updated 12:25 am EDT, Sat October 27, 2007
Restricted iPhone sales
Apple this week began restricting its sales of iPhones in attempt to block users from reselling them. Apple confirmed circulating reports that it will no longer accept cash for iPhone purchases as an attempt to people from reselling them, and that it now limits sales of the popular mobile device to two per person, according to The Associated Press. Much like it limited sales during the iPhone launch, the new policy is to ensure adequate iPhone inventory for a larger number of customers; it started Thursday, Apple spokeswoman Natalie Kerris told the publication. Before that there was no cash restriction and the purchase limit was five per person.
In late June, Apple also limited sales of the iPhone to two per person as launch supplies were limited, but soon after lifted that as the company ramped up production of the device and demand began to subside. Apple execs still expect to sell about 10 million iPhones in 2008, while some analyst predict as many as 45 million in 2009.
"Customer response to the iPhone has been off the charts, and limiting iPhone sales to two per customer helps us ensure that there are enough iPhones for people who are shopping for themselves or buying a gift," Kerris said. "We're requiring a credit or debit card for payment to discourage unauthorized resellers."
On Monday, the company announced that more than 1.4 million iPhones have been sold, but estimated that 250,000 were sold to unlockers -- those who modify the phones to work on networks other than AT&T, Apple's exclusive partner. Apple warned that its updates may disable or damage the iPhone, but hackers continued to find ways around Apple's security, releasing new utilities to unlock the latest v1.1.1 software.
While the locked iPhone/AT&T ecosystem has spurred controversy and even a few class-action lawsuits by customers, the company will have its greatest challenge in France where one law requires that make it available as an unlocked device. The company expects to launch in France late this year with network carrier Orange. While the French iPhone carrier Orange indicated that it would sell the iPhone in both locked and unlocked versions for the country, Apple spokespersons later denied the report.
The future of locked mobile phones remains cloudy following a Sprint/Nextel settlement agreement, announced Friday, that would provide unlock codes to customers who cancel their contracts, or whose contracts have expired.
Although also bolstering its partner's mobile subscribers numbers, a large portion of Apple's revenues and profits rely not only on sales of the popular device, but also on the activation with Apple's exclusive network partner: the company is reportedly reaping revenue shares of up to $18 per month.