I think not. Apple, Google and others in time, will act to democratise the cellular business. In the same way that I can choose from a variety of landline service providers for the home phones (of any make) that I use; in time, all mobile phones will be useable across any mobile network. Why should the customer be restricted in moving freely from one provider to another? It is a restrictive practice that must end, sooner or later. Network survival will then depend on free market forces alone and not depend on holding users captive by means of annual plans with penalties for early cancellation. Why simply give in to the demands of providers' plans? It is for the customer to have the freedoms of choice and not for the provider to restrict those choices. Somehow we have all been tricked into accepting these practices as if they are OK, when they manipulate us and restrict our freedom to get what we want. I hope that Apple will use its 20+billion $ to set up its own networks so that they can democratise this market but also as a second launch pad for their own global cloud computing platform.

"If it alienates its carrier partners by undercutting their ability to make money on the product..."

This not the threat you're looking for, Luke.

How does a historic and revolutionary product with great profit margins and very sticky user experience ever undercut profitability?

The iPhone is going to sell over 30M in the next 12 months and, since its user experience will be unmatched for the next 3 years, at least, which carrier will choose to have '1st mover' advantage in DISCONTINUING it?

Threat feared. Threat poofed.

I believe not too long ago, some in Nokia have scoffed at Apple for the idea of them getting into the mobile phone business because of these technical issues. I have to give Apple credit where credit is due, and that's not only penetrate an already saturated market, but to also do so with a highly successful product that immediately became a trend-setter. (Which is kind of a shame personally, because I love regular thumb keyboards a la Blackberry.)

In any case, it seems that Apple's solution is to handle this on a region-by-region basis. I don't have any details as to why they've chosen to sell unlocked in Hong Kong, but for now, I can only assume that they've studied the market and have decided that it is the best course of action to take within that regional market....

I wonder why Apple unlocked the iPhone in Hong Kong.

Environmentally, Hong Kong is not used to locked phones. My father's Touch Diamond is subsided under contract, a rare exception to the norm, but it is still unlocked. Though we are only 8 million people, we also have as many carriers in the United States, maybe more. People switch more often. People travel outside Hong Kong more often, because we are such a small place. Even travel to the mainland means a new SIM card.

More importantly, people buy phones from electronic STORES, not carriers as it is in the US. Sure, the carriers sell phones, but really have much less power than they do it the United States. All carriers have to sell the complete line of phones, because people expect that of them. People don't go to CSL in HK and choose one from what they have; they choose a model and look for where to buy that.