Having spent the last hour reading through almost 14 pages of posts, it seems clear that many respondents are simply talking past one another on a variety of issues such as competition in the market place, corporate greed, governmental regulation, divergent political systems etc. Others have gone out of their way to compare apples to oranges, thrown in red herrings to deflect or obfuscate the arguments of others or simply twist facts to support the "truthiness" of their own belief systems. Soviet Ministries indeed!
In the spirit of disclosure and in order to place my comments below in context, I am an American that adores Europe and who would gladly live the rest of his life in London, Paris or Berlin (three of my favorite cities!) if I were free of family obligations. That said, I am a firm believer in free markets operating under full and fair competition (as the least offensive economic system devised so far), but only so long judicious regulation said markets ensures that they remain full and fair.
The sale of the iPhone raises several different but interrelated questions. Should the IPhone be available as an unlocked, stand alone product similar to Apple's other products? Is it legal in jurisdiction X for Apple and its cell phone partner to sell its iPhone only as a locked product? In jurisdictions requiring some form of unlocking, can Apple (and/or its cell phone carrier partner) comply by offering an unlocked phone at a price close to the cost that a consumer would have incurred if the consumer had purchased the locked phone in combination with the carrier contract? Is Apple's heterodox profit sharing plan with cellular carriers a good thing for the market place and/or the consumer. Is Apple becoming the very sort of high handed, share holder driven, money-grubbing corporation that it attempts distinguish itself from (e.g., Microsoft, IBM, telcos, cable providers, etc.)? In other words, has Apple the company lost faith with the Mac users and does this bode ill to the in roads it is attempting to make in its core computer business as well as its burgeoning consumer electronics business?
Right off the bat, it seems to me prudent to lay to rest the debate about whether the iPhone is subsidized the the cell phone carriers or whether, in fact, Apple's price point is reasonable in view of the pricing of the iTouch iPod, which provides substantially the same hardware functionality minus the phone functions. This is not a trivial point as some have suggested because recent changes in laws in North America and Europe to allow SIM locking were rationalized by the carriers as a way for them to recoup subsidies that they provide on high end phones through customer retention. Samab and others have repeatedly pointed out that it is virtually impossible to determine this point objectively because of the way costs and investment accounting can be twisted. However none of this is really germane. Apple itself has stated to its shareholders on several occasions that it does not receive any PHONE subsidies from its carrier partners. In addition, Apple has priced its iTouch iPods similarly to its iPhone product, with the cost delta reasonably derived from the hardware/software differences between the two products. At least in the U.S., representations made to share holders have strict legal ramifications. It would be impossible therefore for Apple to report profits/write offs on the iPhone as subsidy income after making unequivocal public statements that the phone is in fact not subsidized. The importance of this point will become apparent in the discussion below regarding SIM locking as a way to recover handset subsidies by the telcos.
Should Apple sell the iPhone unlocked? Apple can of course do as it pleases, subject to local law. It seems clear on the evidence to date, however, that Apple's customer unfriendly stance of selling only locked phones was a calculated ploy to force its partners into "fee sharing" arrangements. I am completely unconvinced by the arguments of certain Apple apologists that the big bad telcos are "forcing" Apple to do this. If that were so, why hasn't Nokia, or any other phone manufacturer, been forced to offer its flagship products as single carrier lockins fro market to market.
Is it legal in jurisdiction X for Apple and its cell phone partner to sell its iPhone only as a locked product? This is fact fact the case in North America, and I have no reason to disbelieve Samab's assertion that this is fact fact the case in most European jurisdictions, save Belgium. In the case of Germany, however, I do not believe that T-Mobile's position is unassailable as some have suggested. In order to succeed in a motion for a preliminary injunction, one must show a likelihood of success on the merits at trial. In other words, those suing T-Mobile must have shown that their interpretation of the unlocking requirements under German law were correct and likely to succeed. I'm not sure that the failure of German regulators means anything notwithstanding Samab's assertion otherwise. In the U.S., court decisions based on law always trump regulatory findings, otherwise non elected regulatory officials would have no accountability.
In jurisdictions requiring some form of unlocking, can Apple (and/or its cell phone carrier partner) comply by offering an unlocked phone at a price close to the cost that a consumer would have incurred if the consumer had purchased the locked phone in combination with the carrier contract? Once again, this will be a matter specific to each particular jurisdiction. However, laws or regulations requiring unlocking would be worthless ab initio if the carrier could circumvent the spirit of the law by offering the "unlocked" product at a price similar to or the same as the locked product plus contract fees. Many of the most vocal supporters of carriers being allowed to force the consumer to buy a locked phone justify this on the basis of the carrier being able to provide consumers with subsidized high end phones. I'm not sure I see how the consumer benefits since she is locked into a long term contract that usually entails stiff penalties to break and which ultimately extract the cost of the non-subsidized phone from the consumer over the term of the contract. However, this simply isn't an argument one can make with the iPhone, since the iPhone by Apple's own admission is not subsidized. Apple's rationale for locking the phone is to provide a captive consumer pool to the carrier in order for Apple to extract revenue from the carrier. I see no consumer benefit here at all. Think Different indeed! In fact, I find Apple's actions here to be highly anti-consumer in that it sets a precedent for making the cell phone market more vertically integrated and proprietary over time, thereby reducing effective and fair competition. In effect the consumer ends up paying more for less choice in carrier and ultimately in the availability of fewer features and plans.
Is Apple becoming the very sort of high handed, share holder driven, money-grubbing corporation that it attempts distinguish itself from (e.g., Microsoft, IBM, telcos, cable providers, etc.)? In other words, has Apple the company lost faith with the Mac users and does this bode ill to the in roads it is attempting to make in its core computer business as well as its burgeoning consumer electronics business? Sadly, I think both preceding questions must be answered in the affirmative. I've been an Apple supporter since the late 1980's and whethered the derisive comments from friends and colleagues in the late 90's when everyone told me that I had bought into a "dead platform." I was over joyed to see the turn around in Apple's fortunes following the introduction of the iMac, iPod, iTunes and the rest. Of late, I've become dismayed by both Apple's attitude and actions as a company, from its smug advertising campaigns, to shoddy workmanship on some of its products (and its tendency to minimize its own missteps and blame its customers - discolored iBook palm rests or scratched iPod screens anyone?) But what troubles me the most is the growing sense of rapacious greed that seems to be pervading the company from accounting snafus designed to make the corporate elite even richer (say Steve, are enjoying those back date share options?). When a company values the exceedingly short term interests of its share holders more than its customer base, it is definitely heading down the wrong road. How many off us thought Apple would try and fleece its iPhone early adopters in such a blatant fashion.
In the end, you can enjoy the technology and try and spur the company on to do its best without having to be a cooky religious fanatic for ever apologizing or explaining away everything bad that Apple does. I think the iPhone is indeed a phenomenal product that will redefine the way people interact with their phones. That doesn't mean that I want to be ripped off as an early adopter; told I can't access and use the hardware that I've lawfully purchased by preventing its use as a hard disk or preventing the instalation of third party apps; nor do I want to be told that the only way I can have a precious iPhone is to sign up with Apple's annointed choice of cell phone carrier (IMHO the WORST carrier in the U.S.) so I can pay inflated rates from which Apple gets a substantial kick back. Apple shouldn't have to tax us through the back door to extract the profit it thinks it deserves from each phone. In a truly capitalistic, market driven system, Apple would charge up front what it thinks the phone is worth, let us use it as we want, and then let the chips fall where they may.
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PowerBook 1.0 GHZ G4, MacBook 2.0 GHZ, MacMini 1.66 GHZ, Intel iMac AluGlass 24 inch; 5 GB G1 iPod, 30 GB G5 iPod, iPod Touch 16 GB; Airport Extreme Gigabit Router
