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Original Apple iPhone seeing huge demand

When Apple, Inc. (NASDAQ: AAPL) released the iPhone 3G back in July, little did it know (most likely) that the device would have issues worldwide connecting to 3G networks, causing consumer frustration on a level we've rarely seen with any Apple product. Well, some consumers have apparently given up and they're moving back to the older, slower, original iPhone, which is causing a cottage industry to spring up around the older device.

NextWorth.com is charging $200 to $300 for a used iPhone (the non-3G kind), which is more than the price of the newer, sleeker and faster iPhone 3G. Why? There's demand -- and lots of it. Some customers don't want to be shackled to AT&T, Inc. (NYSE: T), the exclusive carrier for the iPhone and iPhone 3G in the U.S., as the original iPhone can be unlocked very easily using software tools found all over the internet. Once unlocked, the original iPhone can be used at any WiFi hotspot. There are no 3G connectivity issues either.

Does Apple have a problem now that the older, discontinued iPhone is still in hot demand? No. People using iPhones, new or old, reinforces the brand among other things, and Apple still made the original sale after all. If there is any loser here, it's AT&T. The largest wireless carrier in the U.S. still has the smallest nationwide 3G wireless network compared to its competitors. Launching a product with the magnitude of the iPhone 3G was just asking for problems given AT&T's network, and some informed customers don't want AT&T at all.

Apple's iTunes unlocks iPhones in Germany

In tech circles, the unlocking of the Apple, Inc. (NASDAQ: AAPL) iPhone has been a constant challenge since the cellphone/iPod combo was released at the end of June. Apple's stronghold over the iPhone meant that, officially, the unit could not be used in the U.S. with any other wireless company outside of AT&T, Inc. (NYSE: T).

That all changed recently when T-Mobile Germany said it would sell unlocked iPhones in Europe, which could then then be used with any GSM wireless carrier in the world.

Well, if you're a U.S.-based customer who has been seething with anticipation over buying an iPhone but frowning at the prospect of signing a lengthy two-year contract with AT&T, you'll be glad to know that Apple's own iTunes software can unlock your iPhone in a few seconds -- provided it was purchased at a T-Mobile Germany outlet. The cost: a touch under $1,500.

Is this good for Apple? The company sells the iPhone in the U.S. for $399, but gets a chunk back every month from the two-year subscriber agreement with AT&T. In overseas markets, where wireless phones are almost always sold unlocked and the competitive environment is much more consumer-friendly than in the U.S., Apple appears to be warming to what consumers want instead of what wireless carriers require. With a $1,500 iPhone cost (which is what T-Mobile Germany charges for an unlocked iPhone), it's getting a cut equivalent to 24 monthly paybacks from a wireless partner and probably more. Apple wins the revenue battle any way you slice it. Well, officially anyway.

Apple's (AAPL) hacked iPhones turning to iBricks -- why would Apple do this?

OK Apple fans -- I've rolled up my sleeve and I'm ready, let's have it -- defend your Apple now and attack me. I know you will. And you know what? The funniest thing is that Apple Inc. (NASDAQ: AAPL) is really fighting you, the die-hard fans. After all, it is the fans who could not live without an Apple product -- the iPhone -- and went and bought it despite not being an AT&T (NYSE: T) fan (much less a customer). It is those fans who bought the iPhone, worked hard to modify it so it would work with another carrier, but were left out to dry in the latest Apple software update with non-operational iPhones. Apple has launched an attack against its own fans, but for some reason they may still be mad at me for pointing it out, rather than at Apple.

Interestingly, the law, according to lawyers, actually supports Apple and "it seems abundantly clear that Apple is entirely within its right to refuse warranty service on unlocked iPhones." I wonder, though, if its within its right to purposely render them useless, as many think it has.

Continue reading Apple's (AAPL) hacked iPhones turning to iBricks -- why would Apple do this?

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Last updated: November 10, 2009: 01:52 PM

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