iPhone 3G won't be a hacker's paradise

Apple’s war with iPhone crackers over; let the carrier price wars begin.

The hacking and unlocking fanfare that surrounded Apple's first iPhone will be nowhere near as rampant with the new iPhone 3G.

According to Gartner Australia's research director of mobility and wireless, Robin Simpson, the number of global carrier agreements Apple has made this time around means the motivation for unlocking and shipping the iPhone 3G around the world will not be as prevalent as it was with the original iPhone.

"I suspect the hackers will still be able to unlock them sooner or later...[But] there is no fantastic deals available from anyone anywhere in the world at this point in time. No carrier has announced something so attractive that you would want to get one from there and bring it over to Australia.

"I think the motivation behind the cracking is going to be much less than it was last time," he said.

Simpson believes the cracking of the original iPhone was hugely in Apple's interests, despite the company's efforts to counter the cracks through firmware updates that blocked cracked phones.

"They certainly put up an effort to hose it down, but at the end of the day it kept happening and by some estimates there might be as many as 100,000 iPhones in Australia already, and in places like India there are literally hundreds of thousands, so it was in their interests," he said.

But now that Optus, Telstra and Vodafone are all offering the iPhone 3G, potential users wont need to go to the trouble of sourcing an iPhone overseas or risk software problems and lack of technical support due to cracking.

Simpson believes this time the battle will be between the carriers for customers.

"In a market like Australia if one carrier is significantly better than the others the only thing that will happen is people will churn. The prices announced so far are OK, I'm sure a lot of people would like it to be cheaper...I think a lot will come down to the Telcos, not Apple. It's their decision what they will price it at."

Simpson said the cost of the iPhone 3G in Australia is on par with other smartphones, and it would be unfair to call it overly expensive. He suspects HTC's Touch Diamond handset, being marketed as an "iPhone killer", could cost even more.

"They [iPhone 3G plans] could probably be better, but so many people want it that they are going to pay the price. It's not as if they have to discount it to make people interested," he said.

Price competition won't solely revolve around the contract or pre-paid cost of the new iPhone either, as iPhone 3G users are expected to consume much higher data rates. T-Mobile in Europe said customers with iPhones use 30 times more mobile data than any other phone in their portfolio, while O2 in the UK said iPhone customers use 10 times as much.

"It doesn't really matter - 10 or 30 times more is an awful lot more than a typical phone. And this is clearly why the operators are falling over themselves to get the tick to distribute it.

"They will get higher revenues per user, so the real story is going to be what it does to mobile data prices. Because the one thing consumers won't like is if they get gouged on excess usage prices and so on," Simpson said.

"I think over the next few months we'll see the operators fine tune their mobile data plans a little to keep customers happy. That's great for the industry because all of a sudden people will get used to the idea that there is a lot more you can do with a mobile phone than just voice, and that will flow onto other devices that are available on the market as well."

But the new iPhone isn't for everyone: a lack of Bluetooth, video camera, removable battery, Wi-Fi sync, support for Adobe Flash, voice-dialling or MMS have left some saying the new iPhone 3G sucks.

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Andrew Hendry

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