Feb 17 2008

Where have all the iPhones gone?

China Mobile: 400,000 Unlocked iPhones On Our Network (AAPL) – Silicon Alley Insider

Here’s a shocker… although not so surprising if you’ve ridden a Shanghai subway lately and seen the city’s movers and shakers fiddling with their fancy new iPhones:

China Mobile, the biggest wireless carrier in China, said there were 400,000 unlocked iPhones operating on its network at the end of 2007.If true, that represents more than 10% of the 3.7 million iPhones Apple sold last year. Market research firm In-Stat, which included the stat in an email newsletter today, said that total was four times what they had previously estimated. That helps explain where many of the “missing” iPhones have wound up.

This may seem like great news for Apple; I mean, who wouldn’t want to tap the largest cell phone market in the world? Problem is, Apple does not have a deal with either of China’s big mobile carriers, so Apple doesn’t get a cut out of users’ service plans, which account for a huge part of Apples profits in Europe and the US.

Some analysts estimate that AT&T, Apple’s exclusive U.S. carrier partner, pays Apple $15 per month, per iPhone subscriber — $360 over the length of a 2-year contract — which is pure profit.

So I wonder if the real iPhones in China outnumber the fake ones now!?

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About the author:  Jason Welker teaches International Baccalaureate and Advanced Placement Economics at Zurich International School in Switzerland. In addition to publishing various online resources for economics students and teachers, Jason developed the online version of the Economics course for the IB and is has authored two Economics textbooks: Pearson Baccalaureate’s Economics for the IB Diploma and REA’s AP Macroeconomics Crash Course. Jason is a native of the Pacific Northwest of the United States, and is a passionate adventurer, who considers himself a skier / mountain biker who teaches Economics in his free time. He and his wife keep a ski chalet in the mountains of Northern Idaho, which now that they live in the Swiss Alps gets far too little use. Read more posts by this author

2 responses so far

2 Responses to “Where have all the iPhones gone?”

  1. MRJohnsonon 21 Feb 2008 at 12:39 pm

    This sounds like a big financial hit for Apple; although an exclusive deal like the one between Apple and AT&T in the U.S. seems to be a bit like a monopoly in the first place, so perhaps that is in a way being balanced out now in the global market….

  2. Trevor Sunon 02 Mar 2008 at 10:46 pm

    @_@ thats a lot of iPhones unlocked, too bad for apple missing out on all the action here in china