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Unlocking the iPhone
UAE customers must be aware that buying the phone from the grey market means its warranty is void if it has been hacked to run on authorised telecom operators
- By Scott Shuey & Abbas Al Lawati, Chief Business Reporter & Staff Reporter
- Published: 23:50 October 9, 2007
- UAE customers must be aware that buying the phone from the grey market means its warranty is void if it has been hacked to run on authorised telecom operators.
- Image Credit: Gulf News
There are a few things UAE residents may want to know before they pick up an iPhone: you can't update it, you can't return it, and if it stops working, you may be stuck with it.
Why the lack of support for a phone costing as much as Dh4,000? It's because the current crop of iPhones turning up in the UAE are sold in a grey market, which means that phones are not being sold by authorised distributors nor are they authorised by Apple to run on either of the UAE's two telecommunication networks.
The iPhones have been unlocked using third-party software so they can work on local networks.
Apple Inc's response to unlocking the iPhone has been very straightforward: using third-party software to unlock an iPhone voids its warranty. Apple will not support the phone after that in any way.
The company began warning iPhone users in September that activating their phones without using approved service providers may cause "irreparable damage" to the device and prevent them from using new features.
Apple's warning has been criticised by some, but buyers have no way of knowing what other effects the unlocking software could have on the phone.
It is not just support that is being withdrawn. Any updates to the phone's software starting with version1.1.1 will result in the phone being disabled, rendering it into what many in the US have dubbed the iBrick.
Apple has said that their only solution for a "bricked" phone is to buy a new one. Apple has drawn harsh criticism for their policy, and Timothy Smith, a California resident, has even sued Apple claiming that unlocking cell phones is legal and that bricking is anti-competitive.
Local retailers
Some retailers in the UAE have sold the phone claiming there is no warranty. However, that is somewhat ingenious, says Magnus Nystedt, a certified Apple Help Desk Specialist who is also president of EmiratesMac, an Apple Users Group located in the UAE. The unlocked iPhones have already had their warranty voided.
An iPhone user in Dubai, Omar K., said he bought it from a "dealer" he was introduced to by a friend.
"It's not too hard to find it in Dubai. It's not illegal. There are many dealers and anyone who asks around will eventually find it. The key to buying one is trying to find one at a good price. I bought mine for Dh2,100 the price it sells for in the US plus a small unlocking fee."
The Virgin Megastore, which is an Apple Authorised Retailer, was offering the 8 GB version of the phone last week for Dh4,000 but all the stores contacted by Gulf News yesterday said they were out of stock. The same phone retails in the US for only ($399) Dh1500.
Emilie Loivet, PR manager of Virgin Megastores, said the company would not comment on whether it had Apple's permission to resell the unlocked phones. Loivet would only confirm that Virgin Megastores had sold some iPhones without elaborating any further.
Virgin MegaStores in the Middle East is owned and licensed by the Lagardere Group, a French media company.
A Virgin Megastore sales executive had told Gulf News that the first batch of forty "hacked" iPhones were sold out in minutes early last week and a second shipment "from a dealer here" would be expected by this week.
"Since it hasn't been released officially we haven't been promoting it, and are relying solely on word of mouth," he said. The executive said it had ordered up to 1,000 new unlocked units of the iPhone after the first batch was sold out.
When Gulf News called the Virgin Megastore at the Deira City Centre yesterday, an employee said the unlocked version of the phone would be back in stock and available for sale "shortly."
Phones sold at the Virgin Megastore were offered without a warranty or the option for an exchange or a refund.
"This is not something that is done by responsible retailers," said Jihad El-Eit, senior vice-president of marketing for i2, a mobile phone and services retailer. "There has to be a warranty. If it breaks, people should be able to bring it back and have it fixed."
El-Eit said the i2 stores have not been selling the hacked iPhones and have no intention to.
Nystedt said the controversy surrounding the unauthorised sale of such products did not have to do with legal issues, but that of responsible business practices. "They are charging excessive amounts without being able to offer after sales services or support," he said.
The sale of unlocked iPhones was unlikely to affect Apple because the revenue had already been made, he said. "But it could affect their image".
Abbas Jaffar Ali, editor-in-chief of tbreak.com, however, said that the potential lost sales could be a concern for Apple's official distributors in the UAE, but that it would be unlikely for them to release the phone sooner since that decision would be left to Apple's headquarters in the US.
"The Middle East is a relatively small market for them, so they would probably want to release it in Europe first," he said.
Apple has said that the company would not pursue action against companies selling iPhones on the grey market where the phones have yet to be released.
Regulatory issues
The issue of grey market phones may go away when the iPhone is released in the UAE, probably sometime early next year. Before that happens, Apple will probably pick either du or etisalat to partner with.
El-Eit said Apple's strategy of sticking with a single, exclusive network is smart considering the relatively low number of iPhone on the market, but thinks such a strategy would not work here in the UAE.
"It would be a big failure for them," he said. "We are not in Europe. The market here has always been open to unlocked phones."
Whether Apple will be able to tie into an exclusive network in the UAE remains to be seen, but Nystedt has said that he has heard rumours that the iPhone will not be officially released in the UAE because of problems getting the Telecommunications Regulatory Authority (TRA) to approve an exclusive deal between Apple and the network it chooses. Apple has indicated that it will not offer an unlocked version of its iPhone.
But an etisalat spokesman told Gulf News an exclusive deal between Apple and a UAE telecom operator might not need TRA approval.
"If there is a different kind of service, which goes beyond a handset, then the TRA might have to get involved," the spokesperson said, adding that the TRA usually only deals with customer pricing and network interconnectivity.
Exclusive contracts in the UAE are not unheard of. etisalat currently holds the exclusive rights to Blackberry services in the UAE, according to an etisalat spokesman.
Spokespersons from both etisalat and du said the telecom service providers have not been approached by Apple regarding the iPhone.
Neither Arab Business Machines, the distributor for Apple in the Middle East, nor the TRA responded to Gulf News' request for a comment.
Your comments
I think Virgin is taking advantage of customers for a quick buck. I am amazed that a reputable company like Virgin would resort to such a cheap trick that even the small companies don't do.
Ali
Dubai,UAE
Posted: October 10, 2007, 13:12
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