[jdb8167]

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[...]hopefully Apple's move was going to change the industry and give consumers more choice. I pointed out that Apple's move actually gave us less choice, since it is reinforcing a business model where consumers are limited to specific carriers for specific phones. No, it isn't Apple's responsibility to change the business model, but while they did "Think Different" in their approach to the carriers, they certainly didn't do so in a way that benefited consumers.

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Here is what I think Apple's long term plan entails. First, keep in mind that Apple and SJ believe that the iPhone is truly unique and has at least a 5 year headstart over their competition.
Apple has a 5 year exclusive arrangement with AT&T in the US. They are setting up similar deals in Europe. This exclusivity means that AT&T's competitors are completely locked out from the iPhone market. Now if you believe that the iPhone is uniquely desirable, this is going to put a serious hurt on Verizon and Sprint (less on T-Mobile because I think Apple won't be able to really stop the unlocking). What happens to Verizon and Sprint if they see much of the high-end sales of phones going to AT&T and the iPhone? Again, this is assuming that Steve Jobs is correct and no real iPhone competitor appears from Moto or Nokia etc.
After 5 years, Verizon's shareholders and customers are screaming to get iPhones on their network. Apple can now dictate terms. And they can do the same to AT&T because everyone is now willing to concede to Apple to get access to the phone.
All of this is predicated on the first two ideas. The iPhone is uniquely desirable (especially in the consumer space) and Apple's competitors are so far behind that they can literally never catch up. If this is true, in 5 years Apple can dictate to the broken US mobile phone market and force reform.

[jdb8167]

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Are you sure? A friend of mine has Cricket here in Albuquerque, and I am positive she had to put a SIM chip in the phone... if not I guess I am screwed for Cricket.

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Yes. You can find the details of the network by clicking on any phone that they have for sale and looking at the features. Under Wireless Network Capability you will find either "dual mode" or "tri mode". Dual mode is CDMA digital and Tri Mode adds an old fashioned Analog (AMPS) cell phone radio.
Moto KRZR
Wireless Network Capability
Technology CDMA 800/1900
Mode Dual Mode - digital
Technology CDMA 800/1900
Nokia 6275i
Wireless Network Capability
Technology CDMA 800/1900 & 800 analog
Mode Tri Mode

[rjwill246]

In any case, ATT's lawyers have called a halt to this weekend's unlocking possibilities-- they are on hold for now until the legalities are sorted out.

[nmpike]

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Are you sure? A friend of mine has Cricket here in Albuquerque, and I am positive she had to put a SIM chip in the phone... if not I guess I am screwed for Cricket.

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Yes. You can find the details of the network by clicking on any phone that they have for sale and looking at the features. Under Wireless Network Capability you will find either "dual mode" or "tri mode". Dual mode is CDMA digital and Tri Mode adds an old fashioned Analog (AMPS) cell phone radio.
Moto KRZR
Wireless Network Capability
Technology CDMA 800/1900
Mode Dual Mode - digital
Technology CDMA 800/1900
Nokia 6275i
Wireless Network Capability
Technology CDMA 800/1900 & 800 analog
Mode Tri Mode

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DAMN IT! DAMN!

[Terrin]

I am not sure I agree with you that Apple structured the contract to benefit itself at the expense of consumers. First, we haven't seen the contract. However, we do know that Apple likes to control its customer's user experience. This is typical Apple. To maintain this tradition, Apple struck a unique deal in the cell phone industry. In turn, it had to give AT&T exclusivity for five years. People complain that Apple went with one carrier, but to do what APple likes to do, that is the only way that was going to work (at least initially).
There are rumors that Apple is getting a kickback on the monthly fee AT&T charges consumers, and people claim Apple really struck a good deal there implying Apple is really cleaning up at consumers expenses. Perhaps, but the money is not free money. Unlike with most other phones companies (e.g. Motorola), Apple is the company that actually has to provide support services for the phone. Normally, the cell provider provides this support. As such, Apple deserves a cut of the monthly fee because this is a service AT&T doesn't have to perform that it normally does. Moreover, Apple will continue to enhance the phone for current users, which costs money.
I also think Apple is in a very unique situation. Besides Blackberry it is one of the few companies that control the OS that it uses on the hardware. Everybody else I can think of relies on Windows, Symbian, Java, Palm, etc. This puts Apple is very unique position. Unlike most other companies, Apple can design tight integration between the OS and phone. Unlike any other company, Apple can choose what features will be used without carrier interference, and the over all user experience. Apple also has tons of software already developed that it can tightly integrate into its phone products.
Moreover, throughout history it is worth noting the best ideas usually come from newcomers. As such, I find it a plus that Apple has not been making phones forever.
With all that said, I still am glad people are unlocking the iPhone, as I cannot stand whoever it is now who controls AT&T. Apple made a deal that it had to make to remain Apple, but not one I plan to suffer through.

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Here is what I think Apple's long term plan entails. First, keep in mind that Apple and SJ believe that the iPhone is truly unique and has at least a 5 year headstart over their competition.
What happens to Verizon and Sprint if they see much of the high-end sales of phones going to AT&T and the iPhone? Again, this is assuming that Steve Jobs is correct and no real iPhone competitor appears from Moto or Nokia etc.
After 5 years, Verizon's shareholders and customers are screaming to get iPhones on their network. Apple can now dictate terms. And they can do the same to AT&T because everyone is now willing to concede to Apple to get access to the phone.
All of this is predicated on the first two ideas. The iPhone is uniquely desirable (especially in the consumer space) and Apple's competitors are so far behind that they can literally never catch up. If this is true, in 5 years Apple can dictate to the broken US mobile phone market and force reform.

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That's a bit farfetched.
First, the "5 years ahead" bit is a stretch. It's been discussed through and through, but the main advantage is in the UI, which undoubtedly others will rethink in future builds. Certainly there will be improvements to the iPhone over the next five years, but there will be improvements to everyone else's devices as well. Certain future improvements to the iPhone (such as 3G, better camera, GPS) will be just as much "catch-up" on Apple's part. Comparisons to iPod are unwarranted, since the iPod was released when the digital music market was in its infancy. The mobile phone industry is well-established, with a lot of very large, but fast-moving players.
Also, even if your prediction does prove true, how does that benefit consumers? Apple has structured the contract to benefit itself, not the consumer. Between the consumer and AT&T, they are getting $700-800 for each iPhone, plus 10% of future revenue (at least $6 per month for 2 years). If it's a long-term hit and they have a stronger position in 2012, they will just make it even more favorable to themselves, the way Microsoft made Windows and Office contracts increasingly more favorable to itself as they grabbed market share.
Also, for all we know, Nokia and all the other handset manufacturers will now start looking for sweetheart deals on their high-end phones as well, now that Apple has shown it can be done. Apple won't be the only one putting out hot phones over the next 5 years.

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[Macdev8]

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" Good bye $300 per month phone bills! "
What's the math?
There's no math. Just the mindless rants of the clueless. And this iPhone hack business is a non-story, interesting only to nerds who live in their parents basements. This sort of thing never, ever goes anywhere on a large scale. It's mostly for bragging rights. Unlocking the iPhone will not results in millions of additional sales to people yearning to be free of the yoke of the evil entities known as Apple and at&t. It's quite hilarious actually, how this story has grown legs.

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My thoughts exactly. I just wanted to see how he added the zeros.

[horvatic]

Except AT&T's lawyers are now knocking at there door. They are not going to sell anything, it's illegal.

[jdb8167]

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There's really no reason Apple couldn't have maintained tight control over the OS while opening it up to multiple carriers.

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You can repeat this as many times as you like but without evidence I will assume that Apple had little choice. If you think that the features of a Blackberry on AT&T, Verizon and T-Mobile are the same, you are not paying attention. There has been a bit of controversy over the new Blackberry on AT&T for example--where the GPS has been severely restricted. Many are blaming the Apple deal although it could also just be a revenue grab by AT&T. But if what you say is true and RIM has control of the user experience, why would they voluntarily disable a differentiating feature from their newest phone unless AT&T could force it on them.
AT&T neuters the BlackBerry 8820 in favor of the iPhone
Verizon is famous for locking down their phones and disabling features. Just because a relatively unpopular phone can be bought "unlocked" on the gray market does not mean that Apple can do the same thing. They are much too prominent and a company like Verizon would pull all the stops to block the iPhone if it was released for Verizon's network without permission.
I constantly hear how Apple could have just magically opened up the tightly controlled US mobile phone industry but I never see any evidence that it is true--just speculation. The evidence that I see all around me is that mobile phone manufacturers are at the mercy of the carriers. They never control the user experience because the carriers want that control for themselves. I await evidence that Apple could have released a iPhone for Verizon and Sprint that they could sell in the Apple store and have work without technical and legal issues from the carriers. Until then, I'm going to keep assuming that Apple is trying to fix a broken market.

[IVIIVIi4ck3y27]

If anyone opens up the cell industry it will be Google and not Apple. Apple will leverage the path if Google opens the door... but that's all a matter of whether or not Google wins the FCC bid. I honestly hope they do.

[jdb8167]

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[...]they easily could have put out an unlocked GSM phone that worked on both AT&T and T-Mobile and contracted with a third party for visual voicemail (since GSM makes call re-direction very easy and carriers can't remove that ability without losing their right to call their networks GSM).

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I believe that you are correct on this point but what does Apple gain by doing this? It isn't like having a second GSM carrier is going to make a substantial difference in sales. By working with AT&T exclusively, they get the subsidy. Basically they make more money than they would by also allowing T-Mobile to use the iPhone on their network.
Apple is a business. They like to change the world but they do that because it ultimately makes them more money. Apple could have accomodated those who wanted T-Mobile but it would have cost them money and it wouldn't have furthered their plans in any what that I can figure out. I'm sure the deal with AT&T was an easy decision once they were locked out of Verizon.