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Unlocked iPhones land in Hong Kong

Posted: 02 Oct 2008 ?? ?Print Version ?Bookmark and Share

Keywords:iPhone? Hong Kong? unlocked models?

In an apparent break from the marketing strategy it has employed in the rest of the world, Apple Inc. is offering in Hong Kong a carrier-independent, "unlocked" iPhone that can be used with each customer's wireless operator of choice.

According to the Apple Store's Hong Kong Website, iPhone 3G purchased at the Apple Online Store can be activated with any wireless carrier. Customers are advised to inset the SIM card from their current phone into the iPhone 3G and connect to iTunes 8 to complete the installation.

The unlocked iPhone 3Gs are not cheap. An 8Gbyte iPhone 3G retails for about $695, while a 16Gbyte version retails for about $798, according to the Website. The same models in the U.S. retail for $199 and $299, respectively, with service agreement from carrier AT&T Wireless.

According to David Chamberlain, principal analyst with In-Stat, the offering of the unlocked iPhone in Hong Kong has more to do with the dynamics of the island's wireless market than it does a fundamental change in Apple's strategy.

Wireless market dynamics
Chamberlain said every region has different models for selling mobile phones, from places like the United States and Japan were the phone is subsidized by the mobile operators to places where the two operate virtually independent of each other. Hong Kong is an area where phones are often purchased without a wireless service contract, he added, saying operators typically offer only a SIM card.

The unlocked iPhone "certainly works with the way people buy phones in Hong Kong," Chamberlain said.

Chamberlain said he expected many of the unlocked phones purchased in Hong Kong to find their way into other Asian markets where the product is not yet offered. But, at the high retail price, the unlocked phone doesn't pose a risk to any of the mobile operators with which Apple has partnered throughout the world, he said.

"At that price, I don't see them undercutting mobile operators with whom they already have deals," he said.

The iPhone 3G has been available in Hong Kong and 21 countries since the product's initial launch July 11. This is believed to be the first time Apple has offered an iPhone that was not tied to a service contract from a mobile carrier.

There have been widespread reports of unlocked iPhones showing up in Asia since the original iPhone debuted in June 2007. Chamberlain said "hundreds of thousands if not millions" of iPhones purchased in the U.S. were never activated through AT&T.

Chamberlain noted that Apple earlier this year began limiting iPhone purchases to a maximum of five per customer and that there have been many reports of truckloads of people showing up to an Apple store to buy the maximum number of phones with cash. Many of these phones, he said, wound up unlocked and for sale in Hong Kong and other places.

- Dylan McGrath
EE Times

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