Are unlockers pippin Apple?

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You’ve got to hand it to Apple. It’s been almost six months since the iPhone started shipping in the UK and it has the sales channel pretty well sewn up. At least it does in terms of comments to the press.

Back in January, top Apple ‘salesperson’ Steve Jobs told a Macworld Expo audience that around four million handsets had been sold worldwide since its US launch in late June, and that the company was on target for 10 million by the end of the year.

Its results last week reported an additional 1.7 million sales, and Apple restated its 10 million target.

At the time of Jobs’ address to the Macworld Expo, AT&T – Apple’s partner in the US – expressed its astonishment, noting it had only registered two million on its network.

Industry estimates at the time suggested an absolute maximum of a million of the handsets had been registered in Europe, including the UK.

Where did all the iPhones go?

More have been registered on networks in many different territories since January, but more still are missing in action.

So where were the remaining millions? Experts say most of them are in China and Russia, with more, of course, unlocked and circulating in their original markets.

The iPhone is a unique product as far as handset retail goes in the UK – it is sold via Apple, O2 and Carphone Warehouse stores exclusively, and is meant to work on the O2 network only.

As in other markets, the UK connection process for the iPhone is strange too; it requires customers to purchase the handset in store, then take it home to register via iTunes.

Or, of course, they can unlock the handset for £20-£30 and slap a network SIM card of their choice inside.

The downside is they won’t get the benefit of free Wi-Fi roaming on The Cloud’s national network, and their warranty may be affected. But hundreds, possibly thousands, go down this route every week, if anecdotal reports are to be believed.

The reason for this strange sign-up procedure, it would appear, is Apple has a revenue-share deal with its carriers – AT&T in the US, O2 in the UK, T-Mobile in Germany and Orange in France – and likes to keep its own tabs on sales and revenues due.

For its part, Apple UK seems to have sussed what is going on within the UK unlocking community. Since January, it has banned cash or cheque sales of iPhones in its stores, and customers paying by debit/credit card are limited to buying five handsets, presumably to stop bulk unlocking and shipment overseas.

Customers can still buy a gift card for cash, however, and then buy an iPhone using a false name and address.

O2 maintains it has never allowed cash purchases for iPhones, although shops visited by Mobile News in the Midlands said cash payments were okay.

O2 allows a maximum of two units per transaction, but keeps no record of purchases, so box breakers can make repeat transactions on the same cards.

A Carphone Warehouse spokesman says, surprisingly, Carphone still allows cash purchases, again borne out by staff in a Carphone store in the Midlands. Since the £100 price reduction on the 8GB iPhone, Carphone has reduced the maximum purchase per transaction from two to one unit. Unlike O2, it does keep a record, so box breakers cannot run multiple transactions on the same cards in different outlets.

However, its apparent cash facility on iPhone purchases makes it a moot point, presumably, even if anecdotal evidence suggests managers are wary of such practices.

Full story in Mobile News – Issue 413

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