Are one in three iPhones sold being unlocked?

While it likely won't come as much of a surprise to those reading this, it seems that Apple's recently released iPhone sales numbers and AT&T's customer number don't exactly match up, leading those ever so insightful analysts to conclude that many of the phones are being sold with the sole intention of being unlocked. What is somewhat surprising, however, is exactly how many phones that might be. As MacWorld reports, Apple says it sold 3.7 million iPhones in 2007, while AT&T says it signed up about two million or so iPhone customers during the same time period. While those aforementioned analysts point out that Apple's numbers were boosted by 300,000-400,000 sales in Europe, and likely a few sold over the holidays that were yet to be activated, that still leaves over a million iPhones running free out there. If you do the math, that seems to suggest that roughly one in three iPhones sold are being unlocked although, obviously, we're not about to get a confirmation on that number from anyone.

[RAINMAN @ Jan 25th 2008 11:35AM]

maybe, who wants to know?

[Ellianth @ Jan 25th 2008 12:28PM]

yeah, I agree. Who the hell cares?

[John @ Jan 25th 2008 1:01PM]

What about people who already had an AT&T account? They signed up 2 million iPhone customers, but I bet that close to a million already had an AT&T account and just added the iPhone data plan.

[Surur @ Jan 25th 2008 1:06PM]

Or maybe 1 million are lying on AT&T, O2, T-Mobile and Orange shelves, waiting to be discounted. Can anyone say inventory build-up?

http://www.itwire.com/content/view/16278/1023/

[Satish @ Jan 25th 2008 1:23PM]

Two of those are in India, i sent them unlocked...

[Elliott @ Jan 25th 2008 2:09PM]

Once again, Engadget's dedication to excellence [read: Apple] is astounding. I guess they have to meet a quota and have at least one article about Apple on the front page at all times to get that dirty money from Stevey. What about the amount of other phones that are being unlocked...never hear about those.

[darkstar @ Jan 25th 2008 11:37AM]

i'll confirm it for you then.
all of my buddies phones are unlocked.
:)

[Khris @ Jan 25th 2008 11:38AM]

*giggles quietly while reading this on his unlocked iPhone*

[BB @ Jan 25th 2008 3:45PM]

Apple sold approximately 4 million (3.7M + 400k) iPhones.
1 million not registered with AT&T.

My elementary school algebra says that
1million / 4million
is
ONE IN FOUR - not one in three as claimed by Engadget.

A quarter of iPhones are not with AT&T - lucky fellows!
Recently AT&T CHARGED me for using the EDGE network - was it not supposed to be free?
I am now restricted to my college's WiFi only and NO EDGE - iPhone will surely lose the edge when Nokia N95 with S60 comes out with FULL INTERNET WITH FLASH - unlike the iPhone's BABY INTERNET.

I used to be a Macintosh Addict. I went to Rehab after the MacWorld!

.
.
.

[zoom30 @ Jan 25th 2008 11:40AM]

Is it also possible that some accounts have two or more phones associated with them as in a family plan or a small business that gives out one to every sales person and manager.

[Flashpoint @ Jan 25th 2008 11:45AM]

Can someone explain to me the logic of making iPHONES exclusively for AT&T?

Did they get some kind of multi million dollar kickback?

[Khris @ Jan 25th 2008 11:52AM]

What rock did you just crawl out from under?

[jay @ Jan 25th 2008 12:10PM]

I'd like someone to explain this to me too, flashpoint. Many of us only casually follow what Apple does, while others hang on every word.

[Khris @ Jan 25th 2008 12:16PM]

Seriously, Google it. The information is all out there.

[steveo @ Jan 25th 2008 12:28PM]

@Jay

Yes, there is a kickback from AT&T to Apple for each phone sold.

[CraigJ @ Jan 25th 2008 12:30PM]

Actually not for each phone sold. the estimates are that Apple gets $10 a month for the duration of the contract for activated phones.

[KushielsScion007 @ Jan 25th 2008 12:42PM]

Umm count me in too on wanting to know WHY!?

I've tried looking it up and I can't find anything.

So again I ask why the hell is the iPhone exclusive to AT&T?

And why is everyone so amped about this 3G iPhone when apparently both Verizon and Apple are working on 4G phones that will come out in 2009 or something?

[John @ Jan 25th 2008 12:53PM]

It's a pretty smart move on Apple's part, actually. First of all, it creates a demand through exclusivity; if everyone has one, it's not as hyped. Also, Apple, a computer company, probably doesn't have much experience with the workings of the telecom industry, so learning the basics from one company is much easier than dealing with the huge number of wireless companies out there. Also, think of the shift in liability with the iPhone. Usually, when people's phones break, they take them to the wireless store to get them fixed. With the iPhone, Apple is well-known as the makers, so they would be dealing with customer service from every wireless company out there instead of just AT&T's customers.

[Khris @ Jan 25th 2008 12:54PM]

Learn how to use Google!

http://www.usatoday.com/tech/wireless/2007-05-21-at&t-iphone_N.htm

http://www.everythingicafe.com/news/iphone-hardware/att-holds-five-year-distribution-deal-on-iphone-20070522151/

http://blog.wired.com/cultofmac/2007/05/apples_5year_de.html

[Amit @ Jan 25th 2008 1:06PM]

I could be wrong, but I could swear that someone ran the #'s and found that Apple makes another 300-400$ from AT&T on top of what they are getting from the sales themselves. So yes, there is a massive kick-back.
Also, AT&T gave the iPhone support for the visual voice-mail setup that they have going which, from what I understand, is a big selling point for a lot of people.

[Reid @ Jan 25th 2008 1:22PM]

Also Apple "needed" network help in order to bring Visual Voicemail. Now whether that is truly the main reason, who knows.

But seriously, this stuff has been engadget headlines before. you don't have to dig deep.

[tamoghno @ Jan 25th 2008 11:47AM]

i know three people who have them iPhone .

did i forgot to mention that i am from india ?

[Colin @ Jan 25th 2008 11:47AM]

Im buying one tonight actually. Don't even think I can unlock it if I get a 1.1.3.

[Brad @ Jan 25th 2008 11:49AM]

See that all you iPhone unlockers - there are over a million others. You are not smart, you are not elite, you are not a hacker. These people withe the unlocked iPhone think they are always getting away with something and that they are the coolest guy in the room because they unlocked their iPhone. It's mainstream now.

[Khris @ Jan 25th 2008 11:54AM]

Jealous your Mommy wouldn't buy you an iPhone?

Get over it.

[anonymouspimp @ Jan 25th 2008 1:49PM]

LOL @ Brad

Oh my god... tell me you didn't pay to get out of a cell phone contract to switch to AT&T for the iPhone... cuz that's the kind of bitterness I taste from your post! Sucker!

[HEY!!!! @ Jan 25th 2008 11:56AM]

@Brad

locked or unlocked i think everyone with a iPhone thinks there the coolest person in the room.

[Khris @ Jan 25th 2008 12:18PM]

We are! :)

[DIEGO @ Jan 25th 2008 12:30PM]

hahaha good one are you a comedian??

[macona @ Jan 25th 2008 1:44PM]

Hey, I represent tat remark!

[Khris @ Jan 25th 2008 2:02PM]

Phew! Thank god you didn't resent it!

[David Olivo @ Jan 25th 2008 11:56AM]

I remember when the iPhone was first available and it was known that the sim can be hacked. There were two dozen Asians (possibly Indian) buying 3 or more iPhones each in cash repeatedly, and all 20+ of them would meet outside and give it to their "leader" who had a van. That's where the other millions went.

Then, at some point, management at the Apple Store 5th avenue started shouting out that they will no longer accept Gift Cards for the iPhones or cash. Only credit card. or something like that.

[Aaron @ Jan 25th 2008 11:59AM]

My phone is unlocked, the data plans on T-Mobile here in the US are a whole lot cheaper. I pay $20/mo for unlimited data, plus, any phone works with myFaves, since the plan is linked to the phone number, not the application on the phone.

I don't consider myself "elite" for having an unlocked iPhone, but I consider myself a smart consumer for doing so.

[Aaron @ Jan 25th 2008 12:27PM]

Forgot to add, the funniest part was when I went to the local AT&T store to purchase a case for the iPhone (same store where I bought the phone) and got into a conversation with the AT&T salesperson about my unlocked iPhone, why I did it, etc, even showing her the iPhone itself with third party apps, running on T-Mo, etc. She (and others) seemed genuinely interested in the whole process and not once was I shunned by the staff for doing what I did. That's the reaction that surprised me the most.

[Scott @ Jan 25th 2008 3:28PM]

I also have T-Mobile and wouldn't have bought one if I had to pay Ma Bell.

However I'm only paying $6 for the T-Zones unlimited plan and it's not any different than the $20 web plan. I did have to add one extra APN file that took a whole five extra minutes.

I guess that makes me an even smarter consumer. ;)

[Pavan @ Jan 25th 2008 4:01PM]

They probably didn't want to push you away from buying their overprice high-markup cases!

[Aaron @ Jan 25th 2008 5:12PM]

@ Scott: The $20 plan is a "Total Internet Add-On" which is for data devices (formerly my Treo 650, ironically also unlicked from Cingular) and also provides me unlimited T-mobile HotSpot Wi-Fi access as well... still a great bargain IMO.

[DrAnonymouse @ Jan 25th 2008 7:03PM]

sooo..I guess you use the cheapest t-mobile plan with my faves: 39.99, and then you have an unlimited data plan, which you say is 20 a month, though I don't see anything like that on the website... so that means you pay 60 a month for 300 minutes, my faves, internet, no warranty, and no updates... and the cheapest AT&T plan is 60 a month, with 450 minutes, unlimited internet, a warranty from Apple, and guaranteed extremely useful software updates... I'm sorry, maybe I'm stupid but how exactly do you think that's a good deal? I personally haven't found a third party app that I think is worth unlocking my iPhone for. Haha, but whatever suits you I guess...

[Aaron @ Jan 25th 2008 7:50PM]

@ DrAnonymouse:

Yes, My rate is the $39.99 MyFaves. 90% of all my minutes go to those five people anyways, so the 300 whenever minutes are never exceeded. My internet is at $20 grandfathered at the old rate (now $30) and I get corporate discounts through the Navy. (until just recently, these obviously weren't offered). So, after fees and everything, I am paying roughly $65/month.

For me to switch to AT&T, I would have to cancel my T-Mobile account, costing me a $175 termination fee, and apply for an AT&T account ($200 deposit plus applicable application fees). and I get 450 minutes. I use more minutes than that in a month, but since it's limited to the five people, The T-Mobile plan makes more sense.

Warranties are practically useless to me, since I habitually take care of my electronics anyways.

Also, AT&T currently does not offer the inclusion of WiFi with their iPhone plans, whereas T-Mobile does. This is a big factor when i travel.

Updates? I have 1.1.2 right now. Granted, i have to wait for the open source community to create the workaround, but I still get the updates.

And the number one factor: customer service. AT&T is consistently ranked among the lowest (if not the lowest) for customer service. On the other hand, T-Mobile is on the opposite end, being among the top (or being the top) in customer service.

And finally, what was the point of your post, were you trying to make me feel guilty for doing what I did? Because I can guarantee you that anyone who has gone the path of unlocking and using the iPhone on another carrier feels absolutely no guilt for doing so, or else they would simply be AT&T customers and not know any different.

[whatishalo? @ Jan 25th 2008 12:02PM]

This just goes to show Apple chose the wrong biz mode on this one!

If they because a phone supplier to any network that can handle the technology (damn you Sprint CDMA) they would have hit their 10 million unit mark already!

Too bad they decided a piece of the subscriber pie was the way to go...so sad for you APPL!

[Frankenstein Black @ Jan 25th 2008 12:24PM]

Over 4 Million sold, but how many actually activated on the blue n white "death star" network? Anyone care to a guess at a number? I'll take the first crack at it:
- 1.4 mil?
next...

[derX @ Jan 25th 2008 12:56PM]

....I hope you meant AT&T. Why the hell would Apple have a problem with people buying their product? Regardless of whether the phones have been activated or not, it's still a sale for Apple.

[Kris @ Jan 25th 2008 1:00PM]

I fail to see how Apple's business model is flawed. Sounds like Apple is getting money either way and while they'll get a little less form unlocked phones, AT&T is hurting more so than Apple. Remember, AT&T worked with Apple to developer some items like visual voice mail so any phone sold that goes onto another network is less money in AT&T's pocket.

[whatishalo? @ Jan 25th 2008 12:03PM]

...and I need to learn to proof before I click submit...

[freediverdude @ Jan 25th 2008 12:06PM]

I would think either Apple or AT&T would be able to compare a list of serial numbers sold versus serial numbers activated, and come up with a pretty precise number of unlocked phones. I bet they're watching this closely.

[EricR @ Jan 25th 2008 12:10PM]

Seems to me that Apple was the smart one in this deal because they are (and will be) selling their phones. It's AT&T that gets the short end of the stick... You'd think they would have guessed this.

[Khris @ Jan 25th 2008 12:19PM]

Exactly! Apple whispered sweet nothings, and AT&T bent over to take it.

[anonymouspimp @ Jan 25th 2008 2:01PM]

How is AT&T getting the short end of the stick here? They didn't "sell themselves out" or "take a chance" here, they made a good business decision... they KNEW Apple fans would pay ANYTHING to get one of these, and get a few other curious people who desperately need what they think is the new "it" thing. So what do they do... they overprice a service plan for the iPhone, kick $10 back to APPL and there you have it, AT&T gets a bunch of new customers into expensive contracts (which they'll have for at least 2 years), and exclusively landed the "hot, new phone" and appear to be on the cutting edge because of it. Jobs and Apple didn't trick anyone. They just took the best offer.

[ron @ Jan 25th 2008 12:15PM]

1. are you asking ot telling?

2. blogger alert!!! "...obviously, we're not about to get a confirmation on that number from anyone."

3. every headline that ends with a question mark is just lame.

[Bassir @ Jan 25th 2008 12:18PM]

Sneaky bastards.