that AT&T registration and Apples iPhone sales numbers don’t add up. About 1.7 million iPhones out of 6 million sold are ‘missing’. These phones have been unlocked and are being used all over the world- most likely about half of them in China. We discussed the fact that the unlocked iPhones were a form of advertising for Apple and that Apple shouldn’t restrict the unlocking. On the other hand, AT&T was losing revenue from these unlocked phones since the users were using them on any other network they choose, presumably not AT&T’s.The high demand of the device has made unlocking a popular practice up until this month. This weekend, on July 11th, Apple will release iPhone 3G, the upgrade to the original product. Incorporating some useful features such as GPS and others, the new phone will work on the higher data-speed 3G networks. Along with this upgrade in speed will be a reduction in price- a new 8GB iPhone last July cost $600US. The same phone now will be priced at $200US and the 16GB version will be $300US. These numbers however may be deceiving, due to the cost jump in the 2-year AT&T service contract, which in the end make the new iPhones more expensive
than the original 2.5G iPhone.Needless to say, Apple will be making a profit from this release as the phone’s cost of manufacture has been most recently estimated at around $173US
. Changes in the contract agreement between Apple and AT&T end the user fee sharing practice of the original iPhone release. Now AT&T will subsidize the phone’s cost (estimated at around $525 per phone) with a bulk of that cost being paid back to AT&T over time through the 2-year agreement.In addition, the iPhone will be offered officially in over 70 countries by the end of this year at the same pricing scale as the US. These changes, along with the requirement of signing the service agreement before receiving the new iPhone, will certainly cut into the unlocking business.
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