Unlocked iPhone market in shades of gray

iPhone serving Apple better than AT&T

Apple seems to have a growing problem on its hands – the size of which it may have grossly underestimated. According to last week’s earnings calls, Apple claims to have sold 3.7 million iPhone activations, whereas AT&T reports only 2 million. The 1.7 million discrepancy indicates that at least 1 million iPhones were unlocked, a number accounting for as much as one quarter of the company’s total iPhone sales to date.

Wirelessimports.com is one such company responsible for perpetuating the incongruity. The gray-market dealer sells both an unlocking solution for $179 or the unlocked version of the 8-gigabyte iPhone, advertised on its Web site for $599, the original price of the phone at launch time. Internationally, the company is selling between 500 and 1,000 unlocked iPhones per month, according to senior sales associated Shawn Zade.

Zade said the estimated 1.7 million unlocked iPhones should actually include anywhere between 250,000 and 500,00 more, made up of current AT&T customers who unlocked their phones to travel overseas or those former AT&T users who have since left or simply unlocked the phone for the sake of having access to another provider’s network. Even as Apple has attempted to make the lives of unlocking experts harder with new software updates and unlocking “blockers,” estimates have iPhone unlocks at about the same during the third and fourth quarter of last year.

Despite common misconceptions, unlocking the iPhone, or any wireless handset for that matter, is not illegal. Under an exception to the Digital Millennium Copyright Act passed in 2006, cell phone firmware that ties a phone to a specific wireless network is exempt from coverage for three years.

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