Why Apple Does Not Want the iPhone Unlocked and What It Means for Us

Apple locking down the iPhone exclusively to AT&T means a lot of things for us as consumers and a lot of things for Apple. While it is a smart move on Apple’s part, there still are some very serious side effects that will have wireless providers crying themselves to sleep should the iPhone gain dominance. It will bring forth a new era in the world of cell phones.

Integration, Mobilization, Simplification
Keep in mind I will be focusing on the U.S. a lot here, as I’m not too familiar with Europe’s Cellular Providers.

We are no stranger to Apple locking down products to work within a predefined selection of devices. It happened with the iPod & iTunes, Macs & OS X, and now the iPhone & AT&T. We do get some benefits from this: knowing that Apple products will work seamlessly with other Apple products and integrate themselves across the company’s product range. However, this is nothing more than a side effect of Apple wanting to make money off of their closed ecosystem of products.

It’s a good way to bolster Apple’s success because consumers will want to buy products that work exclusively with their Macs, iPods, and iPhones. Other manufacturers attempt the same thing, making their products work well or better together.

This time it’s totally different; previously Apple controlled the entire platform and the existing additions. Now they only control one part of the equation; they provide the device and AT&T provides the network. Apple does not own AT&T and the tactics they employed to get a carrier have upset others, creating an image of greed when it comes to Apple.

The thing is, though, we get an enhanced level of integration with AT&T, such as Visual Voicemail and cheaper data plans, but it ends there. This doesn’t mean that this could’ve been the case with other carriers and is a weak argument that won’t hold up. This is the equivalent of choosing which power adapter your Mac can use and where it can be charged; the iPhone functions are currently tethered to a contract and cannot be used without one, so equating a Mac’s supply of power is a valid comparison.

AT&T isn’t the only GSM provider, but it was the only provider to accept Apple’s seemingly outrageous proposal. Who in their right mind would upgrade their entire network to accommodate one phone from a company who knows nothing about the wireless world? Perhaps AT&T is seeing a lot of potential and that the positives far outweigh the negatives.

But the lock down was important to Apple for one reason: to track iPhone users. No, I don’t mean track as in where you are and what you’re doing, but by tracking which provider you use for your iPhone. Apple is supposedly getting a cut from AT&T every month, not only from iPhone sales but from monthly payments. While it is an analyst’s guess, I do believe it’s credible for a few reasons, one of them being Software Updates; Apple needs to pay the developers somehow, but it would be a fraction of the monthly AT&T sum.

Do you think Apple would want an iPhone running rampant on T-Mobile’s network if they haven’t met their demands? No, it means a loss of income from that user and it means Apple loses the exclusivity with AT&T.

The Benefits (?)
However, there are some benefits to this monopolistic-like role Apple is employing, but these positive points could easily be shattered by the decisions of a few CEOs.

The main benefits to getting a closed deal like Apple did with AT&T are improvements and stability, but here is the real kicker: no other cell phone manufacturers would be able to take advantage of this. Carriers can’t decide to carry the iPhone and attempt to be a competitor. This is a situation where you have to have the iPhone, and carrying it would be extremely beneficial but it would require a lot of changes.

If it wasn’t for the iPhone we probably wouldn’t have faster EDGE speeds or anything close to Visual Voicemail. Should a new carrier, after the 5-year exclusivity ends, pick up the iPhone, Apple would most likely force them to improve their network, both data and calling, which is beneficial to even non-iPhone owners.

The other benefit is cell phone manufacturers now have 5 years to inspect the competition and learn from the iPhone. They should consider integrating themselves more and more into different networks in order to create an appeal and brand themselves amongst consumers.