Dial 0 For Opinion: Apple making inevitable move

When Apple first launched the iPhone (review) the biggest news, aside from the device itself, was the peculiar agreement they had with AT&T, the exlusive carrier. The agreement shared subscriber revenues from AT&T to Apple and did not include a discounted price for the iPhone even though customers had to sign up for at two-year contract agreement. At the time we criticized this deal for several reasons. From the consumer perspective you no longer received any benefit for signing your life away to a wireless carrier for two-years. Traditionally consumers would get a discount of anywhere from $50 to a couple of hundred dollars for signing such an agreement. Locking the iPhone to AT&T also reduced consumer choice in terms of carriers. We also though the deal was bad for Apple, however, because tying yourself to a single carrier meant that you limited the possible universe of buyers. Many consumers are either stuck in a contract with their carrier or like their carriers prices or service and wouldn't consider moving to AT&T. We also predicted that if Apple attempted to strike such deals with overseas carriers they would run into problems.

Just under a year later it looks like Apple is realizing the error of their ways. Recent rumors have indicated that they will be releasing unlocked versions of the iPhone in several new markets, including Italy and Belguim. They will be signing more traditional carrier agreements where a single carrier receives exclusivity over the handset for a short period of time, usually months, and then the handset is made available via other carriers and as an unlocked device. It looks like Apple may even be open to carriers subsidizing the iPhone, with recent price drops in markets like Germany and the UK. We hope that this ushers in a new era of unlocked iPhones. The great thing about GSM devices is that you should be able to take your device and use it with any GSM provider worldwide. Apple's business model with AT&T contravened that opportunity. If these rumors are true unlocked and subsidized iPhones may become standard worldwide. We can then only hope that an unlocked version makes it to the U.S. so consumers here can stop using various unlocking schemes to use their iPhones with the carrier they want.