Just Where The Hell Did All The iPhones Go?

Here’s a problem: Apple says they’ve sold 3.7 million iPhones. AT&T says they’ve activated 2 million iPhones. Just where the hell are the rest of the iPhones?

The various theories get sort of complicated (taking into account European sales, etc.) but it boils down to this: Either there are a million unlocked iPhones out there, or the demand is not as high as Apple’s numbers suggest and there are lots and lots of unsold phones sitting around on AT&T shelves.

Report: iPhones piling up at AT&T stores [CNET]
(Photo:epicharmus)

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  1. youbastid says:

    I wouldn’t be surprised if there were a million unlocked iPhones. Way more unlocked iPhones in the rest of the world than in the US.

  2. youbastid says:

    I also wonder if AT&T is taking into account the pre-paid service that a lot of people have on the iPhone.

  3. RAREBREED says:

    Are returned iPhones subtracted from the total count? I know a LOT of people who’ve returned them…

  4. mixerfx says:

    It’s no problem if you take on consideration all of the people that bought an iphone to either have it activated ilegally with another carrier, or using outside the US, like some friends of mine did here in Mexico.

  5. rmontcal says:

    My sister has an iPhone, so check that one off as being accounted for.

  6. arsenal4 says:

    I have a 4GB sitting on my bookshelf untouched. Can’t vouch for the other 1.699999 million phones out there…

  7. arsenal4 says:

    …make that 1.699998. Didn’t activate my other one the “traditional” way.

  8. jkhazael says:

    Since the dollar has crashed, I have noticed that European tourists love buying iPhones here to take back to Europe. Not 1.7 million, but probably a big chunk. Some friends told me that lots of people had two or three iPhones with them on their way from DC to Rome.

  9. harumph says:

    people in japan were paying more than twice the retail price for them when they first came out here. they would just use them for all the other stuff aside from the phone part.

  10. winstonthorne says:

    Dual use technology perhaps?

  11. NoWin says:

    @arsenal4:

    …make that 1.699997. I have a friend who bought one, but wants to wait until his current plan expires before activating it.

  12. HRHKingFriday says:

    I hate it when people feign surprise about this. When the first million were sold, only half of them were activated. And that was back when you couldn’t find them in stores and there was a 2-4 week wait on apple.com. So that’s at least half a million that were sold on ebay to some rich kid in japan. Add to that, the fact that if you buy one, odds are you’re enough of a fan to know how to jailbreak and unlock it.

  13. mac-phisto says:

    it depends on where the sales numbers come from. apple probably considers “shipped units” as sold, even if they are sitting in a retailer’s warehouse. that would account for the difference in numbers.

  14. enm4r says:

    So to clarify, is Apple reporting shipped units or sold units? Sloppy journalism is confusing the terms, though they tend to do this all the time with other tech goodies.

  15. theirishscion says:

    Frankly, I wouldn’t be surprised to find that AT&T weren’t being wholly truthful about how many have been activated. There’s a bit of a feud going on between Stevie boy and Phonezilla, what with Jobbs effectively pre-announcing the iPhone Redux with real 3G and extra magic coming Real Soon Now as punishment for some transgression on AT&Ts part (I forget what it was, which is annoying me), it wouldn’t surprise me at all if AT&T wasn’t really searching as hard as they might be to find activations to report. No sense in making it look more successful than it needs to, it’s not their baby, they’ve already got all the exclusive they’re going to anyway.

    Steve has made it clear in the past that he regards cell carriers as being essentially a commodity, he doesn’t see them as relevant, they just provide the network. Only reason he got in bed with Ma Bell was to get proper support for the visual voicemail and a stable launch network.

    In my humble opinion anyway.

  16. socalrob of the 24 and a half century says:

    My buddy has an iPhone with AT&T and likes it. So he bought his fiance one and unlocked it so she can use it on t-mobile since her sidekick blows. She used it maybe a week and complained of it dropping calls due to the touch screen hitting her cheek. It now sits under her bed gathering dust and he is out the $300 or so he spent on it.

    I just laugh….

  17. faust1200 says:

    Iphones do blend.
    [www.youtube.com]

  18. iEddie says:

    Make that one more. Actually I’ve had quite a few iPhones and only one was activated with the NSA, and that was for a short period of time (a few days until George Hotz’s hardware unlock came out).

  19. ConnerC says:

    @socalrob:

    That’s odd, since the touchscreen is disabled in such a circumstance.

  20. shadow735 says:

    AT&T sucks so where do you think these phones are being activated. I hate AT&T crappy service, I am just waiting for a good excuse to cancel my DSL besides the sometimes slow connections

  21. zibby says:

    I think they’re in a warehouse somewhere, waiting to be collected by people who click on those banner ads.

  22. deadlizard says:

    Consumers want the iPhone unlocked, Apple didn’t listen. Consumers
    still got their way. If Apple sold the iPhone unlocked they’d sold
    15-20 million by now.

  23. mikesfree says:

    I think they said they had 2 million I phone customers… So that could mean accounts… not sure though, but thats what they said on the call.

  24. qwickone says:

    @youbastid: iPhones aren’t selling well overseas because theyre not 3G, so theyre probably arent that many unlocked ones either.

  25. qwickone says:

    @NoWin: Why would he do that? It’s not like they’re running out. It’s a technology item, it’s bound to be outdated whenever he starts using it. Why not just wait until he’s ready for it?

  26. rcsfca says:

    My co-worker bought 6 iphones in a period of six months and took them all the thailand in December to give out to her family and friends. So at least six iphones are unlocked in Thailand.

  27. Buran says:

    @mixerfx: It’s not illegal to unlock a cell phone to use it with another carrier, according to current DMCA exemptions.

  28. wwwhitney says:

    A work friend of mine told me he sees more people using iPhones in China than he does in the United States. Obviously take that with a grain of salt, but it just goes to show how huge the unlocking market is.

  29. Benny Gesserit says:

    I’ve got them all. My coffee table lost a leg, so I used a few of them to hold up that corner. Then I got a few more in a stack to hold up some books on the shelf and, well, things just got out of hand.

    I’ll give ‘em back. Very sorry.

  30. mk says:

    @rmontcal: so does my sister – that’s one more

  31. snoop-blog says:

    was i the only one who seen the iphone more as an ipda? its a pda advertised as a phone.

  32. Demarcnt1 says:

    AT&T (like all other hardware and software manufactures)has an extensive distribution channel that includes, resellers, wholesale distributors and online distribution. As well, each of these can possibly sell nationally and internationally. For those working for large companies, how many of you know what your cahnnel numbers are at any given time? Let’s forget that the almighty wizard who reported this crap to begin with is someone “outside” of AT&T calling in for “financial” imformation…let’s get real. Anyone want to tell me there bank balances and purchase plans? How about your wife/husband’s or girfriend/boyfriend’s? It is easy to account for all the phones that are “posted” to Apple’s books. And let’s not forget, a sale is just that…one sold item. Once it is sold, who gives a rats @#$% where it is? Jesus! Does any other company get this kind of microscope???? How about “micro” soft? Anti-trust violations galore…I don’t see anyone asking them to account for their XBox numbers!

  33. XianZomby says:

    Do you have to activate the iPhone? Can you buy one, put your AT&T sim chip in there, and go? What’s “activation” do? I use iTunes every day. But I don’t have an iPod. And I don’t use the iTunes store. I use it to manage the several thousand MP3s I’ve ripped from CDs i already own. So I didn’t register. Is there a reason to “activate” your phone?

  34. manok says:

    @socalrob: The Iphone’s display shuts off when you are talking. Your friend is a sap.

  35. TheName says:

    Judging by the number of posts to Hackint0sh’s iPhone forums, I’d say a huge huge huge number of the newer phones (>week 45) are sitting in wait for a software unlock; there are numerous individual posters who mentioned numbers in the 50+ range that they were working on hardware unlocking … the 1/3rd estimate doesn’t seem that off base to me.

  36. gundamfans says:

    erm, I think the other million of iPhones are circulating in the global market where proper retail versions of iPhones are not out. I’m from Hong Kong, but study in US right now and bought my friend in HK an iPhone upon his request and brought it back there.

    My point is, the other million is imported to other countries and probably being cracked outside of US and UK.

  37. deadlizard says:

    Considering how big are the markets in China, Russia, India, the
    rest of Asia and Latin America, a million or so “missing” iPhones
    doesn’t look like a lot.

  38. deadlizard says:

    @faust1200: At least we know where one of those missing iPhones went.

  39. ConnerC says:

    @xianzomby:

    No, you cannot use a generic AT&T Sim – it needs to be a iPhone ‘blessed’ one.

  40. chicagocooper says:

    My company has an iphone that isn’t activated for displaying an after market accessory. And we just provided the material for the accessory. You would be surprised how many are used as expensive paper weights.

  41. accessmemorex says:

    I know where they are! 1.7 million listings on EBAY!

  42. Tejas says:

    there are a stack of them in australia – possibly not 1 million, but there are a few – a few thousand here, 10 thousand there – it all adds up.

  43. LatherRinseRepeat says:

    Hmm.. What if someone bought an iphone, activated it, broke their iphone due to accident/abuse, then bought another iphone to replace it, and activated the new iphone under the old account? So it’s possible ATT is counting unique account activations, both post-paid and pre-paid. And Apple is counting hardware units, but not counting the accounts tied to the phone. The remainder are probably unlocked phones that hit the grey market.

    If your local supermarket sold 100 jars of peanut butter today, does it also mean they sold 100 jars of jelly and 100 loaves of bread? Of course not. This is just another lesson that we should take things with a grain of salt, when companies release “facts and figures” to the public.

  44. kinkish says:

    There are also a lot of people in the US who travel back and forth Asia who brought phones to sell to people there who would pay a lot to get their hands on the iPhone.

  45. morganlh85 says:

    On ebay and craigslist, I’m sure.

  46. ivanthepig says:

    Also, remember that Apple gave their employees iPhones as well. That would attribute to about another 17k+ iPhones that either got sold on eBay, or activated by employees, along with sales in the UK, and unlocked phones – the numbers would somewhat add up.

  47. m4nea says:

    I know about fifteen people in Canada with iPhones. I can imagine that the million missing iPhones have been activated by companies other than AT&T

  48. nox says:

    Is this another case of them saying sold when its actually how many they have shipped to the retail channel?

  49. petels says:

    Hey, I am in Australia and got a mate in GA to buy me three and ship them to me. Unlocking is a piece of cake and it costs me $45 per month from my Optus Cell carried to run. There is also a shop in Sydney that cells unlocked iPhones that work with any Australian SIM card.

  50. PølάrβǽЯ says:

    @Meg Marco: “Just where the hell are the rest of the iPhones?”

    I’m sure some of them are on T-mobile’s network.

  51. PølάrβǽЯ says:

    Yep, striking an exclusivity deal with AT&T was just a brilliant idea, Mr. Jobs. Now you have created a market specifically for the LEGAL unlocking of the iPhone. And this data only goes to prove that. As many have posted here, almost all of the 1.7 million unaccounted-for iPhones are being used on OTHER cell networks. Kudos, Steve.

  52. ludwigk says:

    There is a HUGE iPhone blackmarket. I’m really quite surprised how little attention its gotten from the media. Apparently none of you are aware of the fact that for months, tons of people would walk into the Apple Stores, buy the limit per person (usually 5) in CASH, and come back EVERY DAY doing this.

    This is why Apple had to reduce the limit per person to 2, AND refuse cash as payment for them so they could track purchases.

    They had to take measures to try to keep more iPhones on ATnT’s networks since they were their network parnter. Lots of these iPhones ended up being sold overseas, because the weakening dollar makes them much cheaper here.

    @ConnerC: The touch screen does indeed deactivate when holding the phone to your head, but if your proximity sensor is busted, and you unlocked your phone, Apple won’t service it.

  53. UpsetPanda says:

    This is a much smaller market to account for, but I saw the iPhone on NCIS (McGee had one) so I think a lot of studios buy iPhones to use for their shows.

  54. overbysara says:

    I love my iphone.

  55. JGB says:

    I’d buy one in a second, because, let’s face it..they are cool, but there is no way in hell I am going to be told where I have to get service. And, if I unlock it, I have a phone whose manufacturer is ACTIVELY trying to sabotage it! I was in the apple store the other day and they had a big sign behind the “geniuses” saying that if you brought your phone in for any reason, and it was unlocked, they were going to “update” it for you (IE, intentionally brick it). Whether you wanted them to or not. WTF?!?!?
    This is no different than buying a TV and Sony trying to tell you that you can watch only approved programming. You tried watching HBO instead of Showtime? TV shuts off permanently.

  56. Transient says:

    @JGB: So, say Apple makes the iPhone unlocked. You’re still not able to take it to Verizon or Sprint since they’re not GSM carriers. Are you still upset? Or is it the idea that it could brick that you’re bothered by?

    I understand the brick part being a pisser, but true carrier independence is an oxymoron in the US Cellphone market and a weak reason to boycott.

  57. 27spots says:

    I found 5,552 iPhones on eBay right now. You guys find the rest.

  58. Mr. Gunn says:

    snoop-blog: Um, I don’t know what your expectations of PDA are, but activesync, removeable storage or mass storage device functionality, and support for working with a large variety of file types are on my list of PDA qualities.

    The iphone is a ipod that can make calls, but is seriously short of other advanced smartphone functions.

  59. Witera33it says:

    There are definitely a million iPhones that have been jail-broken. I know someone that bought 6 iPhones to bring to France. International jail-breaking has to account for a whole bunch.
    I actually DO think that Jobs is creating a market for unlocked phones. I’m pretty sure that he would really want to have iPhones in the hands of everyone if he could. Apple has a long history of welcoming innovation with open arms. I can’t even count all the times they have bought innovative 3rd party software and integrated it into their system. The only reason that Apple has to have a strangle hold on iPhone activation is because of the exclusivity contract he had to sign just to get the phone on the market.
    @THEIRISHSCION You have it right. ATT is a stepping stone. I would kill for visual voice mail. I HATE the way voice mail works on average.

  60. Witera33it says:

    @ MR. GUNN I feel as though you have a very narrow view of PDA. It’s a personal digital assistant. The iPhone qualifies. It handles mail, schedules appointments, has a web browser, stock watcher, weather widget, music and a host of other entertainment options. It also synchs with your computer for your entertainment and scheduling needs. Its an assistant, just not yours.

  61. Myotheralt says:

    @melking1972: but what if you both have the same sister? then that only accounts for one iphone!

  62. ab3i says:

    I wouldn’t be surprised if there are a million+ unlocked iPhones outside of the US. When i was visiting India recently, unlocked iPhones were selling for approximately 850 USD, and they were always in demand. Some people were actually amazed that I hadn’t brought a few along with me to sell in the *gray market*.

  63. bkpatt says:

    I’m not sure how Jobs is considered the idiot here – call me crazy, but I’m pretty sure somewhere along the line he was aware that many people buy phones only to unlock them and use them with whatever carrier they want.

    Why do you think there weren’t such massive discounts on the iphone as there are with things like blackberries? Apple was going to make their buck either way the consumer went. Their price was a hedge bet that the consumer would do exactly what they did – unlock the damn things and move on. At the same time, they got money coming in from AT&T from the folks who did do it the intended way as a bonus.

    Apple walks away from either side profitably.

    Those iphone locks weren’t some big apple scheme, I hate to tell you, they were probably there only because AT&T demanded that Apple provide due diligence to keep the exclusivity with AT&T as the carrier. The further updates to try to re-lock the phone are just that – due diligence. Outside of that, Apple really doesn’t care. If they can prove due diligence, they still make money on the iphones being sold to be shipped overseas or unlocked for T-Mobile.

  64. nrwfos says:

    Maybe the iPhone is the new Beanie Baby – the new thing to collect in its original packaging to preserve its value.

    As for using them in movies and TV, that’s probably true. But nothing dates a movie like the phones that are used in them.

  65. Jaysyn was banned for: http://consumerist.com/5032912/the-subprime-meltdown-will-be-nothing-compared-to-the-prime-meltdown#c7042646 says:

    @mixerfx: Illegally? Are you high?

  66. JGB says:

    I have not bought a locked phone in years. I have four now (wife, 2 kids, and me) and none are locked. My wife is Belgian, so we go to Europe a lot, plus my job takes me to Asia. So, a locked phone is non-motherf#$%ing-starter. So, is a CDMA phone.

    I don’t even hold it against them that they sell them that way. I was just commenting on the fact that they are so intent on controlling these things after they sell them that they are releasing updates almost solely for the reason to destroy your unlocked phone.

    I can see buying one and unlocking it. I can’t see paying money to Apple and then having them declare war on me.

    If I take my 400 dollar phone in to the store because, oh I dunno, the battery is not charging and some genius poly-sci major with unfortunate facial hair deliberately destroys it, before all is said and done, I would probably end up tazered in the back of a police car.

  67. Anonymous says:

    I’ve seen at least two while in Uruguay amongst people I work with. They phones are definitely NOT activated on AT&T service, never were and never will be. So that accounts for two of ‘em…

  68. Mr. Gunn says:

    @Witera33it: Yeah, but all those things either require Wifi, or a mac to sync with. Why would you limit yourself to that when there are all kinda of phones and PDAs that have real 3G data connections, sync with a variety of platforms, and handle data files not sent as email attachments gracefully.

    In summary, THIS.

  69. firesign says:

    @Mr. Gunn: umm, the iphone synchs fine with a windows box also, just like the ipod. i understand your point, but facts is facts.

  70. Witera33it says:

    @MR. GUNN
    Um.. that link of yours just proves my point. Very mature, very open minded and forward thinking of you. And poorly informed as FIRESIGN pointed out.
    I have no need for 3G, other platforms, or file management on my phone. That’s what laptops are for. I don’t even own an iPhone. I was just saying that it is a PDA, and gave my reasons. I actually think that all of those swiss army devices are overkill.