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Apple (AAPL) and AT&T (T) voiding warranties on modified iPhones

AT&T, Inc. (NYSE: T) is about to step into a 'vocal minority' land mine when it comes to interacting with customers using that expensive Apple, Inc. (NASDAQ: AAPL) iPhone on its network. Let's put it this way: if you're a techno-tinkerer and have modified the software on that iPhone but need to bring it to AT&T (which probably sends it to Apple) or an Apple store for service, prepare to be disappointed: you may be turned away forever, even if your unit is under warranty.

This situation sounds like a legal pickle of pretty big proportions. Apple iPhone purchasers "buy" an iPhone and are free to do whatever they want with it -- by law, right? The problem seems to arise when iPhone owners change the software on their phone, specifically using a "hack" to make the iPhone usable on wireless carriers other than AT&T, among other things.

Does "modifying software" equate to an instant voided warranty? If so, the allure of the iPhone to techno-geeks and others who want to use it how they want it (not how AT&T and Apple want them too) may be causing some issues soon if iPhones start needing factory service. That is, unless that modification caused the problem in the first place. This is probably going to be the standard tactic AT&T and Apple will both hide behind.The iPhone's U.S. distribution deal is unique, as the now-$400 cost of the iPhone may not represent the true price of the device. U.S. iPhone users are supposed to be 'locked-in' to a two-year commitment with AT&T at a minimum of $60 per month. Apple gets a cut of that from AT&T, which suggests Apple is actually subsidizing some of the cost of the iPhone or is exerting its revenue greed over AT&T since that wireless carrier has a five-year exclusive on the iPhone.

From all the details so far, it is probably Apple behind this "voiding warranty" issue with modified iPhones, but with AT&T being a customer interface as well, it'll be dragged onto the field. Who will respond to this growing problem? We'll shortly know, since AT&T, so far, has no comment. And Apple? It's being very mum on this as well.

Regardless, the iPhone will continued to be chopped up (virtually, that is) to give customers the freedom to use the device as they want, with whomever they want (currently, T-Mobile in the U.S.). At the same time, both Apple and AT&T will grind their teeth, and will be shunning their noses at customers who paid for a warranty as part of a phone cost, but who will receive no service should the need arise as a result of iPhone modifications.

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Last updated: September 06, 2008: 08:10 PM

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