14 DAY TRIAL // Yep, the figures seem pretty darn correct. Even Apple is aware of the situation and doesn't like it one bit. But how could anyone determine the amount of hacked iPhones floating around the market? Easy - by subtraction.
AT&T revealed that around two million iPhone owners were using its network, in a report towards the end of 2007. Apple, on the other hand, said it sold 3.75 million iPhones over the same period. So, where do the rest of the phones go?
To territories where the iPhone isn't available, of course. These figures couldn't just have gone unnoticed, so Bernstein Research analyst Toni Sacconaghi issued a research note on the matter. Digging deeper, he was able to "pump out fresh figures [...] that include information gained from talking to channel partners and other sources," according to theregister.co.uk.
"We now believe that 315K iPhones were sold in Europe (down modestly from our previous estimate), leaving 1.45M iPhone units missing in action - either sitting in channel inventory or being used 'unlocked'," Sacconaghi wrote in his report.
Some of you may know this and some of you may don't, but the reality is that even though Apple sells as many iPhones as possible, the company still doesn't get as much profit as possible, as long as people buy iPhones to unlock them. Why?
Well, as it turns out, Apple receives between $300 and $400 in carrier payments for each unit sold. Hacked iPhones generate 50 per cent less revenue and up to 75 per cent less profit, since the fall out of provider "juristiction." So, what do you think 1 million hacked phones translate into? Around $400 million in lost revenue.
The bottom line is that Apple is looking at a bleak future if 30 per cent of the 10 million iPhones Apple expects to sell this year are never activated. If this is indeed the case, earnings per share may decline by as much as 37 cents.
All Apple can do is roll out patches to fix bugs. Usually, updates re-lock hacked devices, but hackers never sleep and a perfect example is last week's 1.1.3 iPhone jailbreak released for Mac.