Date: Wednesday, January 30, 2008

Up to One in Four US iPhones Unlocked

Recent studies show that at least 25% of US iPhones have been unlocked to work on other networks. Since its highly anticipated launch last summer, the iPhone has only been available on one network in each country. In America, this network is AT&T, while in the UK, 02 have exclusive rights for the iPhone.

One study, which was conducted by Bernstein Research, indicated that around 27% of the iPhones sold last year were adapted to work on other networks. Another similar study conducted by Piper Jaffray & Co. confirms this view, as it estimated that around 850,000 iPhones - around 25 per cent of all US iPhones - were unlocked last year. While Apple has recently admitted that a “significant” number of iPhones have been unlocked in the US, Apple or AT&T have yet to comment on the findings of these particular studies.

Apple currently receives a percentage of every iPhone user’s monthly tariff from their network provider. Because of this, the amount of unlocked iPhones in the US is costing them, as well as AT&T, a considerable amount of lost revenue. In fact, Bernstein Research analyst Toni Sacconaghi estimates that every single unlocked iPhone will generate around 50 per cent less revenue and around 75 per cent less overall profit than a locked phone that is running on the correct network. Ultimately, this means that if Apple manages to sell a massive 10 million iPhones in America this year, around 30 per cent of this number will be unlocked and used on other phone networks, which could cost Apple as much as $500 million in lost revenue.

If the mass unlocking of iPhones continues, Apple may have to reconsider their current network exclusivity. After all, as Sacconaghi said, the current situation is causing a "significant strategic dilemma for Apple." 

Source:

BBC

Times