History of iPhone

Exclusive Tying of iPhone to AT&T

When Apple initially released the iPhone on January 9, 2007, it was sold exclusively with AT&T (formerly Cingular) contracts in the United States. The tying arrangement between Apple's smartphone and a single service provider caused some controversy, bringing the concepts of jailbreaking and bricking into the mainstream debate over the future of smartphone technology.

History

After a year and a half of negotiations, Steve Jobs reached an agreement with the wireless division of the telecom giant AT&T (Cingular at the time) to be the iPhone's exclusive carrier. In return for five years of exclusivity, roughly 10 percent of iPhone sales in AT&T stores, and a thin slice of Apple's iTunes revenue, AT&T granted Apple roughly $10 a month from every iPhone customer's AT&T bill. In return, consumers were unable to use any other carrier without unlocking their device.

Apple retained complete control over the design, manufacturing, and marketing of the iPhone.

Since some customers were jail-breaking their iPhone's to leave the AT&T network, AT&T began charging customers an early termination fee of $175 if they were to leave the network before their contract was finished. Other companies such as Google complained that tying encourages a more closed-access-based wireless service.

Court cases

After iPhone was released, questions arose about the legality of Apple's arrangement, and in October 2007 two class-action lawsuits were filed against Apple, one in federal court and the other in state court. The suits claimed that Apple's exclusive agreement with AT&T violated California antitrust law. The suit was filed by the Law Office of Damian R. Fernandez on behalf of California resident Timothy P. Smith, and ultimately sought to have an injunction issued against Apple to prevent it from selling iPhones with any kind of software lock, in addition to $200 million in monetary damages. The plaintiffs of the Smith v. Apple Inc. case claimed that Apple failed to disclose their five-year agreement with AT&T to purchasers when they bought their iPhones with a two-year contract, citing the Sherman Act's prohibition on monopolization. The court has not yet rendered a decision in the case.

A second case was filed in the United States District Court for the Northern District of California in 2007. The plaintiff, Paul Holman, filed a complaint against Apple, Inc. and AT&T Mobility, LLC. Holman alleged that he was unable to switch carriers or change SIM cards without losing improvements to his iPhones to which he was entitled. The plaintiff similarly referenced the Sherman Act as being violated by the defendants. On July 8, 2010 the case was affirmed for class certification. On December 9, 2010 the court ordered a stay on the case, awaiting the Supreme Court's decision in AT&T v. Concepcion. This secondary case disputed whether a clause in AT&T's contract that limited complaints to arbitration, met the state's basic standards of fairness. On April 27, 2011 the Supreme Court ruled that AT&T did indeed meet the stat's standards of fairness.

Advertising

The first advertisement for iPhone, titled "Hello," aired during the 79th Academy Awards on February 25, 2007, on American Broadcasting Company (ABC). On June 4, Apple released four advertisements announcing a June 29 release date in 2007.

Domain name

On July 1, 2007, it was reported that Apple paid at least US$1 million to Michael Kovatch for the transfer of the iPhone.com domain name. Kovatch registered the domain in 1995, and the URL now redirects to Apple's iPhone page.

United States release

On June 28, 2007, during an address to Apple employees, Steve Jobs announced that all full-time Apple employees and those part-time employees that had been with the company at least one year would receive a free iPhone. Employees received their phones in July after the initial demand subsided.

Initially priced at US $499 and US $599 for the 4GB models and 8GB models respectively, the iPhone went on sale on June 29, 2007. Apple closed its stores at 2:00pm local time to prepare for the 6:00pm iPhone launch, while hundreds of customers lined up at stores nationwide.

In the US and some other countries, the Apple product could only be acquired with a credit card, precluding a completely anonymous purchase. There was no way to opt out of the data plan. iPhones, at first, could not be added to an AT&T Business account, and any existing business account discounts could not be applied to an iPhone AT&T account, restrictions which AT&T changed in late January 2008.

The Associated Press also reported in 2007 that some users were unable to activate their phones because, according to AT&T, "high volume of activation requests were taxing the company's computer servers." On Oct 29, 2007 the Usenet newsgroup misc.phone.mobile.iphone was created.

Early estimates by technology analysts estimated sales of between 250,000 and 700,000 units in the first weekend alone, with strong sales continuing after the initial weekend. As part of their quarterly earnings announcement, AT&T reported that 146,000 iPhones were activated in the first weekend. Though this figure does not include units that were purchased for resale on eBay or otherwise not activated until after the opening weekend, it is still less than most initial estimates. It is also estimated that 95% of the units sold are the 8GB model.

On January 11, 2011, Verizon announced during a media event that it had reached an agreement with Apple and would begin selling a CDMA iPhone 4. The Verizon iPhone went on sale on February 10, 2011.

During Apple's official unveiling of iPhone 4S on October 4, 2011 it was announced that Sprint would begin carrying the reconfigured CDMA iPhone 4 and iPhone 4S in the US on October 14. Cricket Wireless announced on May 31, 2012, that it would become the first prepaid carrier in the US to offer iPhone 4 and iPhone 4S, beginning June 22, 2012. A week later, Virgin Mobile USA became the second American prepaid carrier to offer iPhone 4 and 4S, announcing plans to release the phones on June 29, 2012. Due to T-Mobile USA's inability to provide iPhone to customers raised its subscription churn rate, put the unit in an "unsustainable position", and contributed to parent Deutsche Telekom's decision to sell it to AT&T in March 2011; T-Mobile began offering iPhone on April 12, 2013.

Media reports emerged in early August 2013 that announced that Apple would be launching its next iPhone model on September 10, 2013, but further details were not available. Brian Barrett, Managing Editor of the Gizmodo publication, speculated that either an upgraded version of iPhone 5 or a budget version would be released.

Outsized bills

Stories of unexpected billing issues began to circulate in blogs and the technical press a little more than a month after iPhone's heavily advertised and anticipated release. The 300-page iPhone bill in a box received by iJustine on Saturday, August 11, 2007 became the subject of her viral video, posted by the following Monday, which quickly became an Internet meme. This video clip brought the voluminous bills to the attention of the mass media. Ten days later, after the video had been viewed more than 3 million times on the Internet, and had received international news coverage, AT&T sent iPhone users a text message outlining changes in its billing practices.

Price drop outcry

On September 5, 2007, the 4GB model was discontinued, and the 8GB model price was cut by a third, from US $599 to US $399. Those who had purchased an iPhone in the 14-day period before the September 5, 2007 announcement were eligible for a US $200 "price protection" rebate from Apple or AT&T. However, it was widely reported that some who bought between the June 29, 2007 launch and the August 22, 2007 price protection kick-in date complained that this was a larger-than-normal price drop for such a relatively short period and accused Apple of unfair pricing.

In response to customer complaints, on September 6, 2007, Apple CEO Steve Jobs wrote in an open letter to iPhone customers that everyone who purchased an iPhone at the higher price "and who is not receiving a rebate or other consideration", would receive a US$100 credit to be redeemed towards the purchase of any product sold in Apple's retail or online stores.

iPhone 3G pricing model changes

With the July 11, 2008, release of the iPhone 3G, Apple and AT&T changed the US pricing model from the previous generation. Following the de facto model for mobile phone service in the United States, AT&T would subsidize a sizable portion of the upfront cost for the iPhone 3G followed by charging moderately higher monthly fees over a minimum two-year contract.

European release

On November 9, 2007, the iPhone was officially launched in Europe, in the United Kingdom and Germany. In the UK, sales go through the UK O2 unit of Telefónica, while in Germany, it is offered through Deutsche Telekom's T-Mobile division. As in the case of the previous launch in the US, customers lined up as much as a day in advance to obtain the much-anticipated phone.

Occasionally Apple produced a limited amount of 4GB iPhones for German and UK markets, but they never reached end customers and were used as in-store demo units. Later most of the units were disposed of.

However, the initial operating model of locking iPhone owners to one selected carrier has been controversial in Europe. In Germany, a competing operator, Vodafone, brought a legal case claiming that the arrangement was against German law. On November 20, 2007, an interim court order resulted in locked iPhone sales in Germany being temporarily stopped. The iPhone launch in France a few weeks later through the operator Orange faced the same legal issues. Other countries that will pose the same problems for the locked iPhone business model include Belgium, Italy, Finland, and Brazil.

On December 1, 2007, Tušmobil, the Slovenian mobile operator, started selling "unlocked" iPhones without an official contract with Apple. The offer caused confusion between Apple Europe, local media, and local Apple representatives.

On May 6, 2008, Telecom Italia announced that it had signed a deal with Apple to sell iPhones in Italy by the end of 2008. It was estimated that it would probably be the second generation iPhone with 3G-UMTS capability.

On May 27, 2008, TeliaSonera released a press release stating that it would start selling iPhones in Sweden, Norway, Denmark, Finland, Estonia, Lithuania, and Latvia during 2008.

On June 4, 2008, Movistar announced that it had signed a deal with Apple to sell iPhones in Spain beginning on July 11, 2008.

On August 22, 2008, Estonian mobile operator EMT started selling iPhones.

On August 22, 2008, Vodafone Greece released iPhones in the Greek market.

On September 26, 2008, Omnitel released iPhones in Lithuania.

On November 7, 2008, T-Mobile released iPhones in Croatia.

On September 29, 2010, Elisa released the iPhone 4 in Finland.

Southeast Asian releases

SingTel in Singapore and Globe Telecom in the Philippines were the first two carriers to launch the iPhone in Southeast Asia. Both carriers launched the iPhone 3G in August 2009.

On March 20, 2009, Telkomsel became the first telecommunications company in Indonesia to offer the iPhone 3G with customizable plans for all Telkomsel customers. In the same month, Maxis of Malaysia launched the same iPhone model and was later followed by DiGi.

On October 2011, StarHub also launched the iPhone in Singapore. Smart Communications followed suit in December 2011 by launching the iPhone 4S in the Philippines; they were the last telecommunications company to carry Apple's iPhone in Southeast Asia.

Australian release

The iPhone 3G was released in Australia on July 11, 2008.

New Zealand release

The very first iPhone 3G model released on July 11, 2008 was sold in Auckland, New Zealand to 22-year-old student Jonny Gladwell at 12:01 am NZST. The iPhone 3G was only available to customers on the Vodafone network. There was criticism from some New Zealand customers when Vodafone announced pricing for the iPhone 3G as they were the only network to offer this generation of iPhone.
The first-generation iPhone was only available for sale in New Zealand through parallel import stores soon after it went on sale in the US. The original models available for sale in New Zealand have been unlocked for use on the Vodafone network and could be used with any plan including pre-paid plans.
Subsequent launches of iPhone models in New Zealand have typically been a few weeks after the worldwide release. The iPhone 5's 4G LTE capabilities can only be used on Vodafone's 4G LTE network, as no other carriers have this capability yet.
On November 8, 2011, Telecom announced they would offer the iPhone 4S on their network along with earlier models, the iPhone 3GS and the iPhone 4 .

Canadian release

After months of high anticipation, the first iPhone to be released in Canada was iPhone 3G. Rogers Wireless began offering 8 GB and 16 GB models on July 11, 2008. Facing a public backlash, Rogers dropped the price of its service plan from CA$100 to CA$30 per month.

The iPhone 3GS, with the new iOS 3.0 operating system, was released in Canada by Rogers Wireless on June 19, 2009. Users who sign up for a 3-year agreement with a data option could choose between a 16 GB device for CA$199 and a 32 GB device for CA$299.

Bell and Telus Mobility announced their release of iPhone on November 4 and 5, 2009, respectively.

Non-exclusive deals

On May 6, 2008, Vodafone announced that they signed a deal with Apple to sell iPhone in Australia, Czech Republic, Egypt, Greece, Italy, India, Portugal, New Zealand, South Africa, and Turkey.

Subsequent announcements confirmed that Apple is moving away from exclusive one-carrier deals. Soon after Vodafone's announcement, TIM announced it would also be selling iPhone in Italy, on May 12, 2008 Optus confirmed it would sell it in Australia and SingTel confirmed that it would be selling iPhone in India through its Indian Joint Venture, Airtel.

On June 4, 2008, SoftBank Mobile released a press release stating that it will start selling iPhone in Japan during 2008.

Russia's second largest mobile operator, Beeline, announced on August 28, 2008, that they signed a contract with Apple to enter the Russian market by late 2008. The deal was rumoured to be non-exclusive, according to unofficial statements made by MTS and MegaFon. MTS and MegaFon belong to the so-called "Russian Big Three", and were expected to release the iPhone 3G simultaneously with Beeline. As predicted, MegaFon issued a press release regarding the iPhone 3G release on September 2, 2008. MTS, the largest Russian mobile network and CIS still hasn't released any statements.

On November 14, 2008, Vodafone Egypt and Mobinil started selling the iPhone 3G in Egypt. This came after Vodafone's deal with Apple Inc. earlier in May. iPhone 3G is priced at EG£3,800 and EG£4,600 for the 8 GB and 16 GB models respectively. Customers must also sign up for one of 3 service plans to use the phone.

On September 28, 2009, Orange announced that they were going to become the second operator of the iPhone in the UK. Therefore, an exclusive deal O2 had done since 2007 had ended. Orange later announced that the iPhone will be released on November 10, with pricing plans starting from £29.36 on contract and £440 for the 3GS 16GB on pay as you go. On the following day, Vodafone UK also announced that they will be selling the iPhone by early 2010, becoming the third UK network and Vodafone's 11th country to offer the iPhone.

Verizon Wireless

There had been ongoing speculation in the United States that Apple might offer a CDMA-compatible iPhone for Verizon Wireless. This speculation increased on October 6, 2010, when The Wall Street Journal reported that Apple would begin producing a CDMA-compatible iPhone, with such a model going on sale in early 2011.

On January 8, 2011, the Wall Street Journal confirmed that Verizon Wireless would officially announce on January 11, 2011, the launch of a CDMA-based iPhone for use on their network. The date in which the Verizon iPhone will go on sale was unknown though the two most recent iPhone releases were made available within weeks of their launch announcement. Verizon confirmed the announcement on January 11, with an on-sale date of February 10.

On January 11, 2011, Verizon announced that they would be carrying a CDMA version of Apple's iPhone 4 starting in February 2011. Existing Verizon Wireless customers could pre-order iPhone on February 3. Pricing for the iPhone 4 was $199 for 16GB and $299 for 32GB. The Verizon iPhone 5 released on Friday, September 19, in the United States; it was the first GSM unlocked iPhone, which worked on AT&T and other GSM networks.

World timeline

The international release of iPhone has been staggered over several months. Today, the iPhone is available in most countries.

† iPhone offered by multiple carriers under contract from Apple (country not carrier-exclusive)
‡ iPhone offered without contract and without carrier lock
§MVNO with O₂

Activation and SIM lock bypassing

iPhone normally prevents access to its media player and web features unless it has also been activated as a phone through AT&T or O2. On July 3, 2007, Jon Lech Johansen reported on his blog that he had successfully bypassed this requirement and unlocked iPhone's other features with jailbreaking. He published the software and offsets for others to use.

On August 14, 2007, Gizmodo reported verification of a method to bypass iPhone's SIM lock, allowing the phone to work freely with carriers other than AT&T. This method requires a Turbo SIM card costing approximately US$80 and essentially tricks iPhone into believing that it is operating on the AT&T network even when it is connected natively (not in roaming mode) to another carrier. Australian Personal Computer later published a ten-step guide to unlocking iPhone using the Turbo SIM method.

In mid-August, UniquePhones announced an unlocking service for iPhone, only to retract the service the following week after receiving a phone call from a lawyer representing AT&T.

On August 24, 2007, George Hotz, a 17-year-old hacker from Glen Rock, New Jersey, broke the lock that ties Apple's iPhone to AT&T's wireless network. He confirmed that he unlocked the phone and was using it on T-Mobile's network. The hack opened up a realm of possibilities for overseas customers because iPhone was only sold in the US at the time. By unlocking it, Hotz opened up the phone to all kinds of phone networks across the world. Hotz posted the hack on his blog. The process is complicated and requires both disassembling iPhone and executing software commands on a personal computer. Hotz, along with four others across the world, reportedly spent about 500 hours to unlock the phone.

Also, on August 24, 2007, Engadget reported, by way of photos and a video clip, that they were called by the "iPhoneSimFree" team to view a demonstration of unlocking iPhone using a software-only solution. Unlike Hotz's hardware hack, the code in this hack was not made available to the general public. Sales of the unlock started on September 10, by way of several resellers who were able to order "keys" from iPhoneSimFree which are then passed onto the customer to use the software.

On September 11, after only one full day of sales, the iPhone Dev Team announced that they had also created a working "software unlock", and released it to the public for free. Utilizing the existing unlock requires some technical knowledge, although a GUI-based version was under construction. Two free, GUI-based unlocking programs that have been made available are AnySim and iUnlock Reloaded.

On September 24, 2007 Apple issued a warning that future updates could render unlocked iPhones unusable. On September 27, 2007, owners of unlocked iPhones who took advantage of the version 1.1.1 update through iTunes reported that the update rendered the device virtually inoperable. There were also reports that the update even affected some iPhones that were not unlocked, and Engadget found that the firmware update had "bricked" unhacked iPhones as well. The firmware update relocks iPhones, but on October 11 iPhoneSIMFree announced that they had hacked the 1.1.1 iPhone update, not only unlocking them but also unbricking those iPhones which were bricked by the update.

On October 16, 2007, the iPhone Dev Team released AnySIM 1.1, the free utility that unlocks iPhones. The updated version works on firmware version 1.1.1, but doesn't fix baseband problems caused by updating an unlocked 1.0.2 phone up to 1.1.1.

On October 23, 2007, the iPhone Elite Dev-Team released Revirginizing Tool to rebuild the lock table in the seczone area to repair the damage done by the original anySIM 1.0x unlockers so unlocked 1.0.2 iPhones can upgrade to 1.1.1 without bricking iPhone. The tool is unbricking the previously bricked iPhones.

On November 21, 2007, T-Mobile announced that due to litigation commenced against them by their competitor Vodafone, which resulted in a preliminary injunction preventing T-Mobile from locking the SIM card to T-Mobile in Germany, it will sell the phone "unlocked" and will offer iPhone without a T-Mobile contract for €999 (US$1,478) at its shops to customers in Germany until the court renders a decision.

By the end of November, Apple released another version of iPhone firmware, 1.1.2. This version does not have many new features but breaks unlocks.

During Macworld '08, on January 15, Apple released the fifth version of iPhone firmware, 1.1.3; this version repairs loopholes used by "iPhone Hackers." The firmware, however, had been compromised prior to release and new security measures were quickly bypassed.

On February 8, 2008, Geohot released the first full software unlock for the 1.1.2 & 1.1.3 OTB iPhones.

For recent information see IPhone SIM unlocking.