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iPhone 3G activation to involve two steps?

updated 11:30 am EDT, Thu June 26, 2008

Two-step iPhone activation

The activation process for iPhone 3Gs may actually be a two-step process, an Italian site claims to have learned. Anonymous sources suggest that the first part, the forced in-store activation, will involve getting each user signed up to their respective carrier, and their contracts started; the second, however, is believed to involve the App Store and iTunes, because of special billing information needed to download software. 3G owners will be able to buy and download programs through cellular broadband as well as local connections, though a size limit is being imposed on HSPA transfers.

If confirmed the plan would contrast sharply with that for the original iPhone, under which people were able to simply buy an iPhone and take it home, and subsequently sign up for a carrier contract on their own time through iTunes. Apple is said to have become frustrated, however, by the number of people buying iPhones and unlocking them for an unofficial carrier, thus depriving Apple of shared revenue streams.




by MacNN Staff

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  1. das

    Joined: Dec 1969

    +2

    Bad logic

    "Apple is said to have become frustrated, however, by the number of people buying iPhones and unlocking them for an unofficial carrier, thus depriving Apple of shared revenue streams."

    Since Apple is no longer getting shared revenue on the iPhone 3G — just a standard subsidy — this argument no longer holds water.

    What Apple wants to ensure is that customers get a consistent, reliable experience AND use the Apple-provided ecosystem for obtaining applications. After it realized just how big international demand really was, and witnessed a cottage industry doing nothing but unlocking iPhones, it redoubled its international efforts, and that's precisely why you see the number of countries Apple is planning on launching in, in addition to the new efforts to prevent people from walking out with hardware and no contract from the carrier that is subsidizing the phone.

    In other words, how every single other subsidized/locked handset in the US market has always been handled. The only gripe, if any, is that Apple isn't selling an "unlocked" variant of the iPhone. And guess what? They don't have to.

    And everyone is free to decide whether they buy the phone, and what they do with it afterward. You just also have a contract to deal with.

  1. mgpalma

    Joined: Dec 1969

    -3

    I hate that you have to

    buy them 'in store,' but that doesn't change my buying one. It just delays it for a couple of weeks. (yes, I am that busy)

    I can't wait...

  1. das

    Joined: Dec 1969

    +3

    Addendum

    When I said:

    'The only gripe, if any, is that Apple isn't selling an "unlocked" variant of the iPhone. And guess what? They don't have to.'

    ...I should be clear that I am talking about the US market.

  1. Marook

    Joined: Dec 1969

    +2

    And what about Europe?

    Will be interesting to see the price for an unlocked iPhone in France, Denmark and else where were they Have to sell it without contract as well.And also the contract-bound price, since it's only legal to lock people for 6 months here (DK)...

  1. calverson

    Joined: Dec 1969

    -4

    Apple are annoyed?

    "Apple is said to have become frustrated, however, by the number of people buying iPhones and unlocking them for an unofficial carrier, thus depriving Apple of shared revenue streams."

    I have become frustrated due to stupid contract issues, and the fact that they are only released in the States (until the iPhone 3G comes out)

    I think Apple could have avoided this whole thing by making it not locked to a network... e.g. some discount if you sign a new contract with AT&T, otherwise, make it $100 more and get it unlocked.

    Really they would, and will, sell SO MUCH MORE should they do that.

  1. rytc

    Joined: Dec 1969

    +3

    $100 more??

    The contract subsidy for the phone is said to be around $300-400 - so the contract free version would be selling for $500-600 at least.

  1. vasic

    Joined: Dec 1969

    +1

    Exactly, rytc

    Just as the unlocked first-gen iPhone was selling for 500-600 Euros.

    Revenue sharing agreement (and lack thereof with 3G) wasn't the cause of Apple's frustration. Unlocking was. When people were able to walk away with an iPhone for $400, both Apple and AT&T were losing money. Apple could have done the same as with 3G (upfront subsidy, instead of partial spreading of that money over 24 months), and the problem would have continued to exist.

    Mandatory signing of 2-year contract at purchase is the game-changer here. Now, just like all other phones, if you want subsidised price, you have to sign away your soul (at least for the next two years). If you don't want to sign, in many countries, you'll be able to put up all the money upfront, to the tune of $500-700 or so.

    The only people who will unlock a locked (i.e. subsidised) phone will be those who travel and occasionally want to use it with another SIM card.

  1. testudo

    Joined: Dec 1969

    -7

    subsidy


    Since Apple is no longer getting shared revenue on the iPhone 3G — just a standard subsidy — this argument no longer holds water.


    Well, it doesn't, except it is probably the main reason they no longer share revenue. They were losing too much money. So they now get the money all up-front

    The contract subsidy for the phone is said to be around $300-400 - so the contract free version would be selling for $500-600 at least.

    That's just rumor/speculation. The thing is, only Apple and AT&T know how much they're getting. (Note: For those who complain about the lack of affordable call plans for any phone, look no further than understanding everyone pays for the subsidized phones, even if you don't own one).

    And a contract-free phone wouldn't cost "subsidy contract price". They would definitely throw an extra $$$ on top, just to penalize those who don't want to join the subsidy bandwagon.

  1. testudo

    Joined: Dec 1969

    -8

    more bad logic

    What Apple wants to ensure is that customers get a consistent, reliable experience AND use the Apple-provided ecosystem for obtaining applications.

    Wait, they want to ensure a reliable and consistent experience? When did they switch from AT&T??

    But, to your point, Apple wants to kill unlocking because they lose control. And they like control. They want to control everything you can do with the device. And with control means they make sure they get paid. And that what it comes down to it (not that there's anything particularly wrong with that, it's just people always make it sound like Apple's all about 'the experience', not the money).

  1. LouZer

    Joined: Dec 1969

    +1

    itunes

    didn't the original phone require you to connect via itunes at least once before you could use it?

    And probably it will be needed to get the latest software installed.

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