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The iPhone black market

Posted February 19, 2008 6:00 AM by Cedric Bosch
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1.3 million iPhones have had a very strange journey indeed. They are manufactured in China, shipped uniquely to the United States and Europe… and then smuggled right back to where they came from- China. Once back there, the phones are jailbroken and re-sold at higher prices to eager Chinese customers.

Apple must be kicking itself for not seeing this coming. They could have easily launched an unlocked iPhone at the same time that they were releasing the locked AT&T version for about double the price. They didn’t, though, and now they are stuck in an agreement with AT&T that prevents them from cashing in on this massive foreign market. AT&T doesn’t win either- since an unlocked iPhone is not available on retail shelves, people are doing it themselves and preventing AT&T from getting their share of the iPhone’s sale price (and obviously, the subsequent monthly fee). Selling an unlocked iPhone would work for everyone, so why not just do it? Hopefully Apple will get it right next time. What do you think?

Via: The New York Times

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Comments

  1. I can’t help but think Apple knew this would happen, and, in fact, doesn’t really care. Yes they get 10 bucks per month from ATT for every active subscriber, but still, a hardware sale is a hardware sale. In the longterm, if people want to use the iPhone this badly its got to be good for the brand.

    Posted by Dale on February 19, 2008 8:47 AM

  2. >> “Apple must be kicking itself for not seeing this coming. They could have easily launched an unlocked iPhone at the same time that they were releasing the locked AT&T version for about double the price.”

    I think Apple saw this coming, and they chose not to launch an unlocked version in part to ensure their Visual Voicemail feature would see the light of day.

    Visual Voicemail is a feature that can require significant changes in the back-end of a carrier’s network, and promising exclusivity (and therefore a sure increase in subscribers)is probably a good carrot to convince the carriers to spend the necessary cash upfront.

    I hope that contracts will one day become a thing of the past and I also would like to see the iPhone available to any carrier, but I think Visual Voicemail is a big part of why this cannot happen yet.

    I blogged about this here:
    http://lepetitradiateur.blogspot.com/2008/02/about-apples-locked-strategy-for-iphone.html

    Also, Apple’s exclusive agreement with AT&T is for the US only, so Apple is not prevented “from cashing in on this massive foreign market” at all. They are busy making agreements with other GSM carriers in other countries of the world. I’m sure implementing Visual Voicemail is one of the requirements for these agreements ; I just hope that the talks are not blocked solely because of a greedy cut on the subscriber’s revenues. That’s what Apple has become locked in due to their earlier contract with AT&T.

    Posted by Hugues de Saint Salvy on February 20, 2008 11:55 AM

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    Posted by kraloyun on May 24, 2008 10:57 AM

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