I am no longer an iPhone Refusnik...but rather an iPhone Confusnik.
O.K., so I am now the owner of an expensive iPod that has the ability to take pictures that I need to perform a serious hack on if I want it to work inside of Wi-Fi hotspots if I choose NOT to commit myself to AT&T …
Context & Ripple Effects
Within days of the June 29 US launch, this corpus has tracked a parallel thread to the carrier story: using the iPhone without AT&T, from TUAW's July 3 take on a contract-free WiFi-enabled iPod to a July 4 post on running the iPhone without AT&T. Jeff Pulver — a telecom commentator whose run-ins with Apple launches go back at least to his Thanksgiving 2005 complaint about Steve Jobs — converts here from self-described refusnik to owner.
What makes the conversion notable is the fine print he accepts: without committing to AT&T, hotspot use requires what he calls a serious hack. That refusal sits inside a rocky launch window — Jobs publicly acknowledging AT&T's network weaknesses while keeping exclusivity, and activation failures reported on July 1 — plus a leaked, still-unconfirmed internal figure of more than 1 million AT&T activations.
First-order effects
- Buyers who skip the AT&T commitment turn the iPhone into a Wi-Fi-only device — Apple collects the hardware sale while AT&T gets no recurring revenue from that unit.
- AT&T's newly launched Wi-Fi broadband service in Riverside, California lands as the exact complement for these uncommitted owners, making public hotspots part of the iPhone experience by default.
Second-order effects
- If hacked, contract-free use spreads beyond a few bloggers, AT&T's exclusivity economics erode at the margin: it bears the network and activation burden while part of the installed base pays it nothing.
- Every activation outage and porting complaint from launch week hands rival carriers a ready-made argument against the locked-and-exclusive model Apple chose for its first handset.
Third-order effects
- The pattern suggests exclusivity deals hold only as long as the lock-in is technically enforceable — sustained hacker workarounds invite either softer carrier terms or, eventually, regulatory attention to handset unlocking.
- Wi-Fi-first usage among contract-skippers foreshadows a split market where the same device is sold as a subsidized phone to most buyers and as a hotspot computer to those willing to hack it.
The trend: Flagship phone launches are hardening into carrier-exclusive bundles, and each enforcement gap pushes a slice of demand into hacked, contract-free use that tests how much lock-in carriers can keep.