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Discussion Starter #1
As I understand it, unlocking your phone is now a crime.

That said, what is the estimated value of your phone?
Confirmed - as of January 26th, it is illegal to personally unlock your smart phone, as there is cost incurred by the carrier to purchase the phone and sell it to you at the reduced price.

..You'd think they'd just make penalties for cancellation higher - or outline a per-device depreciation method over the course of the contract and roll that into the cancellation fee....

Nope. Gotta be law!
 

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Because the cell carriers gave the corrupt a******s in government money to make it so.

But as stated, it's only in the US. Mexico and Canada it's totally legal. Not that it does you any good In Mexico since there's BASICALLY only 1 cell carrier in Mexico.
 

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Because the cell carriers gave the corrupt a******s in government money to make it so.

But as stated, it's only in the US. Mexico and Canada it's totally legal. Not that it does you any good In Mexico since there's BASICALLY only 1 cell carrier in Mexico.
well ya, besides corruption, i mean what is the reasoning they are using? Last I checked i could modify the hell out of my computer and nobody cares but do something to my phone and it is illegal?
 
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Discussion Starter #11
It has something to do with the carriers reducing the cost of the phone for the end-user - where say...AT&T sells a $650 phone for $200 - requiring a "hit" of 450. That 450 is said to be recovered during the 2 year contract period.

So - to create a model (having not put thought into this yet) -

Person purchases $650 phone from carrier for $200 and signs 2 year contract. Assuming there is no volume discount given to carrier - carrier distributes cost over a 24 month cycle - totaling 18.75/mo.

Say...person stays with carrier for 6 months - 112.50... + 200 cancellation recovery fee = 212.50 + base iPhone cost passed to consumer = |412.50 - 650| = $237.50 loss on the deal.

So...I guess their argument would be that they're forced to operate at a loss with their current business model, and the ability to unlock a phone and switch it to a competing CDMA/GSM market issues profit to their competitor - as the competitor doesn't have to incur the 450 initial cost, and will just be able to easily collect the 18.75/mo.


I get why they'd make it illegal....but I'm siding with Trbo..it shouldn't be illegal to modify something I own. I'll take it a step further to say - that if this is such a problem - transfer the costs to the expense in breaking the contract - but offer trial periods prior to the contract to ensure the user has service where they need it.
 

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The problem with your reasoning is it does not cost $650 to build an Iphone/Android Phone. The last Iphone had a cost of $207 to build. This includes all of the parts required, box to sell it in, materials sent with it, and manufacturing cost. I am not sure about the average profit margin on electronics, but I think it used to be 30%. So not counting shipping and overhead, they should charge $270 to be average.


Look at Apples profits and actual profit margin they have reported. They are still making money on phones that are jail broke, just not as much as they would like.
 
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Discussion Starter #13 (Edited)
The problem with your reasoning is it does not cost $650 to build an Iphone/Android Phone. The last Iphone had a cost of $207 to build. This includes all of the parts required, box to sell it in, materials sent with it, and manufacturing cost. I am not sure about the average profit margin on electronics, but I think it used to be 30%. So not counting shipping and overhead, they should charge $270 to be average.


Look at Apples profits and actual profit margin they have reported. They are still making money on phones that are jail broke, just not as much as they would like.
Right - but the cost of production of a given phone model...in my model, the iPhone... isn't relevant to the discussion. Apple isn't the one crying the loudest about sales and profits - its the distributors...so AT&T, Verizon, Sprint, etc.

With the assumed 30% mark-up...the device is ~$300 in the first sale. From there - the retailer still will want to turn a profit - and if you were to break your phone while under contract, they'd offer you one at a premium (per Apple's contractual protected pricing scheme)...so what better price to use than the non-discounted, unlocked straight from Apple one?


I thought about the Apple Store would want to hop on board as well for lost profits from jail breaking a device... but..though harder on it and concluded that it sucks they're losing profit - but their only real recourse would be voiding your warranty...

funny thing about that. To those that take apart PC's and junk - if you've ever done it for a smoker or in a smoke-friendly residence... Apple's decided to consider that product abuse and void warranties (https://discussions.apple.com/thread/3071271?start=0&tstart=0)

derailing further - funny how this is all playing out and laying out:

*First reduced health care premiums if you decide to submit to "healthy" testing at work.

*Then voiding warranties if you participate in unhealthy activities.

*Then adapting a forced mentality or something like a 1% on income tax on health care

*Then being told how to use a device through the illegalization of unlocking...

*Then additional Sin taxes extended to foods with no beneficial value

*Then outlawing of beverages over 16oz in NYC (sans Diet products)

*Firearm mandates on the horizon...


Land of the free :)
 
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Discussion Starter #15
Wow..per the article - I wasn't too far off on the costs swallowed by the wireless carriers.


I get where you're coming from but.. take it up to the next higher level.

Is it a crime to ask a high price for a device that's not needed, and is seen as being Chic? I mean - we see this on PbN all the time. Some confident monkey thinks his DM9 is worth 80% of what he paid for it...

To me - this seems like the carriers are doing the same thing most Americans with balloon mortgage policies did when the housing bubble popped...

"But I'm an American...I should have 2 BMW's and a 4 bedroom house with 3.5 bath in the suburbs. I just ...need another loan to pay my mortgage this month."


The phone is priced out of the reach of those that 'should' be able to afford it. Carriers are incurring the initial costs to make these sought-after devices available to the general public...and are being taken advantage of for doing this.

I mean - I hate to say it - but from this angle... we passed laws to continue to help the stupid be stupid...lol.


But playing into this and the market economy. If it costs $207 per unit, and the 30 percent margin is in place... Apple could bork the entire cellular telephony industry by offering both a CDMA and GSM phone that just needs to be set to one of the larger networks - and circumvent the entire contract issue. Hell, I'd pay $300 for a phone if it meant I wasn't roped into a contract.

And if they're not willing to sell it for $300...they'll be priced out of the market and have a lot of $207 devices they'll have to liquidate to cover overhead... but we know how that goes watching Circuit City and other big box stores slowly head the way of the buffalo...
 

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It has something to do with the carriers reducing the cost of the phone for the end-user - where say...AT&T sells a $650 phone for $200 - requiring a "hit" of 450. That 450 is said to be recovered during the 2 year contract period.

So - to create a model (having not put thought into this yet) -

Person purchases $650 phone from carrier for $200 and signs 2 year contract. Assuming there is no volume discount given to carrier - carrier distributes cost over a 24 month cycle - totaling 18.75/mo.

Say...person stays with carrier for 6 months - 112.50... + 200 cancellation recovery fee = 212.50 + base iPhone cost passed to consumer = |412.50 - 650| = $237.50 loss on the deal.

So...I guess their argument would be that they're forced to operate at a loss with their current business model, and the ability to unlock a phone and switch it to a competing CDMA/GSM market issues profit to their competitor - as the competitor doesn't have to incur the 450 initial cost, and will just be able to easily collect the 18.75/mo.


I get why they'd make it illegal....but I'm siding with Trbo..it shouldn't be illegal to modify something I own. I'll take it a step further to say - that if this is such a problem - transfer the costs to the expense in breaking the contract - but offer trial periods prior to the contract to ensure the user has service where they need it.
so in the states, cancellations don't include subsidy recouping? cuz up there they do. if you get a discounted phone and you cancel early, you owe that subsidy back
 

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ya i say tough luck apple. thats the gamble you pay when selling phones at a reduced cost. if they are dumb enough to sell phones at a reduced cost and then not completely cover that cost in the cancellation agreement, tough luck

Also, does this mean that you can technically unlock a phone if you buy it for full price?
 
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Discussion Starter #20 (Edited)
In the states - from experience - they have a flat-rate subsidy recouping fee for early termination of a contract.

Usually that value is between 200 and 250 dollars...though I've seen it as low as 150 at one point from Sprint.


And it wouldn't be Apple out the money - its the carrier, who reduced the price of the phone without putting the red flag in their agreement. Seems they'd prefer to have a useless device in someone's hands than to try to recoup fees/costs/etc. through just communicating that the end-user is responsible for the balance of costs due if early termination were applied - though...I wouldn't doubt there was probably a lawsuit at one point that decided that methodology to be illegal. I'm just too lazy to look into it.


Also - Trbo...you're correct. If you purchase an unlocked phone, and take it into any carrier (assuming carrier types line up) - because you're not purchasing a phone, you can request to be on a "monthly plan" with no contract. It would function much like it does when you exceed your contract duration. They continue to bill you, you're able to change your plan at-will...there's no commitments. It took a bit of back-and-forth to do this in 2008 with Sprint..but the sales associate finally called the mother ship and I was granted service w/o contract. They won't give you any discounts because you're not paying down the carrier's loss on a phone sale... but if you're going out of town for a week or month, and your phone service in the new area sucks.. you can roll your plan down to a minimum w/ no extended obligations. Worked well when I was in Western WI, and St. Paul a lot back in 2008/9.

http://support.sprint.com/support/article/Learn_about_early_termination_fee/case-sp061027-20110823-171256
Sprint's termination agreement verbage
 
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