Silicon Alley Insider - Dan Frommer | June 9, 2008 5:27 PM

Apple’s new iPhone, launching July 11, will be some $200 cheaper and will (eventually) be available in 70 countries. In theory, this will curb the “unlocked” iPhone economy, in which people buy iPhones in the U.S., hack them so they can work with any cellphone operator, and sell them for big profits overseas.

Why? Lower prices and much wider availability will encourage many would-be unlockers to buy their iPhone legitimately, from the carrier in their country that Apple has partnered with.

But we don’t think we’ve seen the end of the unlocked iPhone phenomenon. Why not?

First, the iPhone still isn’t available everywhere — most crucially, it still won’t be sold (legally) in China. And second, there will still be people who want to use the iPhone on a low-cost, non-Apple-blessed carrier; Apple is still only teaming up with one or two carriers in each of the countries it will sell in.

But this is more an intellectual exercise than anything else. Now that Apple is giving up the most of the lucrative monthly kickbacks it used to get from carriers, unlocked iPhones won’t be much of a financial concern to analysts who freaked out about all the money Apple was “losing” to unlockers.

Update: Helpful commenters note that during a conference call today, AT&T (T) said that in the U.S., you’ll have to activate your new phone immediately — not later, at home. (We’ll tune into the archived call later for the exact wording.)

This adds an economic hurdle to the unlocking process — AT&T’s early termination fee, or riding out a 2-year contract — meaning you’ll have to work doubly hard to get an unlocked iPhone. Obviously this kills the deal for many of us, and will make it hard for individuals to “export” multiple phones. But we think that some buyers — especially rich people overseas, who see the iPhone as a fashion item — will still deal with that challenge to get their hands on an unlocked iPhone.

source: SAI

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