I wrote Monday about efforts to “unlock” the iPhone so it worked on non-AT&T cell networks, and the associated legal and policy issues. AT&T lawyers have aggressively tried to stop unlocking; but Apple has been pretty silent. What position will Apple take?
It might seem that Apple has nothing to lose from unlocking, but that’s not true. AT&T can exploit customer lock-in by charging higher prices, so it has an obvious incentive to stop unlocking. But AT&T also (reportedly) give Apple a cut of iPhone users’ fees, reportedly $3/month for existing AT&T users and $11/month for new users. This isn’t surprising – in exchange for creating the lock-in, Apple gets to keep a (presumably) hefty share of the resulting revenue.
Apple’s incentive is much like AT&T’s. Apple makes more money from iPhone customers who use AT&T than from those who use other cell providers, so Apple gains by driving customers to AT&T. And it’s not pocket change – Apple gets roughly $150 per user – so even though Apple gets money for selling iPhones to non-AT&T users, they get considerably more if they can drive those users to AT&T.
Thus far, Apple seems happy to let AT&T take the blame for intimidating the unlockers. This mirrors Apple’s game plan regarding music copy-protection, where it gestures toward openness and blames the record companies for requiring restrictive technology. If this works, Apple gets the benefit of lock-in but AT&T gets the blame.
From Apple’s standpoint, an even better result might be to have iPhone unlocking be fairly painful and expensive, but not impossible. Then customers who are allergic to AT&T would still buy iPhones, but almost everybody else would stick with AT&T. So Apple would win both ways, selling iPhones to everybody while preserving its AT&T payments.
What a clever Jobsian trick – using a business model based on restriction, while planting the blame on somebody else.