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iPhone 3G not quite as cheap if you want to unlock it

11 June 2008 2:34 by Rich "vurbal" Fiscus | 8 comments

After the official unveiling of Apple's new iPhone 3G on Monday, arguably the most interesting difference from the original was the $200 price reduction. What Steve Jobs didn't mention during his WWDC keynote address was exactly how they managed to bring costs down far enough to make the new price feasible. As it turns out the answer to that question may be bad news for those who intend to unlock the phone for use on networks where the carrier doesn't have a deal with Apple.

Perhaps even more than the technology itself, Apple's sales strategy for the original iPhone was revolutionary, if somewhat flawed. Rather than relying on service providers like AT&T to subsidize the price and provide them directly to consumers they chose to charge consumers full price. Although this allowed them to sell the phone directly at their own Apple Stores, it also made it easy to purchase it without signing up for service at the same time.

For anyone who wanted to use the phone outside the six networks officially sanctioned by Apple it made things easier. By simply buying the phone with no service they avoided the hassle (and early termination fees) typically associated with cancelling a contract.

In order to bring prices of the iPhone 3G down they've adopted a different plan. Rather than selling the phone directly they're counting on service providers to subsidize the price, which means buying from a company like AT&T rather than directly from Apple. As is standard with such deals, customers will be required to sign up for service with the purchase of the phone.

Of course you can simply sign the contract and then cancel it after the purchase. While this typically results in an early termination penalty, in most cases the final cost (including the initial purchase and penalty) will probably be close to what you would have paid if you could buy it directly from Apple. For example, given AT&T's $36 activation fee and $175 early termination penalty the total cost of a $199 iPhone after cancelling the contract comes to $410. That's just a little more than the $399 pricetag for a comparable (and unsubsidized) first generation iPhone.

With the iPhone 3G being launched in 22 countries initially and 48 more by the end of 2008, the good news is there should be less demand for unlocking. But if you happen to live in one of the countries where exclusive carrier deals will still be in force, including the United States, United Kingdom, France, Germany, Spain, and Ireland, getting an iPhone to use on another network will require some extra effort - not to mention a little extra cash.

Permalink to this article | Topics: Gadgets Phones

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AT&T subsidizing over $400 USD for each iPhone sale (21 June 2008)

Over 90 percent of Japanese don't want new iPhone, says study (18 June 2008)

3G iPhone to sell for 1 euro in Germany (16 June 2008)

New app turns iPhone into radio (15 June 2008)

German court throws out P2P lawsuit (15 June 2008)

Orange opens music download store (12 June 2008)

Telefonica signs iPhone distribution deal (11 June 2008)

Analyst suggests shipments of 18 million iPhones this year (11 June 2008)

O2 offers iPhone for free with select contracts (11 June 2008)

Apple drops revenue sharing for most new iPhone 3G carriers (10 June 2008)

Samsung introduces iPhone rival OMNIA (10 June 2008)

Steve Jobs unveils $199 iPhone 3G at WWDC (10 June 2008)

Slingbox ready for the iPhone and iPod Touch (9 June 2008)

Sales of smartphones double in the North America (8 June 2008)

VLC Media Player coming to jailbroken iPhones and iPod Touch (5 June 2008)

iPhone market share shrinks (1 June 2008)

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Discuss this article!
iluvendo (AfterDawn Addict) 11 June 2008 2:46
So much for full disclosure [ + quote]
susieqbbb (Member) 11 June 2008 4:00
this is why we have iphone hacks to avoid paying for there service. and you have to consider that this isn't true because target sells the iphone here in the u.s.a and i don't have to sign any contract from them because they dont sell contracts just phones. [ + quote]
lxfactor (Senior Member) 11 June 2008 9:13
i knew it [ + quote]
lynchGOP (Inactive) 11 June 2008 11:19
Again............those who make greedy, unfair and monopolizing business decisions deserve severe punishment.................the severity which teaches lessons like lashing, stoning and public humiliation or financial destruction. Apple sells this and has no frakkin' business saying "we're selling you a consumer product and you MUST do with it what WE WANT you to do with it." It should be sincerely outlawed to exploit people's wants and desires by tying certain products that are clearly more than capable of working with ANY provider, to only one provider. Cellular is a shady, unfair, overcharging, misleading and flawed business inherently. Many many complaints and problems in the industry and all steps should be taken to make them more "consumer friendly". [ + quote] This message has been edited since posting. Last time this message was edited on 11 June 2008 11:19
llongtheD (Member) 11 June 2008 19:32
@ lynchGOP You are preaching to the choir. Everybody knows this, so what should be done? A boycott? They sell to consumers, or cater is maybe a better word. As long as the majority is willing to pay out the a$$, nothing will be done. [ + quote]
dnxdy (Newbie) 12 June 2008 17:24
Lets face it, the iPhone is a pile of rubbish. Battery life is crap and non-renewable, the functions are basic, the camera mediocre. The only reason anyone would buy this is for the so-called "apple image". Try the LG Viewty....does everything the iPhone does and much much better. [ + quote]
r33mryu (Newbie) 5 October 2008 7:41
If you want to buy a Official Unlocked Hong Kong IPHONE 3G, I can help, pls check: <a href="http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=220288108089/">http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=220288108089</a> [ + quote]
r33mryu (Newbie) 5 October 2008 7:49
If you want to buy a Official Unlocked Hong Kong IPHONE 3G, I can help,pls check: http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=220288108089 [ + quote]