wednesday December 05, 2007 @04:47AM (#21582723) Homepage
        If you read some of Apple's statments when they released the iPhone they mention that they're figuring the revenue differently. They said that the revenue from iPhones would be spread out over the term of the service contract.

        When Apple said that, they were referring to realizing the revenue for accounting purposes. Apple is spreading the realization of the revenue for the sale of the phone to the customer over a 2 year period. The reason for this is Sarbanes-Oxley.

        Due to Sarbanes-Oxley, Apple cannot provide firmware updates to the phone that add features after they realize the full cost of the phone. To avoid a situation like with the 802.11n issue where they had to charge $1 for the update, they spread the revenue over 2 years and can then do firmware updates without running afoul of the law.

        The actual price of the phone has nothing to do with this issue and the revenue from the unlocked phones would still have to be realized over 2 years to avoid legal issues with updates.

        (basically, Sarbanes-Oxley says you cannot realize revenue for a sale until you have given the customer the entire product. I believe this was in response to Enron's practise of selling its own subsidiary oil, recording a profit from the sale, and never actually shipping the oil. Since they owned the subsidiary, it never complained, and they could turn around and sell the same oil again to someone else.)

        My impression was that AT&T was actually paying Apple a share of the monthly service charges.

        That is correct. This revenue is not part of the sale of the hardware, though, so it doesn't count with respect to Sarbanes-Oxley requirements.
        • by Mr2001 (90979)

          basically, Sarbanes-Oxley says you cannot realize revenue for a sale until you have given the customer the entire product.

          Sounds like someone needs to correct that law's definition of "the entire product", then.

          When I buy a phone, the product is simply what's in the box: a handset, charger, manual, and whatever software it comes with. If they release a firmware update six months later, I can't reasonably turn around and say "A-ha! Clearly this is the entire product, and you screwed me over by not giving me this software six months ago!" ... and then do the same thing in another six months when the second update comes out. Log

          • by Descartes (124922)
            Well, I don't know much about SOX. I've been lucky enough to work for privately held companies for the last few years.

            That said, I think you're right in your definition of "entire product". Considering that other hardware manufacturers aren't held to this standard regarding firmware updates, I doubt that the fancy bookkeeping is actually because of SOX.

            The other theory I had when they announced the revenue model was that they were counting OTA iTunes purchases as part of the iPhone revenue. I wonder if a
          • by Darth (29071)
            If I recall correctly, with the 802.11n addition, the reason it was an issue was because it was enabling hardware that was shipped as part of the product but wasn't initially activated. So the issue was that the entire product wouldn't be considered to be shipped while that piece of hardware was disabled.

            I don't know if there's anything similar with the iphone, but they are probably interpreting the requirement conservatively on the theory that it is better to err on the side of caution than to end up being
        • Re: (Score:3, Interesting)

          by hughk (248126)
          Not quite true, SarbOx may constrain write-down, but it does not prevent the addition of new features. Apple sees a revenue stream from the air-time reseller - this is the key item. If it doesn't, it needs to realise those costs up front. As far as ongoing firmware updates, these are generally a combination of ongoing support (needed for the lifetime of the warranty or contract) and new functionality. There is nothing to stop Apple from separating the firmware fixes from those that add functionality, but th
        • Errr.. a slight change. Enron persuaded the Feds to allow it to book 20 years of constant revenue in ONE year. Thus if Enron is supposed to get $100,000 per year for 20 years, then Enron was free to book $100,000 x 20 = $2000,000 as as Single year's income.
          This facility was allowed to banks for mortgages, etc., and Enron managed to persuade the Fed to do it for Enron too.
          Sarbanes Oxley neither prevents nor allows it.
          The Feds prohibited energy trading companies to do it.
           
        • Due to Sarbanes-Oxley, Apple cannot provide firmware updates to the phone that add features after they realize the full cost of the phone. To avoid a situation like with the 802.11n issue where they had to charge $1 for the update, they spread the revenue over 2 years and can then do firmware updates without running afoul of the law.

          ...

          (basically, Sarbanes-Oxley says you cannot realize revenue for a sale until you have given the customer the entire product. I believe this was in response to Enron's practise of selling its own subsidiary oil, recording a profit from the sale, and never actually shipping the oil. Since they owned the subsidiary, it never complained, and they could turn around and sell the same oil again to someone else.)

          Does anybody else think that Sarbanes-Oxley is barking up the wrong tree? Enron moved money without moving product. So regulators react by forbidding to move product without moving money. Hello, anybody home?

          Shouldn't they rather regulate the way how companies interact with their own subsidiaries, rather than forbidding to give out "freebies" in general?

          You know, there are other kinds of owner/subsidiary abuse that don't involve fake sales. Such as for instance putting employees that are meant to be

          • by mgblst (80109)
            Yes, they should just have the don't do anything wrong rule. If you do something wrong, you get fined a variable amount, depending on the indiscretion. I don't know why this is so hard for people to get to grips with? They could extend this world to all law, not just business law. Seems simpe to me?

            Stopping things like Enron is hard, what don't you understand about this? They haven't just made all these procedures for a joke, it is to make more accountability, and for problems to be seen earlier, rather tha
            • by dal20402 (895630) *

              Yes, they should just have the don't do anything wrong rule. If you do something wrong, you get fined a variable amount, depending on the indiscretion. I don't know why this is so hard for people to get to grips with? They could extend this world to all law, not just business law. Seems simpe to me?

              Thanks for the best laugh of my week. Sorry I have no mod points to mod you up.

              It really is pretty pathetic watching geeks who know nothing about law or business trying to debate Sarbanes-Oxley with no information.

    • by Xordan (943619)
      Price of the phone + price of the most expensive contract for the expected lifetime of the phone (for 'potential loss') :) If they ever needed to justify it, which they didn't and don't.
    • Re: (Score:3, Funny)

      by the_humeister (922869)

      I had thought selling a phone for $500 is insane, I might have yet to see everything...

      Have you seen a dwarf do a fat chick? No? So indeed you haven't seen everything...
    • by Asic Eng (193332)
      Is that the true cost for an unlocked iPhone?

      That's the price you offer an iPhone for, if you don't really want to sell unlocked iPhones, but are compelled to due to some court ruling... It was the true cost in the sense that: truly - this is what you needed to pay.

  • What this (and the requirement by French law) proves is that there is an official means of unlocking the iPhone. I don't think anybody really doubted this, but there's the proof. I wonder how long it will take those smart hackers out there to figure out what changes when an iPhone is legitimately unlocked, and duplicate the result.
    • Re: (Score:3, Interesting)

      by jonwil (467024)
      The official unlock involves a piece of data that is stored on the phone and likely also stored on a server at apple. When you unlock it, iTunes reads stuff from the iPhone, sends it to apples server which looks it up in the database. If the phone is marked "ok to unlock", apples server sends back further data (which is unique to the phone) and iTunes sends it to the iPhone to unlock it.

      So short of some kind of hack attack or raid on apples data center (both of which are 100% illegal and will probably get y
  • by Brett Buck (811747) on Wednesday December 05, 2007 @01:57AM (#21582039)
    Holy scheize, 999! There's nobody in the world I want to talk to that badly.

          Brett
    • Holy scheize, 999! There's nobody in the world I want to talk to that badly.
      That's not the price, that's the number of preprogrammed German girls' phone numbers.
    • by Fred_A (10934)

      Holy scheize, 999! There's nobody in the world I want to talk to that badly.
      Apparently it's sold for 750 €s in France and should be 100 €s cheaper in six months. 999 €s is outrageous. Presumably the French ones can be used elsewhere.

  • Orange promises [pcworld.com] to sell unlocked iPhones in France, as per black letter law. Unlocked Orange iPhones come with all sorts of restrictions - provided that you remain on their network. In other words, they want the power users to go chew up somebody else's bandwidth.

    I wonder, though. How unlocked is unlocked? Will I be able to use this in the US? (I'm glad I kept all my surplus Euros from my trip to Germany in '05. Yay for currency speculation! Thanks, Bernanke, and thanks Ali Greenspan for setting this
  • What's wrong!? (Score:2, Insightful)

    by GodOfCode (878337)
    I think one cannot really stop Apple(or any other company for that matter) from producing a phone, tying up with a cellular operator and selling it to consumers subject to a specific set of conditions. If the consumers don't like it, they are free not to buy it. I am sure most people can survive without iPhones. :-)

    If most of the customers don't buy it (and they can choose not too, since markets are, for the most part, democratic), the product will be forced to disappear or change according to the needs

    • Permanently locking a handset to a single provider is anti-competitive. Suppose I sign up on a contract with and get a handset from Provider A, but half way through my contract, I realise that Provider B has a far better deal for me. Now if the handset is able to be unlocked, I can pay out my contract with Provider A and switch to Provider B without having to pay for a new handset. However, if the handset can't be unlocked, there is a significant disincentive to switching providers: not only would I have

  • I mean, it's not like Germany isn't devoid of really good phones already. Hell, I can't imagine them waiting much longer than the Finns for a new Nokia, or the Swedes waiting for a new Sony-Ericsson. What does the US have? That's right, Motorola. And I believe that's why the iPhone is so huge in the 'States.
    • I know you're mostly joking but Finns don't actually get Nokias faster than others, except in some cases when Nokia wants to test a model on a small market first, etc. Sometimes Finland is actually behind other markets (take N82 for a recent example). The same probably applies to Swedes and Sony Ericsson.
    • by Asic Eng (193332)
      They are running a huge ad campaign in Germany, currently. So I'd say they'll be successful in convincing people that it's a status symbol, and there are certainly enough people in Germany who can afford (and want) to buy status symbols.
  • in this case is T-Mobile GmbH the German company and not the British Company. Like most Network it is a multi-national corporation. I know this because they are my network and cost only 18 euros per month. From the television coverage of the iphone launch in Germany there were neither massed hordes waiting outside the shops nor people with an excess of brain cells buying the phones. Most looked as if they were unable to rationally distinguish between an overpriced phone and a poke in the eye with a sharp st
  • This really isn't that much of a blow from a practical standpoint. Anyone in Germany who wants an unlocked iPhone can just nip over to France and grab one for a FAR more reasonable rate than EU999.

    It's more of a problem from an ethical / political standpoint.
  • by BlueParrot (965239) on Wednesday December 05, 2007 @08:37AM (#21583769)
    "Cellphone contract changed its terms" - Go elsewhere
    "But my cellphone is locked" - Buy another phone
    "But my music doesn't play on other phones" - Buy music somewhere else
    "But my internet connection throttles other music stores' bandwidth" - Get another internet connection
    "But all the ISPs do it" - Start your own

    See the problem now? ONE of these restrictions is not a problem because you can "take your business elsewhere" , but when you have this bullshit EVERYWHERE then there's nothing you can do. Now before people start mentioning we have unlocked phones. Yes, we have them TODAY , and laws against this bullshit is sensible to ensure we have them in the future. Now if you think the magical "free market" will save the day then you are mistaken on two counts:

    a) That we have a free market.
    b) That if we had a free market, it would remain free without anybody stopping companies from doing bullshit like this.
    • by iceperson (582205)
      You seemed to be confused about what exactly a free market does.

      Here's a quick lesson
      step 1. Find a product people want (say, unlocked cell phones or a better service provider.)
      step 2. Create the product and market it to those people.
      step 3. profit

      A free market protects the consumer indirectly by allowing/supporting competition.
      • by jsebrech (525647)
        A free market protects the consumer indirectly by allowing/supporting competition.

        Exactly. The problem is formed by barriers to entry as a new competitor. Take the cell phone market. If you want to become a cell service provider, you need to provide nationwide (or at least state-wide) coverage. This means either leasing room on an existing network, or building or buying an entire network, which is too costly to imagine. Since the cost to entry in the market is so incredibly high, the existing players can in

If A = B and B = C, then A = C, except where void or prohibited by law. -- Roy Santoro

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