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China fact of the day
It's not quite a fact, but here goes:
According to China Mobile, there were already 400,000 cracked iPhones using its cellular network by the end of 2007. That number, if accurate, is astonishing. It would mean that there are more unauthorized iPhones in China than there are authorized iPhones in Europe. It would account for the largest part of the so-called “missing” iPhones.
It's a fact if you believe China Mobile, which I do.
Posted by Tyler Cowen on February 16, 2008 at 12:55 PM in Data Source | Permalink
Comments
Additional information on the iPhone distribution methods and software in china can be found here if interested:
http://www.thedarkvisitor.com/?p=328
Posted by: yoshi at Feb 16, 2008 1:09:14 PM
I find this very similar to Sony's attempt to crack down on hacking of the Playstation Portable video game system. Both companies want to maintain full, rigid control of their product, despite clear desire on the part of users to customize and improve it as they see fit. In both cases, the company tries to lock out people with frequent system updates. The difference is that apple should be releasing a software development kit soon for the iPhone.
I really think they should try to harness the energy that people have to enhance the product at no cost to the company. I don't see why they can't allow, say, 3rd party games to run on the phone, since that's one major weakpoint.
Posted by: Erik at Feb 16, 2008 1:48:51 PM
erik...I submit that apple's primarily responding to at&t (and other carriers') fears/lost revenue streams. The ease with which people crack all of the new firmwares seems to say to me that it's a token resistance.
Posted by: shawn at Feb 16, 2008 6:18:15 PM
I was in Hong Kong in December. I saw a ton of iPhones for sale there even though it has technically not been released there nor do they have a partner for the cell network.
Posted by: Gary at Feb 16, 2008 6:54:25 PM
Shawn--
Apple is not just responding to other carrier's lost revenue fears. Apple receives an estimated $18/month (http://bits.blogs.nytimes.com/2007/10/25/the-831-iphone/) from ATT for every active iPhone. Considering that there are zero costs associated with that money, Apple is definitely putting up more than token resistance. Reading the ease with which the software has been cracked as a sign of Apple indifference I think ignores the fact that no corporation has ever successfully implemented a anti cracking/piracy piece of software without it soon falling to worldwide hacking efforts.
Posted by: Van at Feb 16, 2008 9:56:06 PM
There seems top be a common thread btw. this posting and Tyler's posting on armed robbery vs. fraud and the theft of office supplies. That is, although consumers in China (and Hong Kong) are not stealing iphones per se, they are not subscribing to the authorized phone service with ATT. But aside from the shareholders of ATT, who cares? Where is the deadweight loss or 'social cost' here? On the contrary, by promoting the sale of more iphones, one could argue that this behavior produces large social gains.
Posted by: enrique at Feb 16, 2008 10:11:02 PM
Does anyone know whatever happened to the person that hacked the iPhone and put the video up on YouTube? I know ATT came out against the person but was curious to know the remainder of that story.
I'm simply amazed how quickly things proliferate in China simply by the sheer population volume and the velocity of sales in big metro areas.
Posted by: Dr. Housing Bubble at Feb 17, 2008 3:21:58 AM
Does anyone know whatever happened to the person that hacked the iPhone and put the video up on YouTube? I know ATT came out against the person but was curious to know the remainder of that story.
I'm simply amazed how quickly things proliferate in China simply by the sheer population volume and the velocity of sales in big metro areas.
Posted by: Dr. Housing Bubble at Feb 17, 2008 3:22:17 AM
Van:
I believe that Apple provides free software updates to iPhone users — it isn't exactly zero cost.
Posted by: Michael at Feb 17, 2008 1:41:57 PM
van; you're right...they get <18/mo ($0/mo, actually) if someone's using that iphone on a non-approved carrier.
however, they get $0 period if nobody buys it (as in, if it's restricted), so they're not that worried about it being bought and used off-approved-network.
as far as apple's concerned, they'd like everyone to have an iphone (and be a part of the apple ecosystem), even if you're not using it on a revenue-generating carrier.
Posted by: shawn at Feb 18, 2008 5:38:31 PM
Everybody needs to quit worrying about what apple is doing in china. So what if they have 400,000 illegal phones operating. If there are so many "missing i phones" all it means to me is protect my own phone and don't let somebody steal it. Sucks for all those people with cracked i phones but it really isn't my concern. If somebody is so worried about their information being hacked into maybe that person doesn't need an electronic device in their pocket that can be hacked into by a stranger. Sounds like something all you geeks should let apple or soney handle.
Posted by: fletcher King at Feb 19, 2008 12:27:00 PM
http://bits.blogs.nytimes.com/2007/10/25/the-831-iphone/
Actually, Apple makes $831 per iphone per year--if activated on the ATT network. So cracked phones do cost them something if they are selling them at a loss. If they are not selling them at a loss, then why would they care that a buyer who never intended to activate it on ATT bought one?
Posted by: Nick K. at Feb 20, 2008 2:22:49 PM
