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Iphone News: The sleek Apple iPhone comes with a bad connection

Monday, September 3, 2007

The sleek Apple iPhone comes with a bad connection


Three months ago, Apple launched the iPhone, the device that CEO Steve Jobs proclaimed would redefine the mobile phone industry in the same way that the iPod revolutionised the music business. US consumers have had a chance to get to grips with the device, so now seems a good time to compile an interim report.
Jobs's pitch for the phone was characteristically audacious: the device cost an arm and a leg - $499 for 4GB and $599 for 8GB - and that's just for starters. Apple had struck a deal with AT&T, which meant that in addition to shelling out for the handset, you had to sign up to an AT&T contract for 24 months. The phone was locked to the AT&T network - and you didn't even get 3G connectivity. In fact, most of the time you got the kind of connection speeds that made one think fondly about dial-up modems.
It's an odd way to start a revolution, to put it mildly. The iPhone is a lovely piece of kit - in effect, a sleek, powerful personal computer running an industrial-grade operating system. It has the capability to be a really disruptive device in an industry that badly needs disruption. But it comes shackled to an unpopular, low-tech mobile network. So acquiring one is like buying a Porsche engine and fitting it to your lawnmower. People figured out quickly that you could cancel AT&T's inernet service to get its browser to work only via wi-fi; but you couldn't use it on any other mobile phone/data network. (And still had to pay the 18-month AT&T subscription.) This was not a fundamental technical limitation of the device, but a technological shackle designed by Apple to drive business to AT&T.
We are now starting to see the commercial rationale for the bodge. It turns out that Apple gets $3 a month for every existing AT&T subscriber who has bought an iPhone and $11 a month for every new customer. That looks like about $150 per user for Apple, on top of the margin on the phone itself. So although Apple can make money selling iPhones to anyone, the company gets considerably more if it drives those users to AT&T. Which is what it is doing.
This makes good commercial sense, but technologically speaking it's idiotic. Given the technical capabilities of the iPhone, it ought to be untethered in the way that, say, the Nokia E61 is. Not surprisingly, this thought has occurred to a lot of geeks and several unlocking methods have appeared in recent weeks.
First of all, a New Jersey teenager, one George Hotz, took a soldering iron to his iPhone, wrote some software and announced that he had used the phone on T-Mobile. It had taken him, he claimed, about two hours. This is reassuring evidence of teenage ingenuity, but not everyone is a dab hand with a soldering iron, so the Hotz hack was trumped by news that a quick way of unlocking an iPhone using only software had been found. A company named UniquePhones launched iPhoneSIMfree.com, announcing a method that left virtually all the iPhone's features intact. A representative of the technology site Engadget reported that 'iPhoneSIMfree.com's software solution completely SIM unlocks the iPhone, is restore-resistant, and should make the iPhone fully functional for users outside of the US'.
The UniquePhones folks then announced plans to sell licences for their recipe, which seemed a nice way of living off their programmers' wits. But then a lawyergram arrived from AT&T making threatening noises about copyright infringement and illegal software dissemination. This seems like bluff to me, but I'm no lawyer. What matters is that UniquePhones took fright, announcing that it was putting the key-release on hold while legal advice was sought.
So iPhone users will have to wait a bit longer before they can escape from AT&T's walled garden. While they wait, here are some thoughts to ponder. First, if the law does indeed say that the iPhone can't be unlocked, then the law is an ass. As the Princeton security expert Ed Felten puts it: 'The law should hesitate to micromanage what people do with the devices they own. If you want to run different software on your phone, or want to use one cell provider rather than another, why should the government interfere?'
Second, note that it's AT&T's lawyers who are doing the dirty work, not Apple's - even though Apple stands to lose quite a lot initially from unbridled unlocking. Neat footwork by Steve Jobs, eh?
Third, there is the question of which mobile operator will get the exclusive iPhone deal in the UK. And - given that the availability of unlocking methods is now a racing certainty - whether it will be worth the paper it's written on by the time the deal is signed. Stay tuned.

1 comment:

Anonymous said...

I believe Apple would benefit more by having the phone unlocked. My guess is their profit margin on the iPhone would be higher than the revenue generated from their deal with AT&T.

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