Deutsche Telekom’s mobile unit T-Mobile announced today that it would sell the Apple iPhone without a contract. This was done in order to comply with a court injunction awarded to rival Vodafone by a German court. (See yesterdays post.) In Europe, when a mobile phone is sold that has a lengthy service contract attached to it, the hand set is sold at a discounted price.
T-Mobile will sell an unlocked version of the iPhone for 999 euros, or $1,477. The unlocked phone will be able to use any service provider the consumer wishes. The same phone will sell for 399 euros ($590) if the customer signs a two-year contract with T-Mobile to provide carrier service.
Apple has been trying to protect the iPhone from being unlocked ever since it was released earlier this year in the Untied States. The media has followed attempts by people to unlock the phone to free owners from a lengthy contract with AT&T. Now that an unlocked version is being sold in Europe to comply with a court order, the future of the iPhone’s exclusive carrier contract is in doubt in the United States.
There is no court injunction to keep enterprising Germans from buying unlocked iPhones and selling them to Americans. Unlocked versions of the phone have already been sold on Internet sites. Now a flood of sales may come out of Europe. If buyers are willing to pay extra to keep from signing with AT&T, now there is little to stop them.
It will be interesting to see if T-Mobile’s unsubsidized price of 999 euros will be challenged or not. This is over twice the asking price for the subsidized price of 399 euros. It is conceivable that a rival company will argue that the unlocked price is set too high, and is an attempt to get around the court injunction.
All this is taking place just before Apple is scheduled to open the Asian market to the iPhone. Laws are different there but Apple can’t be happy with the German court. Now that the iPhone lock has been picked by legal means, it will be harder to keep it locked in other markets. It will be interesting to see if the exclusivity of the iPhone remains, or if the whole thing unravels from European legal rumblings.