The “Break it Down” Blog

We have covered it here before that Apple got the long… really-long end of the stick when they partnered up with AT&T for the iPhone 1. Not only were they getting full price for their devices on each sale, but also a portion of the service contract, while AT&T got the rest.

It seems that with the release of the 3G iPhone however, AT&T is slamming their foot down and saying “no more, we do it our way now“.

One of the biggest, and saddest changes, is that to crack down on unlockers purchasing the iPhone, walking out of the store, JailBreaking it and then booting it up on competing networks, AT&T and other iPhone partner cell companies are requiring that people sign the 2-year contract in-store before they get their hands on the device. AT&T is also saying that folks with the 3G iPhone are now going to be signing up for the classic AT&T voice and data plans; no more special treatment for iPhone users on the AT&T network.

I can’t say I’m surprised at this, a few months ago (maybe 6?) I read that 4 million iPhones had been sold… and 1 million of them were unlocked and running on competitive networks (e.g. T-Mobile). That is 1 million, $60-90/mo cell phone and data contracts that AT&T is missing out on every month; that is a serious chunk of change and would draw my ire as well if I were AT&T. Even thought they may be pressuring Apple to “solve the problem”, it’s in Apple’s best interest to sell as many phones as possible to anyone they can… this isn’t really a problem they want to solve completely (a lot like credit card companies solving the identity theft issue).

Looks like the hay-day of affordable super-smart-phones is getting replaced by classic “rape you in the face” billing by AT&T.

Se la vi!

C’est la vie! (Thanks Neil!)