Deutsche Telekom¿s premium for unlocking the iPhone: ¿600

Now we know what a legally unlocked iPhone is worth: 999 euros, or $1,477.

That's what Deutsche Telekom's T-Mobile unit in Germany is charging for a contract-free iPhone in the wake of Monday's court injunction ordering it to cease selling locked iPhones. The price for an iPhone with a two-year contract is 399 euros, or $590.


Apparently T-Mobile simply baked the revenue it would have received from the two-year contract into the initial sales price.

To put it in perspective, a black MacBook or the 20-inch iMac with the 2.4 GHz processor costs about the same as an unlocked German iPhone.


At first it sounds crazy. Who would pay that much money for a cellphone? And while such a customer is free to choose his or her cellular provider, that still means shelling out even more dough for monthly service.

And yet that is the crux of T-Mobile's (and presumably, Apple's) strategy. By offering an unlocked iPhone at an outlandish price, T-Mobile satisfies the demand of the court order while simultaneously discouraging anyone from taking advantage of it. The court order said nothing about a decent price. Expect the unlocked French iPhone, due out by the end of this month, to carry a similar weighty premium.

Not everyone faces the tough choice between paying a reasonable price and freedom of carrier choice, though. Any lucky ducks who already had bought an iPhone in Germany from T-Mobile can have the SIM lock on their phones removed at no extra charge.

In a post yesterday I suggested that the legal problems in France and Germany will be repeated as the iPhone launches in other parts of the world, and that Apple needed to re-evaluate its "one-country, one carrier" policy.

I'm not sure that charging an exorbitant amount for an unlocked version of the iPhone will be the answer in every case, but it could work in Europe. In countries with more active underground economies such as China -- where the black market price of unlocked iPhones already has dropped below $500 -- the strategy could backfire.

Apple has created a bit of a trap for itself in brokering these clever revenue-sharing deals with carriers that depend on locked in customers. They're lucrative for Apple, but not very customer-friendly. A lot of customers want unlocked iPhones, but unlocked iPhones wreck the business model. Ugh.

Eventually Apple will need to come up with a better answer that preserves a decent profit for itself without alienating the millions of customers it needs to ensure the iPhone's success.

I don't envy the guy with that assignment.