Filed under: Analysis / Opinion, Steve Jobs, Apple, iPhone
Is Apple down with an iPhone unlock?
CNET's Don Reisinger has a great article up about what may have been Steve's Master Plan: letting an iPhone unlock happen.Pretty ingenious if it's true. Basically, Reisinger maintains two things: that Apple is a hardware company, and that AT&T was just a means to an end for them. If hackers are able to unlock the iPhone, Apple will lose a little bit (because they do get a small cut of service plans), but they'll still sell iPhones, and AT&T will lose everything. Jobs "did his part"-- he closed off the iPhone and declared an exclusivity deal. But now that we're on the verge of completely unlocked iPhones, Apple has no real incentive to cut it out.
And that's exactly how it's played out-- Apple's recent iPhone update did pretty much nothing to close off the system, and as Reisinger says, it wasn't Apple knocking on the doors of those who are about to unlock the iPhone-- it was AT&T. The iPhone's unlocking will bring a rush of sales for Apple-- and a rush of sobbing from AT&T headquarters.
It's hard to believe Jobs planned it all out, and we'll likely never know for sure anyway. But considering that we might be days away from an iPhone unlock, you have to wonder if Apple not only knew it would happen, but kind of wanted it to.
[ via MacBytes ]
Update: Our own Erica Sadun pinged me right before this post went to press to remind me that we're really, really close to the 90-day unlock period for most iPhone owners. In the past, AT&T has provided an unlock code for any phone upon request, as long as the customer has stuck with them for 90 days. I'm not sure if that policy is applicable with the iPhone, but that may be another factor in just how much AT&T has to lose with an iPhone unlock.
![TUAW [Cafepress]](http://www.blogsmithmedia.com/www.tuaw.com/media/tuaw-cafepress-promo.png)
Reader Comments (Page 1 of 2)
mentalsticks said 6:35PM on 8-30-2007
If this were Apple's plan all along and I were AT&T, I'd sue Steve's socks off.
Reply
jordan Merrick said 6:40PM on 8-30-2007
Hmm... the iPhone has a few carrier specific features (such as visual voicemail) that would become redundant on other networks though...
Reply
Alexis said 7:09PM on 8-30-2007
Is the code you mention AT&T usually gives customers to unlock their phone after 90 days the PUK code? Because I can already get the PUK code for my iPhone and "How to Unblock your SIM Card" instructions from AT&T just by logging into my AT&T account.
The only problem I see is that I haven't found a way to have the iPhone ask for the PUK code.
Reply
aj_robins said 7:38PM on 8-30-2007
Of course Apple would love to have unlocked phones, for all of the mentioned reasons.
However, I wish I could see the contract between Apple and AT&T. AT&T would be crazy to not have included some kind of clause where Apple would have to lock the iPhone (and keep it locked, within legal and regulatory bounds, of couse).
And that's why I think we're unlikely to see an iChat application for the iPhone: AT&T's contract probably prohibits it. I'd love to be wrong, but my guess is that the contract prohibits Apple from producing an iChat-like application, to protect AT&T's text-messaging income. (Either that, or iChat-on-iPhone would work by sending sms messages.)
Reply
rp said 7:42PM on 8-30-2007
I wouldn't be surprised, and I've been saying it all along. Apple is a hardware company. They could care less about the chump change AT&T gives them. It's basically like iTMS: Apple makes basically nothing from the sales of songs, while they make ridiculous bank on iPods. It's almost assured that Apple has kept up their end of the bargain, but it would be downright stupid for Apple to tell AT&T that they would keep this phone locked down tight. Personally, I think AT&T is extremely lucky to be in on the deal at all. Finally, it would really drain Apple's resources and make people wonder about Apple's business practices if they had to constantly fix things that people broke (or made to work better). And remember, Steve and the Woz were once us: a Jolt in one hand and the jolly roger flying high in the other (or over a building... whatever, don't get all technical on me).
Reply
Sam said 7:45PM on 8-30-2007
The PUK, or Personal Unblocking Key, is used to unblock a SIM card which has been locked by entering its PIN incorrectly three times. Nothing to do with the network/carrier lock.
Basically, with SIM cards the user can set a PIN that must be entered when the phone starts up, before a network connection can be made with that SIM, as a deterrent to stealing the SIM itself. The SIM won't ask the handset to ask the user to provide a PUK code unless it's been PIN blocked, so you won't usually see anything relating to it.
Sam
Reply
CalBear said 7:48PM on 8-30-2007
Obviously an unlock is not a bad thing for Apple, but why is everyone assuming that it is a bad thing for AT&T?
Look, the only way to buy an iPhone is to sign a contract with AT&T (with the one exception below). So for any unlocked iPhones that are going to be sold, someone has to have either 1) signed a 2 year contract with AT&T and be using it with a different phone, or 2) paid a contract cancellation fee. Obviously this person will probably pass along the cost to the final buyer who wants the unlocked iPhone. What people fail to understand is that this is not such a bad thing for AT&T. In scenario 1) they still get a new subscriber and in scenario 2) they get 'free' revenue without any strain on their network. And if 2) turns out to be insufficient revenue all AT&T has to do is jack up the cancellation fee to whatever they want. It's a win-win.
Regarding the scenario where one can purchase an iPhone without a contract (I heard some reports where a bad credit allows you to do that), I highly doubt this whole will be difficult to plug for AT&T.
So why does everyone think AT&T is doomed?
Reply
Stephen Lang said 7:53PM on 8-30-2007
But you don't have to sign a contract at the time of purchase, do you? I thought you could order a phone from Apple.com for $499 or $599, then activate through AT&T AFTER you get it and plug it in to your computer.
I'm sure the are specific guidelines on Apple's and AT&T's responsibilities regarding preventing unlocking, or if/when AT&T would unlock phones, etc. And both companies will follow the contract to the letter. There will be no lawsuits.
Reply
Mark Scrimshire said 7:54PM on 8-30-2007
#2 @Jordan - I have had AT&T mess up my voice mail. When it was reset I ended up with standard voice mail instead of visual voicemail. All that happens is that when you press the voice mail icon in the phone section it makes the call to the voice mail system.
So while visual voicemail is nice. Normal voicemail integrates with the iPhone quite nicely.
Reply
WyldKard said 8:00PM on 8-30-2007
I beat Don Reisinger to the punch with this conspiracy theory over a month ago: http://mendax.org/?p=556
To me, the fact that AT&T is making with the legal threats and not Apple is telling. We don't know the details of Apple's contract with AT&T, but why should we assume that AT&T properly covered their butts, and assume that Apple didn't have its own best interests in mind? Perhaps one of the reasons Apple went with AT&T in the first place is that AT&T's contract proposal wasn't as lock-intensive as that of T-Mobile's, which may have required Apple to invest additional resources to /keep/ the iPhone locked via firmware updates.
Since we're days away from supposed software unlocks hitting the Net, we'll see soon enough whether Apple releases another iPhone update to prevent the existing hacks, if it's even possible.
Reply
gj said 8:25PM on 8-30-2007
I was a part of the original unlocking effort and I can categorically tell you that if this was a part of "Apple's secret master plan", nobody from Apple revealed it to us. We couldn't get so much as a hint out of them though they did acknowledge themselves. We pressed at length and asked significantly probing questions based on our discoveries, but if it was really a part of their master plan, I find it distinctly more likely they would have given us more in the way of hints than they did since it was clear we were bashing our heads against walls.
Reply
scott said 8:37PM on 8-30-2007
"small cut of the service plans" -- do you have any idea what that could add up to? let's say they get 10% and the average bill is $80 per month. that's $8 per month per user. multiply that by 10 million users by the end of 2008 and that's $80 million per month. when they hit 10 x that number of users (which could happen in the next seven years or so), that would be $800 million per month. yes, apple is flush with cash, but do you really think they'd be happier without $9.6 BILLION of yearly PROFIT when that happens? given that their yearly profit is running at around $5 billion today, i would say that the answer to that is "no."
Reply
windrider said 8:46PM on 8-30-2007
Apple never releases the details of anything it does until after it's released. With the new ipod all store managers (best buy etc.)had to sign a confidentiality agreement to keep it an absolute secret until after Jobs made the official speech at 10 am then the stores could begin selling them at 10:15. as opposed to the company I work for which talks up products months before there ready. I'm sure he secretly hoped it would be hacked but for business and legal reasons will never publicly say so.
Reply
Sean said 8:51PM on 8-30-2007
yeah... that's the ticket...
Reply
St3phen said 10:00PM on 8-30-2007
AT&T's support page says
"iPhone cannot be unlocked, even if you are out of contract. If you are traveling internationally, iPhone is a quad-band phone and will work in many countries across the globe. Stay connected while traveling to over 190 countries, plus get discounted rates in over 80 of those countries when you sign up for AT&T World Traveler"
https://www.wireless.att.com/support/knowledgeBase.do?content=KB82027.html
Reply
lucas said 10:08PM on 8-30-2007
I've been an AT&T customer for 3+ years w/ a run of the mill Nokia phone and when I called in to request it be unlocked for a trip overseas recently I was told it was not available until the contract expired. So I'm not sure that the 90 day thing is exactly a company policy, or just something someone who managed to get a sympathetic company rep was able to get.
Reply
Erica Sadun said 10:12PM on 8-30-2007
re PUK code: No, I was referring to subsidy unlocks, particularly for international travel
Reply
Reg Muffet said 10:43PM on 8-30-2007
@WyldKard > " the fact that AT&T is making with the legal threats and not Apple is telling"
Actually it's not at all clear if any legal threats have been made. That story, which has propagated through the media, started with UniquePhones claiming to have received a 2:54 am call threatening legal action if they proceeded. On the basis of that, they canceled their imminent release plans and postponed indefinitely.
Now, there are a few interesting issues surrounding UniquePhones:
1. They have claimed to know how to unlock the iPhone since June 30, just needing a bit more time to polish it up.
2. They have been harvesting email addresses through their web site ever since.
3. They announced an "release within 24 hours" very soon after a different company, iPhoneSIMfree.com, made a verified demonstration to Engadget's Ryan Block, in effect riding on the coattails of their publicity.
4. They promptly canceled this release claiming a threatening legal phonecall at "approximately 2:54 am" made them postpone their release indefinitely.
5. No one has seen any evidence of UniquePhones' claim, just expected to accept at face value the statements made through http://blog.iphoneunlocking.com/ (judge for yourself).
6. In an attempt to disuage doubt, an extremely poor quality and inconsistent video showing a pre-modified iPhone being taken from a new box and subjected to an indistinguishable unlocking process was posted.
7. The majority of the hacker community has continually maintained UniquePhones and their associated web sites (iphoneunlocking.com etc) are full of BS and being used to harvest email address.
8. It is likely that they are intending to either on-sell or reverse engineer a genuine software unlock when it appears, then claim they had it all along.
In short, anyone who takes their word that legal threats were made is not considering the fact that they are an extremely unreliable source.
Reply
Carlos Ariza said 11:25PM on 8-30-2007
All Apple had to work off of was ATTs locking guidelines - I'm sure that if the phone becomes unlocked it has more to do with ATTs network and SIM card technology than it does with Apple not doing a good enough job of locking it up.
This is ATTs problem not Apple, they are just the phone provider and I am surprised they have even gone this far to comply with ATT.
Reply
bibi-pov said 1:45AM on 8-31-2007
While I find it interesting to have the iPhone unlocked, I see nobody talk about what it really means. I mean, currently the iPhone is only available in the US, where frankly getting rid of AT&T is all nice and well but given the iPhone is GSM only (no complain, just a fact reminder) means that the only choice besides AT&T is T-Mobile. For anyone who has ever tried to use T-Mobile data's functionality, there's no comparison possible: T-Mobile plain and simply sucks! My tests showed that their EDGE network is slower than AT&T's GPRS; that was in NYC: YMMV. Not to mention that to the best of my knowledge T-Mobile doesn't offer unlimited data, quite the opposite in fact: even their WAP option is restricted. So who's left as potential beneficiaries of this unlock? Foreigners? They can't buy the phone. remember...
Reply