The media seems to like the idea of unlocking the software on the iPhone to allow unsupervised changes to the installed applications and operating environment, but is this really a good thing? And is it time for users to start paying full price for unlocked devices?
I can’t help but notice the knee-jerk positive reaction to open gardens, unlocking mobile device software — or in the case of the iPhone, the more inflammatory jailbreak. It’s a sort of willy-nilly acceptance that technical people are just really playful…and they want to be free.
Fine. I have a solution. Let’s allow these people to pay for an unlocked handset without the subsidy.
Because this is the one thing I never see mentioned. That carriers (such as AT&T in the case of the iPhone) are footing the bill for some very expensive devices and are financing these devices over the course of a two year contract. For example, Apple sells the iPhone at an Average Selling Price (ASP) of $595. AT&T charges $199 and $299 for the iPhone 4 models, so let’s say that their ASP for an iPhone is $225 (skewing towards the lower-priced 16 GB model). This means an average subsidy of $370. At 0% interest, and over 24 months, this subsidy will cost $15.42 a month.
In other words, when AT&T sells a million iPhone 4 devices, they’re financing somewhere around $370 million worth of handsets. These are big numbers. And they don’t even begin to address the cost of wireless licenses, network build outs, and so on and so forth.
Now I don’t mean to cry poor for AT&T. This is far from the case. But in any policy discussion, we should be talking about both sides of the issue. And the handset subsidy is frequently omitted from the discussion.
As I know the term, jailbreaks aren’t good things. Perhaps it’s time for the technology press to start thinking about the downsides of jailbreaking in the context of the handset subsidy that has put so many iPhones, Blackberries and other devices into our hands over the years.