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Apple restricts iPhone sales citing demand, unlockers

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.




by MacNN Staff

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Comments

  1. chadpengar

    Joined: Dec 1969

    0

    no cash -- is it legal?

    My money says on it: "This note is legal tender for all debts public and private." Sounds like by law they have to accept cash to settle the debt from purchase.

    IANALAIDPOOTV

  1. driven

    Joined: Dec 1969

    0

    Yes .... it is legal

    Many places won't take cash. Scottrade for example.

    Legal tender for all debts public and private doesn't mean you have to accept it, but simply that it is legal currency with (at one time) the backing of gold.

  1. ZinkDifferent

    Joined: Dec 1969

    0

    all it means...

    ..is that *IF* you accept it, you can be assured that it is worth the value printed on it, and that the US government will stand behind that value -- it does not mean that anyone, especially not a private business, *has* to accept cash.

    The means and methods of payment for transactions in the private sector are up to the participants to agree to - Apple could require payment in clamshells, and it would be your responsibility to provide them...

  1. robttwo

    Joined: Dec 1969

    0

    Cash?

    What's that?

  1. Eriamjh

    Joined: Dec 1969

    0

    Cash?

    So what? Unless the unlockers don't have good credit, credit is just as easily used. Apple cannot force you to keep the phones you buy (they could be gifts). The biggest restrictor will be the 2-per person limit.

  1. makesense

    Joined: Dec 1969

    0

    conspiracy

    conspiracy with credit card companies?

  1. thinkman

    Joined: Dec 1969

    0

    Good call!

    Consider how hard it must be for any company to limit the sales of their products - especially one such as the iPhone that is in such great demand! Apple is being a good partner to AT&T by doing this. I doubt they are under any obligation to AT&T on this score, but Apple does also receive a healthy return from the subscriptions.

  1. imagine engine

    Joined: Dec 1969

    0

    iPhone restrictions

    Forcing customers who want to purchase an iPhone from Apple to only use a major credit card will not stop people from reselling them on eBay, craigslist, etc. Apple's under the impression it's only people from other countries such as Canada that are buying the iPhone to unlock and use on GSM networks such as Rogers. The reality is a lot of Americans are buying the iPhones in bulk to sell to third parties internationally. Limiting the method to only credit card transactions will really only help track who is buying the iPhone and how many times they do. I do find it a wise idea to limit the purchase to 2 iphones instead of 5 so as to keep up with supply and demand. I have seen Apple store reps sell up to 10 iphones to one customer who pays cash which seems unfortunate for those standing in line that may be told "Sorry we're all sold out.".

    I had no difficulty buying my iPhone in Seattle with my credit card and showing my Canadian ID. I was given a warning about unlocking it may void the warranty and about the 14 day return policy. Apple still is getting their money, it's just AT&T that isn't for the network service unless I'm roaming in the USA.

    My only complaint about the whole process is I wish that Apple would take example from companies such as RIM, HTC and Palm with selling a higher priced unlocked version and one at a lower price that is locked to the carrier.

  1. drole.homme

    Joined: Dec 1969

    0

    really cash?!

    Who walks into an Apple (or AT&T) store with $500 in cash in your pocket?

  1. robttwo

    Joined: Dec 1969

    0

    imagine stalled

    Let's see - one of the most proftable and innovative companies in the history of the world should take "example from RIM, HTC and Palm" ??

    Doofuses.

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