Time for Apple to end the iPhone locking farce

Stan Beer
Tuesday, 16 October 2007 06:49

Business IT - Technology

Having just returned from a family trip to Thailand, with the obligatory visit to Bangkok's famed shopping malls, I was fascinated by the abundance of new and used iPhones which could be purchased over the counters of numerous electronics retail stalls. These illicitly imported iPhones could be had totally unlocked with your own existing SIM card installed. Trade was brisk and a clear signal to Apple to end the iPhone software locking farce.

Given that an 8GB iPhone in Thailand costs about US$680, the surprising zeal with which they appeared to be snapped up by eager buyers from all parts of the world shows that demand is high. In fact, demand is so high that consumers were prepared to pay a hefty premium to have an unlocked version of Apple's new flagship handheld device despite warranty implications and the prospect of their phones being locked by Apple software updates.

As far as the warranty is concerned, my guess is that many consumers are prepared to take their chances to get an unlocked version. If the iPhone is as reliable as the average cellphone it will easily outlast the warranty period. Software locking, however, is a different matter.

As we have seen, both hackers and Apple software engineers have been hard at work engaging in a farcical cycle of successively freeing and re-locking the iPhone. In the latest iteration Apple issued firmware update 1.1.1 along with an ominious warning that using unlocking software together with the update 1.1.1 could render än iPhone "permanently inoperable" by causing "irreparable damage to the iPhone’s software".

It took a little more than two weeks for hackers to come up with a fix so that unlocked iPhone users could take advantage of the benefits provided by update 1.1.1 but that's not the point.

Apple's attempt to scare consumers away from using their iPhone with whichever carrier they choose is both disingenuous and insulting to its loyal customers. No hardware can be rendered parmanently inoperable by software unless it happens to contain instructions that enables or forces the hardware to physically damage itself. If an iPhone's software becomes corrupted, Apple could always re-install it.

The real issue for Apple and consumers is the iPhone business model. The company has determined that best way to gain market share in an excruciatingly tough market dominated by gigantic competitors is to enlist the help of selected exclusive carriers. As part of the deal these Apple and the carriers have an agreement to keep iPhones locked and bundled with phone plans.

The problem for Apple is that in a telecommunications market that is supposed to thrive on open competition even loyal Apple fans dislike their choice of provider being taken away from them. They want the freedom to use the carrier that best suits their needs. That's why consumers are prepared to pay more for their beloved iPhones in Thailand and to buy unauthorised unlocking software.

I suspect that in two or three years when exclusive carrier agreements have run their course and iPhones have carved a significant market share in the cellphone and smartphone space, freedom to choose carriers will become a non-issue. Until then, unlocking software will remain a sought after commodity for iPhone owners - unless Apple ends the farce and stops trying to do battle against its own customers.