You're at a dinner party and someone pulls out a spanking new Apple iPhone. You hardly bat an eyelid, after all, it is the sixth one you've seen in the last six months.
But, hang on...you're in Singapore and Apple has yet to launch its mobile phone in Asia. Purchasing an iPhone from countries where it is available won't do any good either, because the mobile device is locked and won't work on GSM networks that aren't operated by Apple's partner-carriers.
That would probably explain why an estimated 1.35 million iPhones are missing from the carriers' inventory. In fact, RBC Capital Markets predicted that unlocked or hacked iPhones account for as high as 30 percent of all iPhones sold globally.
This week, AT&T--the exclusive U.S. carrier of the iPhone--unveiled that it closed 2007 with almost 2 million iPhone customers, activating 900,000 units of the mobile device in the fourth quarter.
But, the numbers don't quite add up to Apple's own announcement that it sold 3.7 million iPhones last year.
That leaves 1.35 million--after excluding additional sales in Europe--units unaccounted for. Market observers suggest this figure can likely be traced to iPhones that have been unlocked, and transported to countries outside of the United States and Europe where the device is currently not available.
I've personally seen iPhones being used by local users here in Singapore, and hearsay has it that even a high-profile government official was given one as a gift. A consultant from Envisoneering Group, Richard Doherty noted that two out of three iPhones he's seen in his travels outside of the United States are hacked, and nine of 10 phones in China are unlocked.
If hacking continues to be widespread, in spite of Apple's efforts to curb such activities with new fixes, the iPhone maker will find it tough to launch the device with exclusive carriers worldwide. Partners such as AT&T, will feel shortchanged because they have to share revenues from the sales of locked iPhones with Apple, when so many unlocked version of the mobile phones are being sold.
But, I think the crux of the problems lies in Apple's decision to make the iPhone available only through exclusive carrier-partners. When you limit consumer choice, you're only baiting users to find a way around the restriction and make a bid for the forbidden fruit.
This problem is further exacerbated by Apple's decision to omit other key regions--specifically, mobile hotbed, Asia--when it launched the iPhone.
Again, when consumers can't access a product or technology that is already readily available to others in the global market, they will find any means and ways to get their hands on it.
Even if Apple didn't deem it important enough to extend their marketing efforts to Asia, or regions outside of Europe and the United States, the company should have--at the very least--made the iPhone available in these markets through resellers, distributors or other service providers.
Giving consumers choice and access to technology is just as important a business decision as choosing glossy black as the flagship color of your phone design.