Apple’s business model under pressure

Derrick

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Apple have pursued a business model based on endorsing a sole provider to distribute their iPhone but this model may be facing increasing pressure as over one quarter of their phones in the US are being used on networks other than their chosen network provider.

According to Reuters, over a quarter of iPhones are being used on networks other than AT&T, which is the exclusive carrier in the US.

In the Reuters article, Bernstein Research analyst Toni Sacconaghi said analysis of sales numbers from Apple and AT&T Inc revealed about 1.45 million phones were “missing in action” at the end of 2007.

“About 480,000 of those were believed to be held by AT&T as inventory, leaving another 1 million phones, or 27 percent of the total, that Sacconaghi said were ‘unlocked’ so they could work on non-AT&T networks,” reported Reuters.

Consumers appear to be sending Apple a message, they don’t like being dictated to and if Steve Jobs has his head screwed on straight he’ll take heed and loosen the restraints.
 
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