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T-Mobile Unlocks iPhone in Germany -- At A Price
T-Mobile Unlocks iPhone in Germany -- At A Price

By Jennifer LeClaire
November 23, 2007 8:52AM

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Vodafone's German unit was behind the action to stop T-Mobile from banking on its exclusive deal with Apple that required Apple iPhone buyers to use T-Mobile for service. German customers who purchased an Apple iPhone after the court's ruling can now have their iPhones unlocked to work with service providers other than T-Mobile.

Deutsche Telekom's T-Mobile has bowed to the demands of a German court. On Monday, the court had ordered the company to change its marketing campaign for Apple's iPhone and issued a restraining order prohibiting the company from selling the Mac-maker's handset.

T-Mobile said on Wednesday that it would change the terms of the exclusive contract it forged with Apple and allow the iPhone to operate on rival networks. T-Mobile will sell the device for 999 euros (about US$1,477) without mandating a two-year exclusive contract, however the original deal for 399 euro ($590) with a contract attached is also still available. By way of comparison, the Nokia N95 sells for 199.95 euros ($295.63) with a contract, or 619.95 euros ($916.60) without one.

Reversing the Damage

Vodafone's German unit was behind the action to stop T-Mobile from banking on its exclusive deal with Apple. The company petitioned the court to block sales of the iPhone in Germany until its complaints about an exclusive agreement between Apple and T-Mobile are addressed.

German customers who purchased the iPhone after the court's ruling can have their phones unlocked to work with any other operator, however, many of the functions will only be available to T-Mobile customers with the complete tariff package, according to published statements from the company.

Apple's exclusivity strategy has also faced challenges in France. When the iPhone goes on sale there next week, Apple won't be allowed to require customers to sign up with -- and only with -- service provider Orange. There has been yet no challenge to Apple's exclusive arrangement with O2 in Britain. The difference: Germany and France both have antitying laws that prohibit such restrictions.

Apple's Stateside Woes

Apple's exclusive deal with AT&T has ruffled plenty of feathers in the United States. Although other mobile carriers have not challenged the deal, consumers have attacked the company with lawsuits. California resident Timothy P. Smith is bringing a class action lawsuit against Apple for its policies and rules against unlocking the iPhone.

What's more, a New York woman sued Apple for slashing the price of the iPhone shortly after its much-hyped launch. Now, a member of Apple's iPhone discussion forum who goes by the name "Myndex" is mulling the possibilities of a class action lawsuit against the company for refusing to service unlocked phones.

Another lawsuit has been filed over the price. Apple cut the price of the iPhone from $599 to $399 in early September, drawing the ire of the people who stood in line for hours to be the first to purchase the handset. Apple CEO Steve Jobs posted a letter at the company's Web site to apologize and offer a $100 refund in the form of store credit to those who paid $599 for the iPhone. That wasn't good enough for some.

The Million-Dollar Question

From where Current Analysis wireless analyst Avi Greengart sits, the unlocking issue has boiled down to one simple questions from consumers and journalists: If I unlock the iPhone in the United States, can I use it on Verizon Wireless? The answer is no.

"It's very important to note that in the U.S. it's not about unlocking. It's more about technologies the carriers use," Greengart said. "If you unlock and iPhone you can use it on T-Mobile in the U.S. But you can't use it on Verizon, Sprint or Alltel because they use a completely different networking system."

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