Missing iPhones – Not that big a deal

Published by • January 30th, 2008 RSS News Feed

You can thank the lack of ‘real’ news for the onslaught of articles that seem to be laser focused on the mysterious case of the missing iPhones. Add this article to the list.

This is the basic problem: Apple announced at Macworld they they’ve sold 4 million iphones while AT&T announced that they’ve only activated around 3 million iPhones. This has caused pundits to go stir-crazy, with some predicting dire financial repercussions for Apple. Oh the humanity!

Where are the iPhones?

That’s the 1 million dollar question. Are they in inventory? Have they been unlocked in the USA? Or have they been unlocked and sold in the back alleys of Hong Kong? Are they in King Tut’s tomb? There are two facts we can take away from all of this hoopla.

  1. There IS a significant discrepancy between Apple’s numbers and AT&T’s; and
  2. this whole story is completely overblown.

For starters, Apple is still making significant margins on each iPhone sold. An unlocked iphone, however, doesn’t provide Apple with a monthly revenue stream from AT&T. That said, a significant number of the unlocked iphones are rumored to be overseas in countries that don’t yet sell iphones, in which case Apple is not currently missing out on any revenue that they could potentially be earning from AT&T. If the missing iphones are affecting anyone, it’s AT&T, not Apple.

Furthermore, it speaks to the desirability of the iPhone that people are willing to pay big money for a

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phone that’s not even out in the market where they reside. And not only that, but they are willing to purchase a phone with no warranty, no support, and the knowledge that their unlocked iPhone might be made unworkable by future software updates from Apple. And on top of that, users are paying a premium for these unlocked iphones. Someone has to be making a profit after all.

Again, many of the iPhones seem to be thriving in overseas markets where Apple has yet to strike deals with wireless providers. If anything, iPhone sales in these countries can be seen as a temporary bonus for Apple’s bottom line. So yes, the iPhones are missing because people want them so damn much they’re willing to pay extra for an unlocked version. Not that bad a problem to have, all things considered.

Itola Author

is a business / tax attorney from the windy city. Yoni is also a gadget enthusiast who enjoys writing in the third person.
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