iPhone unlocking may be widespread

Stephen Withers
Tuesday, 23 October 2007 11:28

Your IT - Mobility

Apple's shipped about 1.4 million iPhones. What proportion of owners intended to unlock them? One percent? Ten percent?

Apple thinks the number is a lot more. According to chief operating officer Timothy Cook, "we don’t know precisely how many people are doing that [unlocking iPhones], our current guess is there is probably 250,000 of the 1.4 million that we sold where people had bought them with the intention of doing that. Many of those happened after the price cut."

250,000 in 1.4 million is 18 percent, or more than one in six. That's a lot of iPhones, assuming all those owners succeeded in unlocking their phones.

Can Apple tell whether iPhones have been unlocked? Not directly. But the company does receive a share in AT&T's service revenue related to the iPhone, and if people aren't using AT&T, Apple doesn't get its cut.

The cheapest plan is $59.99 per month, and according to various reports Apple gets somewhere between five and 15 percent - perhaps as much as 20 percent - of this.

Let's take 10 percent, which is $6 per month. If Cook's number is anything like accurate, Apple's already missing out on $US1.5 million a month, and that number will increase as more iPhones are sold. $US1.5 million is small beer for a company pulling in over $US2 billion a month (not to mention its $US15 billion in cash), but when we've ramped up to 10 million iPhones in use, that's pushing $130 million a year.

If Apple hasn't been trying too hard to prevent unlocking so far, sinking another $US10 million or so into the problem would seem to be a good investment - even if it is bad news for iPhone owners.