Apple Inc. will sell the new iPhone 4 unlocked in Canada, allowing consumers to buy the phone online and shop it around to the wireless service provider of their choice.
Though Apple will also sell the phones through its retail stores and the stores of carriers offering service for the device, such as Rogers Communications Inc. and Telus Corp. , the Cupertino, Calif.-based technology giant has decided to sell the phone "commitment-free" to customers who may want to roam internationally.
Having an unlocked phone means users can take the handset around the world, popping in SIM cards for other global carriers that use the same wireless technology standard.
So far in this country, if you buy an iPhone from a certain provider you have to stick with that provider. Usually, the carrier chips in a subsidy that lowers the cost of the device in exchange for a long-term contract. Apple's new offer changes the game.
"This is simply saying that the carrier subsidy model appeals to some people but not to all people," said Iain Grant of the telecom consultancy SeaBoard Group. "I think Apple has learned that it makes more sales having a diversity of carriers than it does being locked into one."
In the U.S., AT&T has an exclusive deal with Apple. Anyone south of the border who wants an iPhone has to use it on AT&T, a company that's had its share of network problems and recently eliminated its unlimited data plans.
But a glimpse on Apple's Canadian website shows the company is selling its current 8GB 3Gs model ($549) and will sell its new iPhone 4 unlocked.
"When you purchase your iPhone from the Apple Online Store, you'll get it commitment-free," the site reads. "So you can sign up for service with the carrier of your choice and change your carrier at any time."
Google and HTC tried a similar strategy with the much-hyped Nexus One smart phone. This process is often viewed as a way for influential handset makers to cut carriers out of the equation. Carriers traditionally prefer to offer handsets through their retail chains, enticing people with fancy gadgets and signing them up for a long-term contract. Google made an effort at cutting out the carrier, but ended up back-tracking when online sales disappointed.
It's not terribly surprising that Apple is attempting this, since the company often extracts concessions from wireless carriers and demands an intense level of secrecy.
But this, Mr. Grant notes, is different: The company is still leveraging its popular Apple retail stores, where line-ups for new devices sometimes snake down the street; and Apple is still allowing customers to buy the handset through a carrier, such as Rogers, since most customers will likely not want to shell out the full price and will opt for a subsidy and a contract.
Of course, iPhone exclusivity is already non-existent in Canada: All three major carriers (Rogers, Bell and Telus) currently offer service for the phone, unlike in the U.S. where AT&T has a monopoly. So it makes sense to sell the phone unlocked to Canadians, empowering consumers to shop the device around to wherever they'll get the best service (though most data pricing remains similar among the Big Three).