Who would think that unlocked iphones would be such an issue to Apple? Don’t other companies deal with unlocked phones and get over it?


When 1 million are “missing in action” according to  the Reuters.com article “Quarter of Apple iPhones “unlocked”: Analyst” anyone would take notice. Being an iPhone user (one of the best company policies we’ve enforced so far) I’m pretty glad that I have a “virgin” phone.


The reason I’m so glad for having a virgin phone is that Apple is going to have to make some interesting decisions concerning the future of the iphone. Those decisions I feel will make it harder to have the iphone on any other network unless Apple says so. Here is the conversation that pSw (fellow blogger and LightCube Solution Associate) and I were having on the issue. I’ve decided to take it to the blog so that others can chime in.


Conversation to date:


pSw: Should Apple [if they could] block all those phones that are missing? 


Let’s loosely define “block” as jailing the phone so badly that the iphone elite team, Installer.app team, geohot and others would have no other recourse but to raise the white flag. (I personally think someone will always have the ability to jailbreak the phone but thats another blog entirely)


fhagard: It’s amazing that they could sell so many phones yet suffer financially because of it.


pSw: The loss will only be for AT&T if that were to happen. 


fhagard: Apple would also lose on the deal because they make their money on the AT&T activation of the phone and not the phone sale alone. As stated in the article: 


“If Apple cracks down on unlocked phones it could preserve its high margins but miss its sales target, whereas allowing them could erode profitability and make it tough to sign more carriers to similar revenue-sharing deals.”


pSw: Sign other carriers! Unlock the phones, or make a version for each carrier…that strategy cuts into profit margins on the phones themselves. But the returns are better in the long-term.


fhagard: Apple is all about the immediate returns for the hardware traditionally. If they focus on long-term returns they will never please their investors because they are coming out with something bigger in the next Macworld.


pSw: The problem with that is they already make a tidy profit from all their other hardware sales. If Apple were more like, say, Research-In-Motion, then that focus would make more sense. RIM makes the functionality possible; Qualcomm makes the phones. Their joint venture remains profitable only by making multiple versions of the same phone(s) for different carriers. Who’s to say that Apple can’t adapt to this and become bigger than Motorola, Samsung, and LG combined?


In response to pSw’s last comment I feel that Apple wont adapt to become bigger than Motorola and the rest. Why should they focus on making several different phones for different users/wireless companies when they can make THE best phone? They have always defined their game by being separate from the pack. They keep it simple and separate making the statement, ‘we play well in the sandbox when we own the sand’.


So in the long run I’m very glad for my AT&T branded iphone playing in the sandbox the way Apple wants. More power to the dev teams who are able to unlock the phone, but I think the battle is on.


Thoughts Anyone?