Huge Numbers of iPhones Unlocked: Analysts

By Michael Santo
Executive Editor, RealTechNews

Toni Sacconaghi, an analyst at Bernstein Research, has backed off his initial assertion that tons of iPhones are sitting on warehouse shelves. Rather than that, Sacconaghi estimates about 1 million iPhones have been unlocked - which is possibly worse news for Apple.

This number came about by taking Apple’s numbers, subtracting AT&T’s activations and those iPhones estimated to be sold in Europe already, as well as a reasonable number on the shelf. While some may say this is still good for Apple, as a sale is a sale, Apple loses a lot of revenue because it’s not getting its percentage of the monthly plan fee paid to the carriers.

In fact, Sacconaghi estimates that an unlocked iPhone generates about 50% less lifetime revenue and about 75% less profit for Apple than one running on one of Apple’s carriers. And, he said, if the percentage holds constant and 30% of the 10 million iPhones Apple estimates it will sell this year were unlocked, then the company’s earnings could be as much as $0.37 / share less in each of the next two years. Whew.

At the same time, analyst firm Piper Jaffray estimated that just under 850,000 iPhones - or 25% - were sold unlocked last year. Either way, a huge number, and it shows just why Apple is so anxious to keep the device locked down on networks.