Filed under: Analysis / Opinion, Retail, Apple Financial, Apple, iPhone
Analyst: 10% of iPhones sold to unlockers
Apple Insider has an analyst saying that 10% of iPhones sold in Apple stores in September were being bought by people who are then turning around and selling them unlocked. That seems like a big number when you picture the situation Gene Munster, the analyst, describes: "one Apple employee acknowledged that customers were buying five iPhones per store visit in order to turn around and resell them unlocked."But is it really that big? 90% of people buying iPhones are sticking with AT&T, so considering that Apple got the support of a network and a slice of the service plan profits, a number like 10% of unlocks actually seems to me like it validates Apple's choice to sell the phone locked. SDKs, jailbreaks, and customer rights (oh my) aside, if only 10% of iPhones out there are unlocked (and the number's probably much lower, as all the iPhones sold before September were probably not unlocked at all), Apple's original decision was justified, in my view.
But I'm not defending them for breaking things with 1.1.1. Apple hasn't released the numbers on September sales yet, but 10% of a lot is still a lot, in terms of bricked iPhones because of the unlock crackdown. I haven't heard any tales of folks who paid a lot for an unlocked iPhone and then got a brick with the 1.1.1 update, but I'm sure they're out there and unhappy.
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Reader Comments (Page 1 of 2)
David Schloss said 3:41PM on 10-04-2007
Of course, "analysts" were off on the number of iPhones sold by between 200,000-500,000 in first week analysis (depending on which analyst you listened to) so I'm not really going to put a lot of stock in that 10% figure.
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Whiplash said 3:54PM on 10-04-2007
I'm with David. These "Analysts" are wrong WAY more often than they are right.
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Fritz Laurel said 3:56PM on 10-04-2007
Your logic is flawed, Mike, unless you compare that 10% figure to other phones sold. You have no basis for saying 10% is a comparably large of small amount.
Cheers,
FL
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Fritz Laurel said 3:58PM on 10-04-2007
...OR small amout.
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Fritz Laurel said 3:59PM on 10-04-2007
Doh! I give up.
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Ryan said 4:03PM on 10-04-2007
That number does not seem to include phone that were bought and unlocked for personal use. Only ones that we unlocked and re-sold. So that number might be much Higher.
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Patrick said 4:51PM on 10-04-2007
I personally was stuck with T-Mobile and just renewed my contract back in July. When the iPhone unlock came out, I went and bought and iPhone and unlocked it. I got the idea to sell unlocked phones on eBay, and ended up selling about 15. I used part of the money I made to cancel my T-Mobile account and switch to AT&T with a legit, locked iPhone, and sold my used unlocked one (still at a profit!).
Done and done.
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DigitalFury said 4:18PM on 10-04-2007
Is it possible to stop with the Apple apologies already?
Anybody with the opportunity to try out an unlocked one with applications installed, can figure out in less than 30 seconds the tremendous advantages of unlocking it.
If you think that at $400 Apple is not already making a huge markup, then you're a fool and deserve to be gouged by Apple locked-in business model.
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Eideard said 5:43PM on 10-04-2007
Digital Fury, eh? Intercollegiate whiner, more likely.
Business models fail or succeed in the marketplace - not in the sandbox of fan vs anti-fan boys.
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Kevin said 4:47PM on 10-04-2007
I give up trying to get this piece of crap iPhone to work again. They bricked my iphone (no hacks or unlocks installed) and now they wont fix it for me.
I am going to buy the Cingular TILT tomorrow and screw Apple all together. The TILT blows the iPhone away anyways so not sure why people will stay with the iPhone especially the way Apple is trying to playing god right now. SCREW APPLE!!!
TILT SPECS:
- 3MP camera with autofocus
- GPS Antenna installed point to point driving
- able to expand to a 32gb SD card (Blows the 8gb iPhone)
- 3G data services
- WiFi
- Only $299 with no future price drop games like Apple
- Open to install any 3rd party apps you want and there are over thousands of them. Not like Apple trying to control your every move.
- Full external keyboard and not the crapy touch screen like the iPhone.
BYE BYE APPLE!!!!!
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Zack said 4:49PM on 10-04-2007
My phone is unlocked, and I'm pretty sure the woman in line in front of me who bought 11! (yes eleven) iPhones wasn't planning on using them all herself. So I'm not surprised at 10% (for September at least). Overall, it might be 5% if I had to guess. I do know there's a steady flow of grey-market iPhones making their way to Australia at least, before 1.1.1 hit.
And for the lack of people complaining about bricks, I'm sure most of the people capable of unlocking themselves are capable of keeping themselves on 1.0.2, enjoying their apps.
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ZinkDifferent said 4:51PM on 10-04-2007
Buh-Bye Kevin - enjoy our crapola mobile.
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Bruno said 5:00PM on 10-04-2007
10%? That number is probably too low.
One acquaintance who bought 5 saw someone in front of them buy 50. Yes, 50. That was the majority of the shipment to that Apple Store for that day. Upper State New York. The units were all destined for Canada.
There are retailers selling them in Canada (unlocked of course) for fairly large markups quite readily. Easy to find. The only thing to stop this will be new units shipping with 1.1.1 firmware.
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Christina Warren said 5:26PM on 10-04-2007
I would think that number might be low - just because once the software unlock was released, I imagine that every grey market/kiosk/ebay/whatever seller out there was going to raid the Apple stores to sell marked-up unlocked phones.
It was for that reason that when I sold cell phones at a large consumer electronics chain, we would limit the number of phones sold to a customer -- especially if it was a new phone (and that was often for people not planning on unlocking, just taking advantage of our cheap phone price if they could buy without contract and then eBay that shit or sell it on their own for a profit -- people would send their kids in to try to get more phones, which is just so twisted) -- I honestly can't believe Apple hasn't done that yet. I mean, for the Apple Store, their bottom line isn't going to be affected if they sell 50 phones to one person - although by doing that they totally miss out on add-on sales (accessories, Apple Care, etc. - the margin on that shit is HUGE and was an other reason we would limit customers to a set number of phones) - but if the numbers of iPhones sold and iPhones activated starts to deviate too much, I'm sure AT&T will have a substantial problem with that.
As far as the lack of Bricked phones reported? Two reasons: one - 1.1.1 is only a few days old - plenty of people haven't upgraded (whether they know the risks or not) and two - if you are talking about sales to Canada or other countries, you aren't going to hear that much about it because they aren't guaranteed service. The dealers will have a hot mess on their hands - but Apple, it's not their problem and they can pass the buck (and legitimately, I think - no matter how much I detest the whole "break the phone if you unlock it BS"). People knowingly bought something that either wasn't available in their country or for use with an unauthorized carrier - I would like to think that most people that do that would refrain from bitching once said phone stops working. I had a series 1.0 X-Box that I soldered, upgraded the hard drive and loaded Linux/tons of apps/emulators/etc. on it - then Microsoft dropped X-Box Live support for hacked X-Boxes. Did I call them and complain that I could no longer play online? No -- why? Because I hacked my X-Box. I ended up being lucky and having a model that could support a hardwired BIOS switch, but for my friends who had newer models that didn't support that, that was the cost of being able to play Aerobiz Supersonic on a huge TV.
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Aymeric said 5:43PM on 10-04-2007
well, everybody is going to hate me for saying this but I don't understand why employees at apple stores didn't upgrade the firmware of 1.02 iphones they still had in stock... I guess Steve J saw it coming and realized he was going to sell tons of them, making a huge profit,.. and then he is going to release an sdk for 3rd apps,.. and allow people to unlock their iphone... the guy is fooling you around....
ah ah ah ah ah ah ah
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Reg said 5:58PM on 10-04-2007
We should get a clearer picture when both companies - Apple and AT&T - report their Jul-Sep quarter results.
If they break out the number of units sold (Apple) versus the number of units activated (AT&T), then the difference will represent the unlockers.
Apple announced during September that it had reached the 1,000,000 mark. There was no corresponding announcement from AT&T, but the whisper was 600,000 activations.
That would suggest the 10% figure was on the low side.
Hopefully we'll know more in three weeks when the financials are out.
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Reg said 6:14PM on 10-04-2007
Personally, I think Apple knows that selling unlocked phones is A Good Thing.
Although they don't get revenue from the AT&T revenue sharing deal, when a phone is sold to someone in Croatia or New Zealand, it's a bonus sale they wouldn't otherwise have had.
There is unlikely to be a network partner in those countries for a very long time, if ever, so the sale brings extra revenue and increases the unit count (which in these still early days of iPhone promotion is a very useful bragging metric).
Plus, once it leaves the country, the new owner doesn't expect warranty or support, reducing Apple's support costs. Nor would many of them have been able to claim the $100 credit from the $599 price drop.
However, their contract with AT&T / O2 / Deutsche Telecom forces them to publicly pretend unlocking is an abhorrent thing to them.
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CMB said 6:29PM on 10-04-2007
Maybe Apple Did it To Keep AT&T Happy
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RL said 7:11PM on 10-04-2007
10% seems low. I read in some Asia newspapers that there are actually stores (typically small vendors) that have been selling unlocked iPhone to people (both hardware unlocked and software-unlocked versions, the former is cheaper), in places where iphone is not available. I am imagining that this must be happening all over the world. Not to mention, you don't HAVE TO stay with At&T for the whole two years - I have seen bloggers wrote about how to get out of the At&T contract to save money. Hence, 10% may just be a very conservative estimate.
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mark said 8:20PM on 10-04-2007
Your logic is flawed.
Just because the current ratio is (approx.) 90/10, doesn't mean that everyone in the 90% is happy with AT&T or wouldn't have gone with another carrier had there been an Apple-sanctioned option or an Apple-unlocked phone.
Personally, I hate AT&T and would love to use another carrier -- but not at the risk of damaging/bricking my phone. Plenty of people in the 90% would be with other carriers if they had a *safe* option to do so. But for many of us, it's simply not worth the headache and risk of constantly hacking the phone, then having to avoid iPhone updates for fear of what might happen to our devices.
Many of us are simply more willing to "play by the rules" until there's a safer option.
If (when?) Apple finally releases an unlocked iPhone, watch that 90% *tumble* to a significantly lower number.
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