Does Apple have the right to lock iPhone?

Stan Beer
Thursday, 05 July 2007 05:01

Business IT - Technology

News that hackers are out in force in an effort to "free" the iPhone hardware from the constraints on its use imposed by the activation process and the exclusivity of its carrier deal with AT&T are instructive. The biggest issue appears to be that despite paying US$600 iPhone owners will never actually own "the best iPod ever built."

As far as hackers such as the famed Jon "DVD Jon" Lech Johansen are concerned, paying big bucks up front for an expensive device that can't be used for anything unless you also activate an expensive phone carrier plan is not fair. So he has developed a hack that allows the iPhone to work as an iPod and a Wi-Fi device without activating the phone network.

While other hackers are working on hacks to enable the iPhone to be used with networks other than that of AT&T, it is DVD Jon's work that highlights a moral issue for both Apple and consumers. Arguably, Apple has a perfectly legitimate right to strike exclusive arrangements with nominated carriers for use of the iPhone as a phone. Not so clear, however, is whether Apple has the right to lock up the iPhone's non-phone capabilities. A strong case can be made to say that it does not.

Apple has made it very clear from the outset that if you want to buy an iPhone in addition to its hefty up front cost you must also subscribe to a two-year contract with AT&T. There was a very good reason for this. As iPod global marketing manager Greg Joswiak pointed out in an interview I attended at the iPhone launch in January, Apple could not have developed many of the mobile phone functions of iPhone without the help of AT&T.

Whether Apple wanted to or not, the company brought its new product to market requiring a $3000 commitment, including $500 or $600 upfront, from consumers. Without making that two-year commitment, you can't use the iPhone for anything. But hang on a minute! The iPhone is also an iPod and Wi-Fi device. It doesn't need to be a mobile phone to perform those functions does it? Absolutely not.

AT&T and Apple may argue that they need to force users on to two-year contracts because after all AT&T needs to reap the rewards of the development it contributed to iPhone. Fair enough. Even if we only want to use the iPhone because it's the best iPod ever built and it's great for watching movies on planes and surfing the net and retrieving emails in Wi-Fi hot spots (a pity it doesn't have IM and VoIP), AT&T wants its cut so we have to also pay to use it as a phone for two years. But hang on another minute! What happens after two years?

There dear readers lays the moral dilemma. As it stands, unless your iPhone is connected to the AT&T network you can't use it for anything. Therefore when your contract expires, even if you hate your AT&T mobile service, you will have to keep paying a monthly phone connection fee if you want to keep your iPod. Otherwise you will have spent around $3000 including your upfront cash for a paperweight. To put it simply, this is nothing short of outrageous.

Apple could argue that if you just want an iPod buy an iPod. However, the iPhone is the "best iPod ever" and it's also a Wi-Fi communicator and a PDA of sorts. It's also more expensive than the ordinary iPods. So why shouldn't consumers who have paid good money upfront and served their expensive two year sentences with AT&T be able to continue using the features of the iPhone that are worth keeping? Maybe the Better Business Bureau has an answer?