Report: 400,000 unlocked iPhones loose on Chinese network

Posted:
in iPhone edited January 2014
Nearly half of the 800,000 to 1 million iPhones that are believed to have been unlocked for distribution and use outside Apple's sanctioned networks may be in China, according to a new report.



Market research firm In-Stat reported Friday that China Mobile, the nation's largest wireless carrier, said there were 400,000 unlocked iPhones using its cellular network service at the end of 2007, representing approximately 10 percent of the touchscreen handsets sold at the the time.



"The figure surprised us as it is fourfold of that we estimated before," the firm said. "We have never doubted that the iPhone will achieve greater success than iPod in China if Apple teams with China Mobile to launch its Chinese version."



The surge is credited to a fundamental difference between American and Chinese buyers. Where most US buyers confine smartphone purchases to the workplace, Chinese customers often use their phones for entertainment or Internet access, such as playing music or e-books. Apple's focus on this last usage pattern for the iPhone, especially with its user interface, makes it a logical fit for the market.



Chinese are also more likely to spend larger amounts of money on their phones, In-Stat says, despite lower average incomes. A full fifth of all phones sold in the southeast Asian country cost at least 4,000 Yuan Renminbi each, or $533.



Separate reports in recent days have pointed to China as the heart of a thriving gray market economy in unlocked iPhones. With as many as one million of these devices on the market around the world, the country is potentially a hotbed of supply chain leaks that sees iPhones reach unofficial hands before ever reaching territories officially slated to receive the shipments.



Analysts have wrestled with tracking the missing devices themselves and, in one case, estimated that the number of iPhones in use outside of Apple's official bounds could total 1.5 million, or more than a third of the entire supply as of last month.



In the short term, however, Apple is unlikely to convert this semi-underground trade into legitimate business. China Mobile, the dominant carrier in the country, claimed to have ended talks regarding an official iPhone in January. Company chief Steve Jobs later contradicted these claims and said that the provider had only made one visit to Apple headquarters to discuss the possibility of a Chinese iPhone.
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Comments

  • Reply 1 of 109
    Real iPhones or ClonePhones?
  • Reply 2 of 109
    teckstudteckstud Posts: 6,476member
    So much for everybody's theory on here that is was a "French Connection". I've always thought it a bit presumptuous that people would think the French were planning trips to the USA just for the iPhone as if Europeans are that dumb and obssessed. They've had amazing cellphones in Europe that we've never even seen for years and are probably yawning about the whole thing - hence the less than stellar French sales figures.
  • Reply 3 of 109
    No teckstud, the French are waiting for iPhone version 2 with 3G. Just like millions of other potential buyers.



    Oh, and I would like a link to these "amazing cellphones in Europe that we've never even seen". They must be quite something if Europe is "yawning" over the iPhone.
  • Reply 4 of 109
    Jeez. Apple could really do everyone a bloody favor by breaking the at&t contract and making the iPhone available to everyone.
  • Reply 5 of 109
    Quote:
    Originally Posted by AppleInsider View Post




    the country is potentially a hotbed of supply chain leaks that sees iPhones reach unofficial hands before ever reaching territories officially slated to receive the shipments



    .



    Does this mean they fell of the back of a truck. Is Apple getting money for these 800,000 iPhones? Maybe Apple should have supply chain overseers installed, or is that embedded.
  • Reply 6 of 109
    Quote:
    Originally Posted by SpamSandwich View Post


    Jeez. Apple could really do everyone a bloody favor by breaking the at&t contract and making the iPhone available to everyone.



    EXACTLY! This locked phone business is silly.
  • Reply 7 of 109
    Quote:
    Originally Posted by SpamSandwich View Post


    Jeez. Apple could really do everyone a bloody favor by breaking the at&t contract and making the iPhone available to everyone.



    I think Apple already knows that it would have to unlock iPhone at some point. I believe they knew since the beginning. So I am guessing they're already working the fine details of their agreement with AT&T.



    By deciding to go with an unlocked iPhone, it would seem that Apple will be basically screwing AT&T, which helped (considerably?) when the iPhone was launched. But, AT&T also made profit from all the customers re-newing their contracts.



    I keep on wondering why Apple entered into such an agreement, and now the more I think about it the more sense it makes.



    Use AT&T to get it off the ground -> Launch it to the masses with their help -> Screw AT&T by going on as free agents.



    Makes sense, doesn't it?
  • Reply 8 of 109
    Wouldn't AT&T then be able to sue for damages. Isn't there a 5 year exclusive agreement. And the damages would be easily accounted for. The greater the success of the iPhone, the greater the damages. If the iPhone were to be unlocked, wouldn't that be the end of the revenue sharing as well. Remember, Apple is profit driven, not market share driven.
  • Reply 9 of 109
    Don't know the figures, but lots of iPhones even in the Philippines. Check out the local MUG...

    http://www.philmug.ph
  • Reply 10 of 109
    Quote:
    Originally Posted by one9deuce View Post


    Oh, and I would like a link to these "amazing cellphones in Europe that we've never even seen"........



    Me too! (And, it would be even more impressive if it was multitouch, because that is really the only basis for comparison).



    Or, Mr. Tech Stud, are you just blowing smoke?
  • Reply 11 of 109
    eaieai Posts: 417member
    AT&T only have an exclusive in the US. They can sell them unlocked for use outside the US if they want... I imagine they may be forced down this route if the number of networks willing to make AT&T style deals dries up. It seems likely it's high up Apple's list of priorities right now - they need to have a stable set of outlets for the iPhone before iPhone v2 is released I'd say.



    Let's just hope the 400,000 iPhones in China are bought from Apple and not stolen.



    Apple ideally would like a world where the phone is king - and the networks implement the iPhone specific features based on customer demand (and as an incentive to use their network). Currently, an unlocked iPhone doesn't get Visual Voicemail which is an obvious differentiator. What really needs to happen is for the whole industry to open up - using open standards for things like visual voicemail and allowing any handset the customer wants.



    I think the industry might get there eventually.
  • Reply 12 of 109
    as someone who always respects IP, this locking of phones is a joke and I'm on the verge of buying an iPhone on my next trip to London. With Apple's policy of tying to a telco, it's going to be forever before it reaches me here in Singapore (still no iTunes capability here so still stuck to buying CDs).



    Wake up Apple - there is a TRUCK load of business out there waiting for you.
  • Reply 13 of 109
    it is only fair for Steve to set iPhone free ...
  • Reply 14 of 109
    Quote:
    Originally Posted by eAi View Post


    AT&T only have an exclusive in the US. They can sell them unlocked for use outside the US if they want...



    Have you seen the contract between Apple and AT&T?



    Just because A is true, doesn't mean B is true.



    It's obvious that Apple selling unlocked iPhones outside of the US would affect the US market through gray market imports. There is almost certainly a clause in the Apple AT&T contract that says that Apple cannot sell unlocked phones anywhere without prior AT&T consent.
  • Reply 15 of 109
    I can also verify that there are heaps of iPhones in Russia, mostly Moscow obviously. They have their own sources for hacking software and applications and the phones seem to work fine. I never asked about visual voicemail.
  • Reply 16 of 109
    >may be in China...



    Wish Google could release more detail regarding iPhone searches.

    They ought to know the location of those iPhones.
  • Reply 17 of 109
    Quote:
    Originally Posted by eAi View Post


    AT&T only have an exclusive in the US. They can sell them unlocked for use outside the US if they want... I imagine they may be forced down this route if the number of networks willing to make AT&T style deals dries up. It seems likely it's high up Apple's list of priorities right now - they need to have a stable set of outlets for the iPhone before iPhone v2 is released I'd say.



    Let's just hope the 400,000 iPhones in China are bought from Apple and not stolen.



    Apple ideally would like a world where the phone is king - and the networks implement the iPhone specific features based on customer demand (and as an incentive to use their network). Currently, an unlocked iPhone doesn't get Visual Voicemail which is an obvious differentiator. What really needs to happen is for the whole industry to open up - using open standards for things like visual voicemail and allowing any handset the customer wants.



    I think the industry might get there eventually.



    Apple not only has an exclusive contract in the US, but also in Germany, Great Britain and Italy. In France Orange sells an open iphone for ?999 as opposed to the locked down iphone for ?399...
  • Reply 18 of 109
    ajmasajmas Posts: 573member
    Quote:
    Originally Posted by Delfoniq View Post


    I think Apple already knows that it would have to unlock iPhone at some point. I believe they knew since the beginning. So I am guessing they're already working the fine details of their agreement with AT&T.



    If they did, then I can only guess that the current approach was the only way the could encourage the networks to change their business model. See it as a compromise. The question is whether expected there would be an underground market this fast?



    In the meantime us Canadians are having to get the iPhone on the gray market too. Telus will probably be 4G GSM by the time Roger gets the clue stick.
  • Reply 19 of 109
    Quote:
    Originally Posted by ajmas View Post


    If they did, then I can only guess that the current approach was the only way the could encourage the networks to change their business model. See it as a compromise. The question is whether expected there would be an underground market this fast?



    In the meantime us Canadians are having to get the iPhone on the gray market too. Telus will probably be 4G GSM by the time Roger gets the clue stick.



    Is Telus preparing to switch to GSM? Toronto Star, Feb 16, 2008



    http://www.thestar.com/article/304105
  • Reply 20 of 109
    xamaxxamax Posts: 135member
    It's really negative that Apple is going more and more protective, it MUST trust itself and its products and the market to sort itself up to deserving success. Apple can still get some control over the software etc., where they are good, and let the market show them how amazingly well it appreciates Apple's products.



    The time has come for products like Apple's to reach mass audience. And Steve has placed Apple at the right spot in the [almost] right moment.



    This article is very illuminating and so was the one with the list of countries where the iPhone is unlocked. It is just amazing how a product can be so unbelievably successful and equally amazing how its creators can be so unwilling to let go and profit from it. Loosen up, Apple!



    ---



    People, for the last time, the iPhone is not expensive, it is in fact cheap at these prices! Wake up and smell the coffee! The cheapest WM6 based model HTC is just about going to launch, a very basic GPRS-GPS model, will be going for more than ?440 and I'm pretty sure it's going to be a huge hit, I tell you. Compare the iPhone to Nokia or HTC prices and open your eyes, my friends. The iPhone could very easily be sold for ?650 and it would still be a hit in Europe, should it be operator-free and 3G. It's Euros, not USD. Only cheap bastards can complain of the iPhone being expensive and its price being success limiting. Maybe it's a matter of US market perception and maybe Steve was fearful and tried to secure the product through AT&T like suggested. If it wasn't for that 'security' and fear factor, the iPhone would now be an overwhelming success, at least quadruple of what it is right now, and really have taken over the world.



    All this to get to the biggest problem - if it has one - with Apple in this opening up to the cellular market: it's that it's a US operation! It launched the product biased on US [mis]conceptions and perceptions and, if it weren't for the product's brilliance, it would be failing miserably because of that.



    Just register this in your minds: the de facto world center for cellular phones and mobile products is Europe, not the US, the same way the Mobile World Conference was held in Barcelona, Europe and not in the US or anywhere else! Having changed from Apple Computer to Apple Inc., i.e. from computer centric to mobility/home/consumer centric [see the MBA?], should have in itself justified Steve to have bought Apple an operations building in London and center his working life on his jet plane, flying back and forth between US & EU. That would have been smart[er].



    As an European who's ever been in love with the US and its technology, I have never ever quite figured out why American companies, save for a few exceptions, seem to generally be so lousy in marketing products 'overseas' when they can do so much better if they build and think their business globally and not as US-centric. The simple word 'overseas' says it all. It's a gross management error and, should Steve Jobs not see to it quickly, it may really mark Apple's future.



    The world has gone de facto global, moreso when you have set your business, like Apple is doing, in order to make every established giant in the world your adversary. Think about it.



    This is yet another reason why Apple should consider buying Sony [and, why not, HTC], per a Bloomberg analyst suggestion. It's within their reach, it's a wonderful synergy and it would be an instant channel opener

    - Japan's huge market where people are used to spend big sums in handheld gear and

    - all of Europe where it is really well implanted with factories, stores, etc. etc. etc.

    HTC would simply be a case of buying out competition and genius, it's a small company and yet it's done a huge success. They are in fact the manufacturer's for Sony' Xperia1 who is a real potentially iPhone killer.



    Thank you for your attention.
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