Associated Press delves into legalities of iPhone unlocking

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Comments

  • Reply 21 of 42
    I disagree to the first part of your response. Realistically you can modify your software all you want provided it doesn't damage your hardware. The iPhone comes with a system software restore option. Provided you restore the software, Apple would not likely reject the warranty because it will not likely know you modified the software.



    I agree with the second part of your response. If you violate your warranty, Apple will not refund your Apple Care.



    Quote:
    Originally Posted by bjojade View Post


    Yes, modifying the installed software will void the warranty. No, a voided warranty does not entitle you to a refund on AppleCare. If you decided to smash your phone with a hammer, you're not going to get any warranty coverage, and you won't get a refund either.



    Buying phones, unlocking them, and then reselling the unlocked phones is illegal. However, unlocking your own phone is perfectly O.K. It's minor semantics, but an important detail. Selling the tools to make unlocking should be perfectly legal as long as the tools were created in a legal way.



  • Reply 22 of 42
    Quote:
    Originally Posted by pmjoe View Post




    Yawn. This has been gone over numerous times. The iPhone is subsidized. Apple gets money from AT&T via your service plan. That is how all phone subsidies work. If some people on this site want to pretend otherwise or Apple wants to do some kind of clever labeling of their iPhone finances, more power to you and them. I played with the numbers in another thread on this site, and Apple gets roughly the same money as other phone producers do (though they get a decent premium for getting people to switch from other carriers to AT&T).



    NO IT IS NOT!! Jesus, get it through your bloody small heads. The iPhone is not subsidised!!!



    A subsidised phone remains the property of the NETWORK OPERATOR untll the contract and therefore the handset is paid off. If you break your contract they have a legal right to take the phone from you. The iPhone is not sold as such, the iPhone is your property once you have bought it. Can we please put an end to this now?





    Quote:
    Originally Posted by solipsism View Post


    Which fits in perfectly with the iPhone's new 24-month accounting method.



    No, No, No. The iPhones 24 month accounting method is just following a standard accounting practise for goods or services that raise revenues on an ongoing basis. Plenty of companies account for revenue in this way. Seen as AT&T are giving Apple some kind of kick-back on the monthly contracts then this makes perfect sense.



    In fact, if the iPhone was subsidised i imagine that the opposite may be true, the network is actually buying the handset upfront from the manufacturer so for reporting purposed the whole cost of the handset could be accounted for at time of sale. (the actualll payment of money is not important, it is the invoice amount that counts).
  • Reply 23 of 42
    melgrossmelgross Posts: 33,510member
    Quote:
    Originally Posted by pmjoe View Post


    And no the DCMA has nothing to do with phones. DMCA was designed to protect digital media copyrights, i.e. audio, video, books, etc. If you hacked the iPhone to illegally play DRM'd music/video or read DRM'd e-books, then you'd be volating DMCA. You bought the phone, you can do pretty much whatever else you darn well please with it.



    I presume AT&T has a early termination fee in place to protect themselves from people unlocking the phone?



    The DMCa has nothing to do with ANY hardware. It's the software portion it deals with. The unlocking allowance by the Registrar was solely for the purpose of allowing a phone to make, and accept, calls on another phone network. It doesn't deal with anything else.



    The DMCA was designed to deal with every copyright infringement. Not just for music video or books, but for programs as well, as an example. There are other items it covers.



    ATT has a termination fee for all it's clients. The fee for iPhone clients is the same as for anyone else.



    EDIT: Let me be more clear here. The DMCA was designed to deal with the prevention of breaking the encryption designed to prevent copyright infringement. It doesn't actually deal with the copyrights themselves.



    As far as that goes, absurd as it might be, you still enjoy the rights that licensees enjoy with regard to fair use.



    You just can't actually do it because of the encryption software that you are not allowed to circumvent in order to enjoy those rights.
  • Reply 24 of 42
    melgrossmelgross Posts: 33,510member
    Quote:
    Originally Posted by solipsism View Post


    Apple may still be getting it's cut from AT&T, but That is NOT how all phone subsidies work. The carrier pays the manufacturer a pre-determined fee based on the sale on the device. This happens at the intital sale and has absolutely nothing to do with obtaining monthly service dues. This is a new paradigm in the way manufacturers interact with carriers, it's the main reason Verozon turned Apple down, and it's the biggest issue Apple and AT&T are facing with these unlocking reports.



    The main difference here is that Apple gets the money instead of the customer getting it back in form of a subsidy.



    Apple is making more profit, but keeping the price higher for us.
  • Reply 25 of 42
    melgrossmelgross Posts: 33,510member
    Quote:
    Originally Posted by TerrinB View Post


    I disagree to the first part of your response. Realistically you can modify your software all you want provided it doesn't damage your hardware. The iPhone comes with a system software restore option. Provided you restore the software, Apple would not likely reject the warranty because it will not likely know you modified the software.



    I agree with the second part of your response. If you violate your warranty, Apple will not refund your Apple Care.



    That's true. This is the same as the principle (though it's not necessarily ethical on the part of the consumer) of removing any third party hardware from your computer before bringing it in for repair even if the reason for the damage was that very same third party hardware.
  • Reply 26 of 42
    The issue of unlocked iPhones is an odd one and based on the desire of a lot of people to have one - but not use ATT. Considering the investment ATT made to be "iPhone compliant" I assume that they will be vigorous in protecting their investment.



    On the Apple side, I wouldn't be surprised if there is not a clause in the ATT/Apple agreement that requires Apple to make reasonable efforts to hinder unlocking iPhones.



    The reality is that, at this time, there are only a few features, like visual voicemail, that a user would loose if they unlock their phone and go with another carrier. The question now is what will Apple deliver in the future in terms of restricted features that will only work with authorized carriers? New apps, firmware updates? That is the beauty of using OS X on the iPhone - Apple can enhance ATTs service while denying unlocked iPhones the benefit of the apps or upgrades.



    Personally I would like to see an iPhone user being able to go to another country that has iPhones, get a local SIM card from the iPhone carrier and use it as a local mobile. With the UK, France and Germany getting lined up I wold hope Apple works the contracts to allow that.



    Otherwise I don't see any great benefit in an unlocked iPhone. Especially if Apple delivers a new iPod next week that is basically an iPhone without the phone part.
  • Reply 27 of 42
    physguyphysguy Posts: 920member
    Quote:
    Originally Posted by murphyweb View Post


    NO IT IS NOT!! Jesus, get it through your bloody small heads. The iPhone is not subsidised!!!



    A subsidised phone remains the property of the NETWORK OPERATOR untll the contract and therefore the handset is paid off. If you break your contract they have a legal right to take the phone from you. The iPhone is not sold as such, the iPhone is your property once you have bought it. Can we please put an end to this now?




    What you state is certainly one way of subsidizing a phone purchase but it not the only was to subsidize a phone purchase. If Apple takes a lower margin on the upfront sale of the iPhone because they will be compensated by continuing revenue streams from AT&T, that is a form of subsidy. Saying it differently, if AT&T were not paying them from the contract fees Apple would have had to charge more for the iPhone to make the same amount of profit. That is a subsidy. AT&T is paying money to Apple for YOUR purchase of an iPhone.



    While Apple MAY add functionality to the iPhone (and I certainly believe they will) they have no legal obligation to do so. I did read my contract and license and nowhere did I see that I may return the iPhone for a refund of any kind (partial or otherwise) if Apple fails to add functionality, nor that Apple can committed to add functionality. Its the usual as-is type of software license.



    The account/revenue recognition method and justification are separate issues from the business decision driven by total cost and cash in the door.
  • Reply 28 of 42
    Quote:
    Originally Posted by physguy View Post


    What you state is certainly one way of subsidizing a phone purchase but it not the only was to subsidize a phone purchase. If Apple takes a lower margin on the upfront sale of the iPhone because they will be compensated by continuing revenue streams from AT&T, that is a form of subsidy. Saying it differently, if AT&T were not paying them from the contract fees Apple would have had to charge more for the iPhone to make the same amount of profit. That is a subsidy. AT&T is paying money to Apple for YOUR purchase of an iPhone..



    No it bloody is not, a subsidised phone is one which the network operator has actually subsidised the cost of to allow it to gain a competitive advantage in the market place. The iPhone is not subsidised. Maybe the iPhone would have cost more if Apple never had a deal in place to take a share of revenues from the iPhone but that does not make the handset subsidised by AT&T at all, it just means that Apple have another revenue stream.



    As i have said in other posts however, i believe that the iPhone will have to be subsidised in the UK market when it is released because by law the iPhone will have to be unlocked if requested by a customer and therefore unless subsidised by the network there is nothing in it whatsoever for the network operator and no guarantee of future revenue for Apple.
  • Reply 29 of 42
    bsenkabsenka Posts: 799member
    Quote:
    Originally Posted by bjojade View Post


    Buying phones, unlocking them, and then reselling the unlocked phones is illegal.



    I know that is the general consensus, but I don't think it would hold up to a proper challenge. People sell modified versions of all kinds of things. The Modbook comes to mind, as well as the myriad of car tuners out there. They buy an off the shelf product, modify it in ways that the manufacturer never intended, void the warranty, and resell the product at a value added price.
  • Reply 30 of 42
    melgrossmelgross Posts: 33,510member
    Quote:
    Originally Posted by murphyweb View Post


    No it bloody is not, a subsidised phone is one which the network operator has actually subsidised the cost of to allow it to gain a competitive advantage in the market place. The iPhone is not subsidised. Maybe the iPhone would have cost more if Apple never had a deal in place to take a share of revenues from the iPhone but that does not make the handset subsidised by AT&T at all, it just means that Apple have another revenue stream.



    As i have said in other posts however, i believe that the iPhone will have to be subsidised in the UK market when it is released because by law the iPhone will have to be unlocked if requested by a customer and therefore unless subsidised by the network there is nothing in it whatsoever for the network operator and no guarantee of future revenue for Apple.



    Apple's biggest problem abroad will be convincing the operators to write the software for the Visual Voicemail, and integrate it into their networks. Apparently, that took a lot of work from ATT.



    The question is: Will they do it? And, is there enough time?
  • Reply 31 of 42
    Quote:
    Originally Posted by physguy View Post


    If Apple takes a lower margin on the upfront sale of the iPhone because they will be compensated by continuing revenue streams from AT&T, that is a form of subsidy.



    Yes, that is sort of an subsidy, but not something, that you or Apple can account anyway. There is no way to know that after purchase the customer will open at&t contract or keep it active for 2 years. That would only be accountable if at&t paid for Apple even if the phone is never used in it's network. If that's the case, more respect to the Apple, and still in that case why would Apple really care if the phone gets unlocked or not?
  • Reply 32 of 42
    eckingecking Posts: 1,588member
    Who on earth would give that kid a Nissan 350Z and 3iPhones for 1 unlocked one!?
  • Reply 33 of 42
    melgrossmelgross Posts: 33,510member
    Quote:
    Originally Posted by ecking View Post


    Who on earth would give that kid a Nissan 350Z and 3iPhones for 1 unlocked one!?



    There are a lot of stupid people out there.
  • Reply 34 of 42
    ouraganouragan Posts: 437member
    If I own an iPhone, I can modify it any way that I please. And the manufacturer of the iPhone doesn't retain ownership as iPhones are sold, not leased.



    Any attempt by Apple or ATT to refrain an owner from using the iPhone with another cellphone service is illegal (because they are not the owner of the iPhone) and violates consumer and competition laws.



    If you buy a television set, you can choose to watch any station at the time you want. There are no legal restrictions on your right of ownership. The same is true for iPhones. If you buy it, you own it. If you break it, it's your loss!



    Apple cannot prevent you from enjoying the full benefits of owning an iPhone. But it would be different if Apple or ATT were leasing iPhones for a monthly charge, with or without a yearly subscription or lease.



    The Apple VP of Legal Affairs was paid an $18 million signing bonus in 2006, but his legal advice is damaging Apple and its long term success in the public.



    When are the American antitrust authorities going to act? When is California going to protect consumers?



  • Reply 35 of 42
    netdognetdog Posts: 244member
    Quote:
    Originally Posted by roehlstation View Post


    Go ahead, unlock them, then we'll get to hear reports from people whining because all the features don't work right. You know that's what'll happen. I'm certain they'll be unlocked eventually, it just makes more sense at this point to leave it with one carrier until they are certain everything will work correctly.



    It would appear that someone from AT&T customer relations has entered our midst.
  • Reply 36 of 42
    cnocbuicnocbui Posts: 3,613member
    Quote:
    Originally Posted by ecking View Post


    Who on earth would give that kid a Nissan 350Z and 3iPhones for 1 unlocked one!?



    "Terry Daidone, the founder of Certicell gave him the car plus 3 8GB iPhones which George is sharing among his team."
  • Reply 37 of 42
    pmjoepmjoe Posts: 565member
    Quote:
    Originally Posted by netdog View Post


    It would appear that someone from AT&T customer relations has entered our midst.



    and people from Apple who feel the need to justify their clever accounting for the SEC.
  • Reply 38 of 42
    louzerlouzer Posts: 1,054member
    Quote:
    Originally Posted by ouragan View Post


    If I own an iPhone, I can modify it any way that I please. And the manufacturer of the iPhone doesn't retain ownership as iPhones are sold, not leased.



    Any attempt by Apple or ATT to refrain an owner from using the iPhone with another cellphone service is illegal (because they are not the owner of the iPhone) and violates consumer and competition laws.



    Ah, but keep in mind, then, that if an Apple update fries your modified phone for some reason, its not Apple's fault. Nor is Apple then responsible for allowing you to install any updates to the iPhone OS after you've made your modifications.
  • Reply 39 of 42
    physguyphysguy Posts: 920member
    Quote:
    Originally Posted by Project2501 View Post


    Yes, that is sort of an subsidy, but not something, that you or Apple can account anyway. There is no way to know that after purchase the customer will open at&t contract or keep it active for 2 years. That would only be accountable if at&t paid for Apple even if the phone is never used in it's network. If that's the case, more respect to the Apple, and still in that case why would Apple really care if the phone gets unlocked or not?



    1) That is a subsidy as I take it but if you look up the definition of subsidy you'll note that NO phones are subsidized, as the all the definitions I found require that a government be the source of a subsidy .



    2) It can be accounted for, depending on the contract and because of the locking - so I fully agree with your statement about Apple caring about the locking. Because its locked and unusable without activation (ignoring the unlocking efforts) from an accounting perspective it is reasonable to assume that all phone purchases will result in an AT&T contract (the non-activators would just be accounted as a small loss). Then, given that the AT&T contracts have a cancellation fee and there are establish patterns for estimating the % of cancellations, and IF Apple gets part of the cancellation fee then this is all easily accountable as a 'subsidy'. Once again it depends on the contract structure and details which we don't know.
  • Reply 40 of 42
    melgrossmelgross Posts: 33,510member
    Quote:
    Originally Posted by ouragan View Post


    If I own an iPhone, I can modify it any way that I please. And the manufacturer of the iPhone doesn't retain ownership as iPhones are sold, not leased.



    Any attempt by Apple or ATT to refrain an owner from using the iPhone with another cellphone service is illegal (because they are not the owner of the iPhone) and violates consumer and competition laws.



    If you buy a television set, you can choose to watch any station at the time you want. There are no legal restrictions on your right of ownership. The same is true for iPhones. If you buy it, you own it. If you break it, it's your loss!



    Apple cannot prevent you from enjoying the full benefits of owning an iPhone. But it would be different if Apple or ATT were leasing iPhones for a monthly charge, with or without a yearly subscription or lease.



    The Apple VP of Legal Affairs was paid an $18 million signing bonus in 2006, but his legal advice is damaging Apple and its long term success in the public.



    When are the American antitrust authorities going to act? When is California going to protect consumers?







    You can modify it, just don't bring it back for repair. as far as legal advice to Apple, what are you talking about?



    Jobs said they wouldn't stop people from unlocking the phone.
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