T-Mobile unlocks iPhone for a (big) price

The move markes the first official iPhone unlock

T-Mobile GmbH will sell unlocked iPhones for US$1,482, (AU$1,694.43) the German mobile carrier said Wednesday, marking the first time Apple's smart phone has been officially available unlocked.

Unauthorized hacks, however, have been used for months by customers to unlock their iPhones so they can make calls on multiple networks or use the device in countries where Apple hasn't yet entered the handset market.

In a statement Wednesday, T-Mobile said it would immediately start selling unlocked iPhones, and unlock any already-purchased iPhone for no charge. It made both moves in response to a preliminary ruling Monday in a lawsuit brought by Vodafone Group's subsidiary, Vodafone Germany. According to the injunction, which T-Mobile is appealing, Apple's wireless partner must offer the iPhone without a required 24-month contract.

The iPhone, which debuted in Germany on November 9, sells for US$592, value-added tax included, and has been offered with three rate plans -- called tariffs in Europe -- priced from US$73 to US$132 per month.

U.K.-based Vodafone had been among the mobile service providers negotiating with Apple for exclusive rights to the iPhone, but in Germany lost out to the larger T-Mobile, which is owned by Deutsche Telekom.

Vodafone has said it isn't interested in blocking sales of the iPhone in Germany, but wants the courts to level the playing field between carriers. Vodafone did not reach an agreement with Apple in the two other European markets that Apple has entered: Britain and France. Apple's U.K. partner is O2 (UK), while Orange, the rebranded France Telecom, won the deal in France, where the iPhone goes on sale on November 29.

"Apple can be profitable just on the hardware," argued Ezra Gottheil, an analyst at Technology Business Research. "More is always better, of course, but by unlocking it for a larger price, Apple gets its money."

Gottheil wasn't surprised by Vodafone's move. "There's a great deal more resistance to locked phones in Europe," he said, noting that Apple has already promised to abide by French law, which bans locked cell phones, when it unveils the iPhone there next week.

"In the end, Apple is a provider of neat devices, and it will always return there," said Gottheil. "If and when it's seriously threatened by a rival, and depending on the duration and terms of its exclusive [contract] with AT&T, I think it would unlock the phone in the US in a second."

But even as T-Mobile promised to abide by the injunction while it appeals the ruling, it also said it would retract the offer if it prevails. T-Mobile is also considering filing a lawsuit against Vodafone seeking unspecified damages, said company spokesman Klaus Czerwinski on Wednesday. "We think the law does not apply to this situation," Czerwinski said from Bonn. "We are still going to court."

T-Mobile will continue to sell iPhones tied to a contract, the company said Wednesday. As part of its revised pitch, T-Mobile reminded potential customers that some of the iPhone's built-in features, including Visual Voicemail, which lets users pick and choose messages to listen to, work when connected to its network.

Apple did not respond to a request for comment.

Jeremy Kirk of IDG News Service contributed to this report.

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Gregg Keizer

Gregg Keizer

Computerworld
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