1. It is rumored that the AT&T iPhone exclusivity is expiring this summer.
2. iPhone OS 3.2 running on iPad is not locked to any carrier.
3. AT&T’s pricing for data over 3G announced for the iPad is rather low compared to any other 3G plans in the US.
3. Apple has announced the availability of VoIP over 3G, to which AT&T had agreed a while ago. 
4. iPhone OS 4.0 will be a common platform for the iPhone, iPod Touch, and iPad.

I wonder if the above points are leading to iPhone OS 4.0 unlocking all iPhones in the US (carrier unlock) so that the iPhone can use a SIM card from any provider. Personally, I do not see any threat to AT&T’s bottom line if all iPhones became unlocked because if you bought an iPhone in the US, you are locked to AT&T via your contract. If you choose to use a T-Mobile’s SIM card, you are still paying AT&T your monthly contract fees.

The facts that AT&T has agreed to VoIP over 3G as well as lowered the 3G data plans to $15 per 250 MB and $30.00 for “unlimited” data on the iPad are HUGE, in my opinion. It may signal the new paradigm in the way AT&T will start treating data and that AT&T is warming up to the fact that customers will be using VoIP increasingly more for their voice needs while riding on the AT&T data network.

Therefore, is it feasible that iPhone OS 4.0 will provide carrier unlock for all US-sold iPhones? This would also discourage many from jailbreaking their phones just so they could take their iPhones with them while traveling abroad without having to pay exorbitant AT&T’s roaming fees ($2.50/minute or with the World Traveler fee of $5.99/month - $2.00/minute). 

Note: Incidentally, I have tested VoIP over 3G on my iPhone since it was announced a week ago, and it works great! At this point, I can reduce the usage of my monthly allotment of minutes per my AT&T contract by about 80% by utilizing VoIP over 3G. AT&T is obviously going to take a hit by people conserving the minutes and using VoIP over “unlimited” data that their iPhones come with. They knew this would happen and still they allowed it.

Clearly AT&T’s exclusive on the iPhone is no longer benefitting domestic handset sales. Now established as the premier smartphone handset, Apple has much to gain by opening the iPhone to other carriers and other modes for voice calls.

We’re already there in the UK. Although iPhones are carrier locked, Apple can unlock via iTunes at the carrier’s request. I don’t see why they wouldn’t leave this under control of the carrier; it’s worth a bit of subsidy. O2 will unlock on request, but for prepay (no contract) you have to wait.

It’s not really an OS function; it’s in the baseband, so no connection with OS v4 release.

Edit: The reason why Apple leaves this with the carrier, is both to give the carrier control over the customer service relationship, but also because voice contracts are where the puck was 5 years ago. Soon voice will be completely subsumed into data. The platform is in fact iPod/iPad; iPhone may continue to have a bolt-on GSM subsystem for the carriers for just so long as the carriers will pay for it. That carrier locked bolt-on is what the carriers buy with their subsidy. To start with, lots of carrier sweeteners are included, missing from iPod (microphone, speaker, GPS, compass, camera). But as the brutal power of Apple in this market becomes further established, expect those differences to slim down to nothing and the subsidies to roll on.

In the UK, the iPhone’s first exclusive carrier O2 (Orange and Vodafone now also carry it ) now offer to unlock your iPhone if you are under contract with them.

The logic is infallible: you’re already in hock to them for the duration of the contract. They might as well allow you to unlock it and keep you happy with them, so when you go abroad you can use a foreign SIM if you like. Or even use another UK provider if you like. After all, if you continue to pay O2 under their contract but you’re also subscribing to another network and are using their SIM instead, it means O2 win twice: they get your monthly subscription, but you’re not using their bandwidth if you’re using some else’s SIM.

It also has the double benefit of allowing existing O2 iPhone owners to unlock their device legitimately, sell their existing handset to an O2, Vodafone, or Orange customer (or as “officially unlocked, no jailbreak required,” to an international eBay buyer) and use the proceeds to buy the latest and greatest iPhone when it is released, even if you’re not entitled to buy it on subsidy because your contract hasn’t expired yet.

I see this becoming commonplace worldwide eventually.

Here in Spain the situation is horrible. Telefónica is the only carrier selling iPhones. 1 GB of data per month costs 25 euros. There is no real unlimited because they cut down the speed if you go over the limit. The cashier at the supermarket is paid 600 euros. Sure the 25 are cheap compared to other data plans - but hey it still is almost a days work at the supermarket.
There is a world outside the US. If you lived in Europe you would know how big the problem with locked phones is. Go ask any european citizen. The carrier lock simply prevents you from taking your iPhone along on your trip.
And if you think that once you have paid through the contract the iPhone is yours and you are free then you are in for a BIG surprise. Telefónica does not unlock your iPhone. It will stay locked to Telefónica forever. The same system is applied in Portugal by Vodafone. And the worst (for Apple) is yet to come: If you ask Vodafone for the reason of not unlocking the iPhone, the answer is “Apple does not allow us to unlock your iPhone”.
The only solution to this situation is: multiple carriers per country and - ultimately - selling the iPhone unlocked. The actual situation here in Europe is not feasable. People have to be able to at least move arround the continent without getting billed an arm and a leg for making phone calls. Let allone accessing data, which will cost you a kidney (up to 10 euros per MB in roaming).

ghobi - 03 February 2010 11:23 AM

If you ask Vodafone for the reason of not unlocking the iPhone, the answer is “Apple does not allow us to unlock your iPhone”.

Vodafone lies with the truth. True, Apple is the only one that can unlock your iPhone; Vodafone will never be allowed to do it. But false; if Vodafone wanted to offer unlocking, Apple would do it at their request the next time you sync with iTunes.

sleepygeek - 03 February 2010 11:36 AM

ghobi - 03 February 2010 11:23 AM

If you ask Vodafone for the reason of not unlocking the iPhone, the answer is “Apple does not allow us to unlock your iPhone”.

Vodafone lies with the truth. True, Apple is the only one that can unlock your iPhone; Vodafone will never be allowed to do it. But false; if Vodafone wanted to offer unlocking, Apple would do it at their request the next time you sync with iTunes.

In Germany, T-Mobile has no problem unlocking paid iPhones. It sure is the carrier who is not willing to set you free. Once you sign the contract, the carrier owns your (mobile)soul.

Tommo_UK - 03 February 2010 11:18 AM

The logic is infallible: you’re already in hock to them for the duration of the contract. They might as well allow you to unlock it and keep you happy with them, so when you go abroad you can use a foreign SIM if you like. Or even use another UK provider if you like. After all, if you continue to pay O2 under their contract but you’re also subscribing to another network and are using their SIM instead, it means O2 win twice: they get your monthly subscription, but you’re not using their bandwidth if you’re using some else’s SIM.

This could ease some of the strain on the AT&T network while T continues to collect its data fees. There’s virtually no risk and much potential reward in terms of reducing the data demand load on T’s system.

As far as the US goes.  The four major providers use different technology, so even if you unlock 3G service is only available on ATT.  T-Mobile is the other major GSM carrier in the US but they operate their 3G on a frequency not supported in the current baseband radio so if you use T-Mobile it would be Edge only.  Verizon and Sprint both use CDMA for Voice and EVDO for Data.  Verizon, Tmobile and ATT are moving to LTE in 2010-2015 timeframe and Sprint will be using WIMAX.  My bet is on Apple adding another device to support Verizon/Sprint via CDMA/EVDO, but if we don’t see that with the IPAD then I doubt we’ll see it this summer with the Iphone.

Sirozha, I was wondering how you make sure you use only the data side of AT&T’s network when you make a call over VOIP.  For example, when I am not in a wi-fi area, and I use any of the VOIP apps, such as Vonage, Truphone, or Call Global, the call goes out first to a US based phone number over the voice side of AT&T’s network, and from there goes over the internet.  But I am using my AT&T minutes for this, not my unlimited data.  Am I to understand that Skype plans to invent a mobile app that will use data and data only to route the calls?  If not, then will I have to buy an iPad and either use it for VOIP calls over data, or adapt the sim to fit in my iPhone?

zulu - 04 February 2010 01:58 AM

Sirozha, I was wondering how you make sure you use only the data side of AT&T’s network when you make a call over VOIP.  For example, when I am not in a wi-fi area, and I use any of the VOIP apps, such as Vonage, Truphone, or Call Global, the call goes out first to a US based phone number over the voice side of AT&T’s network, and from there goes over the internet.  But I am using my AT&T minutes for this, not my unlimited data.  Am I to understand that Skype plans to invent a mobile app that will use data and data only to route the calls?  If not, then will I have to buy an iPad and either use it for VOIP calls over data, or adapt the sim to fit in my iPhone?

You have to run a VoIP app and make a call from that app. Do not call from the regular iPhone dialer. What you are describing is a bunch of access numbers that some of those providers set up, which you can call via a regular phone (landline or cell phone) and then use it as an entry into their VoIP network.

The app I am using is Acrobits Softphone. It allows you to set up an account with any BYOD (Bring Your Own Device) SIP providers as well as with Vonage as a secondary line. I have never used Vonage, but my understanding is that Vonage does not allow to use your own SIP client (software or hardware) on the primary line. You have to purchase a device (ATA or router) locked to their service to get Vonage. However, once you have purchased that device and connected it to Vonage, they allow you to get a secondary line, with which you can use any SIP client. So, Acrobits Softphone can be used for that secondary line (they have a preset profile for Vonage).

However, I am using Acrobits Softphone to work with a Cisco Communications Manager Express (CME). I am a Cisco voice engineer and use a CME as my home phone system. I am establishing an IPSec tunnel to my home Cisco router from the Soft VPN client built into the iPhoe OS and then launch Acrobits Softphone that registers with my CME. My CME has a SIP trunk to one of the BYOD SIP providers (Callcentric). This way, I can make a call to any phone in the world using my Callcentric account or I can call any extension registered to my CME (any phone in my house as well as my relatives living in other countries). The calls to internal CME extensions are completely free. The calls to other numbers are billed according to my Callcentric plan (which is US 1.9 cents/min). I could get an unlimited Callcentric plan and call as much as I want for a flat monthly fee. I just choose to use a pay-per-minute plan on my Callcentric account. Incidentally, Acrobits Softphone has a preset profile for Callcentric, so you can use this application to register directly with Callcentric (without having to have a complicated setup like mine with IPSec VPN tunnels, CME, etc.). If you are into VoIP, you can also install an Asterisk server at home (as your home phone system) and use Acrobits Softphone to register with Asterisk. There are several BYOD SIP providers out there that are decent. I have tried several of them and found Callcentric to be the best.

This is another example that AT&T is undergoing a paradigm shift in the way they are approaching cellular service. They are becoming a 3G data provider and relaxing their hold onto regular cell phone calls. Now, Apple said they were going to use 20+ billion dollars in 2010 for operating expenses. I am starting to wonder if Apple is planning to invest heavily in AT&T to dramatically improve their 3G infrastructure. Otherwise, applications like Sling Player are going to completely kill the AT&T 3G network.
http://9to5mac.com/sling-3G-35493406

Apple will be using resources for working capital and investment.

I don’t see Apple investing heavily in cell infrastructure or co-venturing with AT&T to build infrastructure. There are already too many players that can provide what’s needed and both Verizon and AT&T are investing heavily as they lose landline customers by the minute. The exclusive arrangement with AT&T ends sometime this year and Apple can leverage the infrastructure of other partners to provide capacity for its customers.

Apple is investing heavily in a new data center and the continuing roll out of retail stores. There’s enough to keep Apple busy.

Sirozha, I am going to have to take your word on that!  From where I sit, it is going to simplify matters to just buy a 3G iPad and make and take my VOIP calls from there, when I am not in wi-fi, and cut back my minutes plan for the iPhone, to be used in places I just can’t carry the iPad around.  Unless of course adapting the iPad sim and sticking it in the iPhone would actually cause iPhone VOIP apps to use the data side of AT&T network only.  Will AT&T have designed a sim card that can use the data side only when adapted and stuck into an iPhone?  Maybe some enterprising app designer will partner with a good voice engineer to produce a VOIP app that ‘just works’ over the data side only.

zulu - 04 February 2010 10:30 AM

Sirozha, I am going to have to take your word on that!  From where I sit, it is going to simplify matters to just buy a 3G iPad and make and take my VOIP calls from there, when I am not in wi-fi, and cut back my minutes plan for the iPhone, to be used in places I just can’t carry the iPad around.  Unless of course adapting the iPad sim and sticking it in the iPhone would actually cause iPhone VOIP apps to use the data side of AT&T network only.  Will AT&T have designed a sim card that can use the data side only when adapted and stuck into an iPhone?  Maybe some enterprising app designer will partner with a good voice engineer to produce a VOIP app that ‘just works’ over the data side only.

I just don’t get it why you are thinking that making a VoIP call on the iPhone uses your voice airtime minutes. Unless you have a metered data usage, any data traffic from the iPhone is “unlimited”. When you are calling from a SIP app, you are either using your 3G data (if there is no Wi-Fi around or if you turn Wi-Fi off), or you are usign Wi-Fi. So, when you place a call from an app like Acrobits Softphone, you are not using your voice airtime. Using VoIP across 3G was not even allowed until last week. Once Apple made an announcement of this restriction going away, several SIP apps were able to make VoIP calls across 3G right away. I had been asked by Acrobits to test their Softphone app (ver 3.0) while it was in development late last year. I provided them with the Cisco CME platform for testing where they could run their app against my CME. It was on my advice that they integrated iLBC into their app (before that, there were only G.711 and GSM codecs available). When I contacted Acrobits last week inquiring about the VoIP calls over 3G, I was told that ver 3.0 already had the capability of placing VoIP calls across 3G built in, but every time you launch it, it has to get a permission from the Acrobits server to use this feature. Once Apple announced that the restriction on VoIP over 3G calls was lifted, Acrobits turned this feature on in their servers, and the Softphone app was immediately able to make VoIP calls over 3G. The next version of the Acrobits Softphone app will not be requesting the authorization from Acrobits servers but will automatically route calls across 3G when Wi-Fi is not available.

Sirozha, OK, I get it now!  Acrobits Softphone is one of several VOIP apps in the app store that is an SIP app, and thus can make non wi-fi 3G data calls.  The other VOIP apps which are not SIP, including Vonage Mobile, and Truphone, enable you to make non wi-fi international VOIP calls using your ATT 3G voice minutes to access a gateway phone number, which then goes to VOIP.  I don’t know if the upcoming Skype app will make 3G data calls, i.e. be an SIP app or not.  Now that I have made this leap in understanding, I will try to find out which SIP app will let me receive calls without having to have a fixed land line, which I just cancelled.  I cancelled it because it was used only for fax and cost $508/yr. and I hardly ever fax.  It appears that iCall, a free SIP app, will give you a personal number for $9.99 a month.  Looks like there are other free SIP apps in the store as well.  It will be interesting to see how many VOIP apps for iPad will soon become available.  Those will all be SIP of course, since the iPad 3G with ATT or any other carrier will have data (bits not minutes) plans only.  Thanks for your help.