# Warning for potential iPhone buyers



## GrapeApe (Aug 4, 2004)

I took a drive down to Syracuse today from Ottawa to visit the Apple Store and buy an iPhone.

I had heard some people had difficulty buying one with a credit card because Apple was trying to prevent Canadians from buying them so I made sure to bring U.S. cash.

So I got to Carousel Centre around 10:30 am went up to the Apple Store, looked around a bit first and then went up to the cash to ask for an iPhone.

The clerk goes back and gets me one, but then asks.

"How are you paying?"

"Cash", I say.

He then tell me to hang on a sec and head back into the stock room for a minute or two. He reemerges a few minutes later to tell me that his manager told him they are *no longer accepting cash for iPhone purchases, debit or credit only*.

Well needless to say I was floored, I reminded the clerk that it was *illegal to not accept cash*, hence why every bill in Canada and the U.S. is inscribed with "this note is legal tender".

He said it wasn't his call so I asked him to bring his manager out.

The manager came out and told me he had just gotten an email this morning (Saturday) from Apple HQ instructing all stores to not accept cash.

I explained to him that he was breaking the law but he wouldn't budge.

I asked him why they were not accepting cash and his explanation was that some people are buying up iPhone only to turn around and sell them, which makes no sense because requiring a credit card doesn't prevent this.

My fiancee asked him how someone might purchase an iPhone if they had no credit or debit card, for example if a kid wanted to save up his allowance and come in to buy one (keep in mind most Americans don't have debit cards, they are not nearly as prevalent as in Canada). The manager said he didn't know.

Although I had a credit card to use, I didn't offer it because a) the principle of the thing pissed me off and b) I didn't want him to know I was Canadian.

Anyway, the manager was being a real jerk, so I left and went to the AT&T Store where they accepted my cash no questions asked and I got my iPhone, which I made sure to display prominently as I walked past the Apple Store on my way back.

So be warned, if you are going to the States to buy an iPhone they are treating the damned things like state secrets or something.

I plan to call Apple and voice my displeasure at their policy, which is not only incredibly customer unfriendly but blatantly illegal.


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## WorldIRC (Mar 7, 2004)

GrapeApe said:


> I took a drive down to Syracuse today from Ottawa to visit the Apple Store and buy an iPhone.
> 
> I had heard some people had difficulty buying one with a credit card because Apple was trying to prevent Canadians from buying them so I made sure to bring U.S. cash.
> 
> ...


I'd report that to the "consumer board" of NEW YORK / Syracuse / State Dept if possible...I'm SURE that is a Federal Offense to not accept cash.. Now, one can REFUSE BUSINESS..but to merely refuse....the MOST SECURE PAYMENT that one could pay (no chance of Fraud) is just beyond me.


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## kloan (Feb 22, 2002)

Geeze, what's up with all of this don't sell to Candians BS?? It seriously makes no sense.. I read somewhere that Canadians were making up something like 20% of all sales of iPhones.

I could understand if they were running out of stock and wanted to sell only to Americans so they would get their cut of the AT&T contracts, but surely that's not the case.

Seriously, it's that kind of crap that really makes my blood boil... _ohm...... ohm.... ohm..... ohm........_

k.... i feel better now....


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## WorldIRC (Mar 7, 2004)

If Apple pulls that crap on me in the US, I will go straight to the Apple Account Exec of Canada (who I know)..and deal with it that way....


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## zoravar (Oct 19, 2007)

I went to the apple store in buffalo to buy my iPhone, and i used credit. I didn't mention I was canadian until he asked for my zip code. He then started on this whole disclaimer on the warranty and hacking the phone, and how there's no service and it's illegal (how?  ) to use hacks.

other then that i had no issues. I took cash with me as well, incase i needed to get someone else to go in the store and buy it for me..

My only hassle was at the border on the way to the U.S.  They pulled me over, searched me and my car, asked for proof for my story (how do you prove you're driving to a mall to buy a cell phone, before you even get there?  ). no hassles on the way back to canada.


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## WorldIRC (Mar 7, 2004)

zoravar said:


> I went to the apple store in buffalo to buy my iPhone, and i used credit. I didn't mention I was canadian until he asked for my zip code. He then started on this whole disclaimer on the warranty and hacking the phone, and how there's no service and it's illegal (how?  ) to use hacks.
> 
> other then that i had no issues. I took cash with me as well, incase i needed to get someone else to go in the store and buy it for me..
> 
> My only hassle was at the border on the way to the U.S.  They pulled me over, searched me and my car, asked for proof for my story (how do you prove you're driving to a mall to buy a cell phone, before you even get there?  ). no hassles on the way back to canada.


Oh never tell them "buying a phone". Just say shopping! Anyways, I have multiple zip codes so that's never been an issue for me! My GF and Father live in the US.


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## GrapeApe (Aug 4, 2004)

I was completely dumbfounded that Apple would go so far as to break the law to control iPhone distribution.

If anyone has any emails or phone numbers of some higher ups at Apple I can can please let me know.

I was planning to buy a new iMac but I cannot fathom a company treating its customers so poorly and then giving them more money.


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## WorldIRC (Mar 7, 2004)

[email protected]

I'm serious


[email protected] Has been hinted at being his actual email..but [email protected] should get Higher Level Customer Relations for ya!


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## John Clay (Jun 25, 2006)

GrapeApe said:


> Well needless to say I was floored, I reminded the clerk that it was *illegal to not accept cash*, hence why every bill in Canada and the U.S. is inscribed with "this note is legal tender".
> 
> He said it wasn't his call so I asked him to bring his manager out.
> 
> ...


I would like to point out that, contrary to popular belief, it is *not* illegal to refuse cash as payment for a good or service. There is no Federal mandate requiring businesses to accept cash as payment.

Source: U.S. Treasury - FAQs: Legal Tender Status of currency

Get your facts straight before accusing a company or person of breaking the law.

That said, it is foolish of Apple to reject cash as payment. As said above, there are many Americans without debit or credit cards, and many that use just cash.


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## monokitty (Jan 26, 2002)

There would be so fewer problems if Canadians just waited for the Canadian-version of the iPhone instead of losing their patience. For a product unsupported in Canada, some of us sure go out of our way of trying to obtain said product and blame the company of said product for all the problems we encounter mid-route.

I can't say I feel any sympathy on the horizon.


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## SINC (Feb 16, 2001)

GrapeApe said:


> Well needless to say I was floored, I reminded the clerk that it was *illegal to not accept cash*, hence why every bill in Canada and the U.S. is inscribed with "this note is legal tender".
> 
> So be warned, if you are going to the States to buy an iPhone they are treating the damned things like state secrets or something.
> 
> I plan to call Apple and voice my displeasure at their policy, which is not only incredibly customer unfriendly but blatantly illegal.


It always astounds me when ignorance is posted as fact.

If you don’t know the facts, why post totally wrong information?

*There is no law in either Canada or the USA that forces any person or business to accept cash for the sale of any goods or services.

Geez folks, get it right or get off your soap boxes.

Here is the law in the USA, and if you want me to look up the same law for Canada, I’ll be happy to oblige:*

Question: I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal?

Answer: The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."
This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. *There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise.* For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

SOURCE:
U.S. Treasury - FAQs: Legal Tender Status of currency


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## SINC (Feb 16, 2001)

WorldIRC said:


> I'd report that to the "consumer board" of NEW YORK / Syracuse / State Dept if possible...I'm SURE that is a Federal Offense to not accept cash.. Now, one can REFUSE BUSINESS..but to merely refuse....the MOST SECURE PAYMENT that one could pay (no chance of Fraud) is just beyond me.


Given my earlier post, it is "beyond me too".


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## SINC (Feb 16, 2001)

GrapeApe said:


> I was completely dumbfounded that Apple would go so far as to break the law to control iPhone distribution.
> 
> If anyone has any emails or phone numbers of some higher ups at Apple I can can please let me know.
> 
> I was planning to buy a new iMac but I cannot fathom a company treating its customers so poorly and then giving them more money.


Go ahead, make a fool out of yourself. See my post regarding cash payments and the law.


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## GrapeApe (Aug 4, 2004)

Who is Apple to say I can't buy something, even if I want a really expensive paper weight, what is it to them?

As for whether it is legal, you can nitpick if you like, but I don't see how that makes the situation much better in terms of how they are treating their customers.

What if I were an American wanting to buy an iPhone with no debit or credit card?

The bottom line is that there is no good reason whatsoever to not allow cash sales, none.

I thought AT&T would be the difficult ones but they sold me the phone no problem.

Apple is really tarnishing their good customer service rep with this iPhone stuff.


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## monokitty (Jan 26, 2002)

WorldIRC said:


> I'd report that to the "consumer board" of NEW YORK / Syracuse / State Dept if possible...I'm SURE that is a Federal Offense to not accept cash.. Now, one can REFUSE BUSINESS..but to merely refuse....the *MOST SECURE PAYMENT* that one could pay (no chance of Fraud) is just beyond me.


Most secure? Hardly. I doubt Apple store cashiers run their cash through an anti-fraud detection machine while they print your receipt.


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## GrapeApe (Aug 4, 2004)

SINC said:


> Go ahead, make a fool out of yourself. See my post regarding cash payments and the law.


Sorry, but please explain how this changes the fact that it is **** poor customer service?

Of course that is assuming there is no New York State law, which I will be looking into.

Have fun defending Apple though, you seem to be enjoying it.


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## WorldIRC (Mar 7, 2004)

My $1 US bill says..and I quote, "This note is legal tender for ALL debts, public and private"

I believe that is a constitutional marking no?


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## monokitty (Jan 26, 2002)

GrapeApe said:


> What if I were an American wanting to buy an iPhone with no debit or credit card?


SOL? Seriously. Going these days without either of one of those cards places you in the stone age. If you can't have either one of those cards, I doubt your need or ability for an iPhone. There is reason not to have a credit card for some people, but I can't see justification for not even having a simple debit card, which everyone gets by default when they open a standard checking account with any major bank.


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## monokitty (Jan 26, 2002)

WorldIRC said:


> My $1 US bill says..and I quote, "This note is legal tender for ALL debts, public and private"
> 
> I believe that is a constitutional marking no?


For 'all' debts, _if_ accepted by the seller. That marking signifies that the bill is legal tender, not a binding contract between the respective owner of the bill and a seller or business to accept said bill.

We've already established by both John Clay and SINC that no business is obligated to accept cash as payment.


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## John Clay (Jun 25, 2006)

WorldIRC said:


> My $1 US bill says..and I quote, "This note is legal tender for ALL debts, public and private"
> 
> I believe that is a constitutional marking no?



Perhaps you better reread that link from the Treasury Department.


> There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services.


U.S. Treasury - FAQs: Legal Tender Status of currency

This means that a business can REFUSE CASH AS PAYMENT FOR GOODS OR SERVICES. There is NO legal obligation to accept cash (Unless a State mandates it).


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## SINC (Feb 16, 2001)

Seems to me some people just don't get it.

NO PERSON OR BUSINESS IN EITHER CANADA OR THE USA IS LEGALLY BOUND TO ACCEPT CASH IN EXCHANGE FOR GOODS OR SERVICES.

Got it now?


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## GrapeApe (Aug 4, 2004)

Lars said:


> SOL? Seriously. Going these days without either of one of those cards places you in the stone age. If you can't have either one of those cards, I doubt your need or ability for an iPhone. There is reason not to have a credit card for some people, but I can't see justification for not even having a simple debit card, which everyone gets by default when they open a standard checking account with any major bank.


That is a pretty elitist remark.

Many people *choose *not to have a credit card, and as I mentioned previously, debit cards are not nearly as prevalent in the U.S. as in Canada, most U.S. "debit" cards run off of credit cards, their system is completely different from ours.

I still would like all these constitutional experts to explain to me, regardless of whether it is legal or not, how refusing cash is in any way a decent way to treat customers.


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## WorldIRC (Mar 7, 2004)

It's a poor decision....to not accept cash...especially as that country is seriously in debt now, you'd figure, they would want money ...but that's another thread


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## SINC (Feb 16, 2001)

Here’s some rather startling news for you as well:

“*Ottawa will no longer accept cash payments from people paying their taxes at service counters across the country.*

The Canada Revenue Agency says it will still accept cash payments made through banks, however. Service counters will continue to accept cheque and debit payments.”

Your View: Cash no longer accepted for paying taxes


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## GrapeApe (Aug 4, 2004)

SINC said:


> Here’s some rather startling news for you as well:
> 
> “Ottawa will no longer accept cash payments from people paying their taxes at service counters across the country.
> The Canada Revenue Agency says it will still accept cash payments made through banks, however. Service counters will continue to accept cheque and debit payments.”
> ...


Not a great example because there still is a way for people to pay their taxes with cash, via their bank.

Is there a reason you are intent on beating the same point over and over?

I was trying to help some people out by warning of some poor customer service and business practices by Apple, but somehow it has turned into a debate about the U.S, Treasury.

Again, please explain, how does any of this changes the fact that it is an incredibly consumer-unfriendly practice?


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## SINC (Feb 16, 2001)

GrapeApe said:


> Again, please explain, how does any of this changes the fact that it is an incredibly consumer-unfriendly practice?


OK. Sure. It's their legal right. Got it?


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## Demosthenes X (Sep 23, 2004)

You're grasping at straws there, Sinc. It being legal does not make it any less unfriendly to consumers. You're being awfully 'holier than though" rubbing it in GrapeApe's face that he was mistaken about the role of cash currency... a pretty easy mistake to make when written right on the bills is the phrase "legal tender for all debts". You've said repeatedly that GA was wrong - we get it. Step off your high horse and stop hounding the issue. I highly doubt you've been correct about every statement you've ever made in your life, so cut your fellow posters some slack.


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## SINC (Feb 16, 2001)

Orders from Daffy Duck "does not make it any less unfriendly " to me. 

A request I might consider, but orders? Nope.


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## mirkrim (Oct 20, 2006)

SINC said:


> Orders from Daffy Duck "does not make it any less unfriendly " to me.
> 
> A request I might consider, but orders? Nope.


Seriously, did you just have the worst day ever? Cuz you're really being a jackass in this thread.


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## SINC (Feb 16, 2001)

Stop to think about it for heaven's sake. There are people reading this thread who might make total jackasses of themselves if they made a scene in a retail store armed with very bad information. If pointing out a serious misconception about currency and who should accept it is being a jackass in your opinion, so be it. My bet is there are some who will say, "I didn't know that", to themselves and be the wiser for the experience.


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## mirkrim (Oct 20, 2006)

Well the first time you were pointing out a serious misconeption. Then you started replying to every single post, trying to shut people down with condescending phrases like "ok. sure. got it?"

Whatever floats your boat, dude.


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## iMatt (Dec 3, 2004)

GrapeApe said:


> Who is Apple to say I can't buy something, even if I want a really expensive paper weight, *what is it to them?*


Here's what it is to them: $216 ($9/month x 24 months). 

That's the revenue they will miss out on when somebody buys an AT&T-locked iPhone and fails to activate it using one of the iPhone-specific AT&T packages. 

That is why Apple is taking extraordinary steps to make sure as many iPhones as possible are activated on the intended network. Trying to prevent Canadians from buying them is obviously a huge part of that. While some Americans will also hack them to work on other networks or even with other AT&T plans, Canadians are an obvious "leak" that's relatively easy to plug. And if it's true, as someone posted, that 20% of iPhones are coming north (highly dubious figure, IMO), Apple is in big trouble and you can expect anti-hacking measures to get more frequent and draconian.

So, not only is Apple free, like any other business, to refuse your money, it's in their best interest to do so.

On your other main point: I doubt refusing cash will really affect a whole lot of US customers. The number of people in the target market without debit or credit must be tiny. And they would probably get a manager to relent by showing proof of US residence.


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## Demosthenes X (Sep 23, 2004)

SINC said:


> Stop to think about it for heaven's sake. There are people reading this thread who might make total jackasses of themselves if they made a scene in a retail store armed with very bad information. If pointing out a serious misconception about currency and who should accept it is being a jackass in your opinion, so be it. My bet is there are some who will say, "I didn't know that", to themselves and be the wiser for the experience.


Did someone **** in your cornflakes, Sinc? John Clay had already pointed out that GA was mistaken, without feeling the need to beat people over the head with it in every post. The internet might make you anonymous, but it does not give you free reign to be an asshole. If all you're going to do is attack your fellow posters, then don't bother posting. I know, I know, the 20 000 posts make you feel good... but no one's going to be impressed once they realize that it's just 20 000 posts of being a jerk.


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## adagio (Aug 23, 2002)

I've been reading plenty of jerks lately but I'll tell ya.... SINC isn't one of them.

What I HAVE been reading is a bunch of spoiled brat punks who are obviously used to kicking and stamping their feet and getting their own way. It must be quite a shock to some that the real world isn't nearly so kind and willing to give in to the "I WANT".


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## (( p g )) (Aug 17, 2002)

About what was supposed to be the main point of this thread before people started resorting to personal attacks...

...it's never a wise idea for any retailer to turn away paying customers, but Apple is within the law to do so.


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## striaghtryder (Oct 5, 2007)

i was denied an iphone at the Apple store in seattle......

They asked me to see proof of U.S residence. 

Some people here didn't believe me. Cause they know everything. 

I waited outside the store and asked some kid to purchase it for me with cash. 

This happend last Sunday.


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## GrapeApe (Aug 4, 2004)

I thought this was a helpful community, but from what I can tell it is a bunch of Internet know-it-alls.

If buying an iPhone and unlocking it isn't *YOUR* thing, why do you feel compelled to put other people down who may enjoy it?

If you want to wait until Rogers brings it out (who know when that will be), that's your prerogative, but why bash other because of it?

And I hardly think that expecting a company to accept cash for the purchase of something qualifies as me as "spoiled brat punks who are obviously used to kicking and stamping their feet and getting their own way".

Where do you get the idea that expecting someone to accept *CASH*, _the foundation of our financial system_, is being spoiled?

You must be the same type of person who thinks it is reasonable for companies and governments to do whatever they want and we should just sit back and take it.

I came on here to *help others*, so they wouldn't waste a trip down to the U.S., yet all I get is a holier than thou attitude.

And they wonder why people hate Mac fanbois.


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## striaghtryder (Oct 5, 2007)

GrapeApe said:


> I thought this was a helpful community, but from what I can tell it is a bunch of Internet know-it-alls.
> 
> If buying an iPhone and unlocking it isn't *YOUR* thing, why do you feel compelled to put other people down who may enjoy it?
> 
> ...



POINT TAKEN!!!! 

Just cause im new to this forum and make a dumb post, kidding about enjoying my iphone... such as not showering, meeting girls, not paying attention to my girlfriend... people here take it so serious that its scary. 

Can't even poke fun at yourself without people geting offended. 

Go watch Star Wars ONE MORE TIME!!!


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## kloan (Feb 22, 2002)

iMatt said:


> Here's what it is to them: $216 ($9/month x 24 months).
> 
> That's the revenue they will miss out on when somebody buys an AT&T-locked iPhone and fails to activate it using one of the iPhone-specific AT&T packages.
> 
> ...


Omg, there's that 'argument' again.

How do you guys think this is logical? The only reason that this would be an issue is if they're running out of stock. Otherwise, they can STILL SELL ANOTHER iPHONE TO SOMEONE WHO WILL SIGN THE CONTRACT. 

They get revenue from BOTH purchases!


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## iMatt (Dec 3, 2004)

kloan said:


> Omg, there's that 'argument' again.
> 
> How do you guys think this is logical? The only reason that this would be an issue is if they're running out of stock. Otherwise, they can STILL SELL ANOTHER iPHONE TO SOMEONE WHO WILL SIGN THE CONTRACT.
> 
> They get revenue from BOTH purchases!


 

This 'argument' has been made persuasively several times by several people, and your best response so far has been whatever.

Why is it that Apple isn't selling unlocked phones? And why are they trying to keep them out of Canada? Why are they bricking hacked phones? Do you think it's all out of spite and control-freakishness?

*Every* iPhone is sold with the expectation of Apple receiving that $9/month. Every iPhone that isn't activated means that revenue never comes in. *The up-front retail price is a loss-leader (edit: or something similar to one) with the remainder of the price coming in over two years. By not activating it, you're not paying the full price Apple planned to receive.*

It's blazingly obvious that they're doing everything they can to protect that revenue stream. Trying to stop Canadians from buying, bricking unlocked phones, you name it. 

Here's a real-world example to prove the point: France. By law, exclusive deals with carriers are not allowed in that country. So, as long as you can prove French residency, you will have two options: locked iPhone for $X, or unlocked iPhone for $X+Y.

Why do you think the unlocked phone costs more? The missing monthly subscription revenue.

BTW, for the record I don't care if Canadians want to buy iPhones, unlock them, and so on. It's your choice, your time, your money, your risks, etc. But you should at least understand why Apple doesn't want you to buy one, doesn't want you to unlock one, and will keep hounding you (via software updates) as long as you have it: money, money, money.


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## Oakbridge (Mar 8, 2005)

kloan said:


> Omg, there's that 'argument' again.
> 
> How do you guys think this is logical? The only reason that this would be an issue is if they're running out of stock. Otherwise, they can STILL SELL ANOTHER iPHONE TO SOMEONE WHO WILL SIGN THE CONTRACT.
> 
> They get revenue from BOTH purchases!


But they are in effect, being forced to discount the one purchase by $216 or whatever their revenue from the AT&T contract is. 

If you run your sales projections, take into account the cost of manufacturing and the revenue from all sources for the product. You then can make an informed decision on what to charge for the product.

If something comes along that disrupts the revenue stream, you have to re-examine what your are charging, or do something to product the revenue stream. 

Why do you think that ink-jet printer manufacturers release new printers every year that take an entirely new form of cartridge? They don't want to lose the revenue stream to the third party cartridges.

On that note, walk into a Staples store and ask for a Staples brand cartridge for your HP printer. I'll bet they don't have any. They used to sell them, but they took them off the market. I wonder why? Rumours are that HP made a deal with Staples to persuade them not to sell third party cartridges. 

What has HP done in this situation? They have taken measures to protect their revenue stream.


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## GrapeApe (Aug 4, 2004)

But that only makes sense if the supply is so limited that Americans who want an iPhone can't get one, that is currently not the case.

If there is an American out there who wants an iPhone and who wants to pay AT&T (and Apple) a monthly fee then there is an iPhone out there for them to purchase.

Extra phones going to Canadians still represent revenue for Apple, less revenue, but revenue nonetheless.

Of course none of this justifies not accepting cash, the Apple Store in Syracuse had no idea I was Canadian, so their refusal to accept my cash simply lead to a lost sale for their store.

Heck AT&T loses far more from phones going to Canada than Apple does, yet they accepted my cash no questions asked.


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## striaghtryder (Oct 5, 2007)

Im GOING TO CALL an Apple Store in the U.S and ask, "Are you allowed to sell to Canadians?"

Someone randomly select one..... I'll call. 

And post what they say.... :clap:


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## Oakbridge (Mar 8, 2005)

GrapeApe said:


> I thought this was a helpful community, but from what I can tell it is a bunch of Internet know-it-alls.
> 
> If buying an iPhone and unlocking it isn't *YOUR* thing, why do you feel compelled to put other people down who may enjoy it?
> 
> ...


I'm not trying to put people down but I am getting tired of the foot-stomping, temper-tantrums being posted about Apple shouldn't do this, and shouldn't do that. 

As I have stated over and over again. Any Canadian resident who has purchased and is using an iPhone is doing so at their own risk. The product is not a product available for sale in Canada. I'm not 100% sure but I do believe that this is not Apple's wishes. I do believe that Apple would love to sell the product here but Roger's is not about to give up their highly over-priced revenue for data. 

So Apple doesn't have to agree to sell you the product, nor does it have to support it if it fails to work. You are not using it in the manner in which it was intended, i.e. with an AT&T account. 

Apple has every right to protect their product, just as they protected the original Mac from being 'opened up' like DOS and then Windows was. This was a tough decision to make back in the 80's and yet I believe it was one of many reasons why viruses are so prevalent on the Windows side and rare on the Mac side.

So to those who continue to whine about what Apple is doing, two choices: either accept the risks or find another product until Roger's decides to accept the terms and conditions that Apple has set out.


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## billwong (Jan 6, 2002)

It can be done.

I purchased an iPhone from the Apple Store in San Francisco last week - was warned that it would not work outside of the USA. I told them it was for my son who was attending school in the area (plenty of Universities there). They gladly took my credit card (maybe they liked my AMEX card). Plus they helped me out with some accessories (cases and screen films).

I just unlocked it today, got back to Toronto yesterday. Works great. It was firmware 1.0.2.


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## kloan (Feb 22, 2002)

Yeah, but did they come to the $399 price only with the firm belief that they could offer it at that price because they would get the added revenue from the contract? Does the lack of that contract actually detract from their profit? How much does it cost to make an iPhone? They're still making a profit no matter what. I still don't see how by selling more than projected that they're losing profit. If they planned on selling 10,000 units only to AT&T customers, and they sell an additional 2,000 to non-AT&T subscribers, how is that affecting their profit?


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## iMatt (Dec 3, 2004)

GrapeApe said:


> But that only makes sense if the supply is so limited that Americans who want an iPhone can't get one, that is currently not the case.


It doesn't matter if every American who wants one can get one, and it doesn't matter if phones are being unlocked in the U.S., Canada, or on Mars. Every non-activated unit was effectively sold for $216 less than the planned price.



> Extra phones going to Canadians still represent revenue for Apple, less revenue, but revenue nonetheless.


What portion of the profit on a $600 item do you think $216 represents? I'm guessing it's somewhere in the vicinity of all of it.

That's why Apple is making you pay a price in the form of hassles to acquire and use an unlocked phone. If they can't have your money, they will make life difficult for you and, more importantly, send a warning to everyone else so as to minimize future unlocks.

If you are willing to accept reduced functionality/no access to new features, time spent applying unlocks, etc., that's just your way of paying the extra charge even though it isn't cash in Apple's coffers.



> Heck AT&T loses far more from phones going to Canada than Apple does, yet they accepted my cash no questions asked.


If it's true that the phone is not subsidized by AT&T (a claim often made), that means the entire "subsidy" (upfront discount in exchange for contract) consists of Apple's deferred $216, and AT&T loses nothing in the deal. To them it's just as if you never bought one in the first place.


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## iMatt (Dec 3, 2004)

kloan said:


> Does the lack of that contract actually detract from their profit?


Of course it does. Otherwise they'd just sell them unlocked in Canada for the same price and meet the obvious pent-up demand, Rogers be damned. (Though that would create the need to block Americans from buying them, in order to protect its U.S. exclusive deal with AT&T.) Again, I point you to France: locked price is lower than unlocked price.


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## kloan (Feb 22, 2002)

It's all speculative, because no one has actually spoken with Apple and gotten the actual facts. This poor horse...


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## Demosthenes X (Sep 23, 2004)

Without knowing Apple's actual cost to produce and sell an iPhone, it's all speculation whether they're actually losing money on its sale without a contract. But since it's an electronic device, I'm inclined to believe there's not a lot of profit built into the actual cost of the unit itself. The profit is in the plan. I think there probably was lots of profit in the iPhone device when it was $599, but at $399, I doubt there's much, if any.

Which would mean that every iPod sold to a Canadian not only does not generate revenue, but potentially loses revenue (if the actual production cost of the device is higher than the retail cost). That's why Apple wants to curb sales to Canadians.

But I would encourage people to stop posting definitive statements like "it's a loss leader" when we can only speculate to how much the device actually costs to produce... for all we know, they could sell the iPhone for $299 and still profit from the sale of the device.


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## iMatt (Dec 3, 2004)

kloan said:


> It's all speculative, because no one has actually spoken with Apple and gotten the actual facts. This poor horse...


Well, after googling around a little more it seems the $9/month figure may just be somebody's educated guess, but there's no doubt Apple is getting monthly payments from AT&T, and O2 in the UK (by some estimates as much as 40% of the monthly fees in that case), and is insisting on similar deals from carriers elsewhere. 

One analyst estimated (key word) the AT&T deal was good for an increase of .02 on Apple's earnings per share this year (about $17 M in profit), .15 next year (about $130M) and .58 within two years (about $500 M, all rough calcs based on 869M shares now in circulation). Granted, this is a drop in the bucket for a company that's making over $4 billion a year.

Piper: AT&T sharing subscription fees with Apple

There is also the publicly disclosed (by Apple) fact that iPhone sales are being booked on a 24-month subscription basis, but apparently this is so they can deliver new features via software update without charging separately (due to accounting rules in the US). Still, it's an interesting coincidence that the accounting window is the same as the contract duration.

Add in all the other circumstantial evidence (bricking, attempts to stop Canadians from buying, etc.) and it's hard to escape the conclusion that Apple is trying to keep that phone out of your hands in order to protect its profits.


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## iMatt (Dec 3, 2004)

Demosthenes X said:


> But I would encourage people to stop posting definitive statements like "it's a loss leader" when we can only speculate to how much the device actually costs to produce... for all we know, they could sell the iPhone for $299 and still profit from the sale of the device.


Point taken (and edit to come). However, the larger point would still stand even if iPhones were being given to Apple for free by manufacturers: a phone untied from AT&T represents planned revenue that fails to materialize.


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## WorldIRC (Mar 7, 2004)

It's one thing to make "profit" but companies still have margins to uphold. There are many small businesses that go out of business because they don't understand the difference between a margin and a markup. It's one thing to markup the iPhone from "cost", but if it is selling below the intended "margin", then one can't "stay" in business. Now for Apple, its only an issue on the one item..but think about other retailers?

Go to Futureshop. IF they started giving 15% discouns on everything, their margins would no longer be met and would eventually, not have ENOUGH profit to pay their bills. It's one thing to make profit, its another thing to make ENOUGH profit to invest, expand, give raises, etc....


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## JVRudnick (Aug 28, 2007)

Just got back from San Francisco. On Sat afternoon, down near Union Square at the big Apple store, I bought an iPhone, for cash. Was NEVER asked by the guy behind the counter for any id, info etc. etc. He very cheerfully counted out the $436 I paid (incl state tax etc) and gave me a brand new iPhone. No fuss, no muss, and at customs in TO last nite, the guard just shrugged and said "fine...." and I walked into Canada, paying not a dime extra.

That all said, I must add that at that Apple store there must have been like 300 customers...all using row after row after row of Macs, iPods, WIFI devices, iPhones etc etc. etc. Staff in those black Apple shirts must have been like 600....they were EVERYWHERE....this is my first Apple store visit and the "hustle and bustle" was pretty amazing!!!



Jim

PS....I'm a PC guy, having given up macs when I owned the ci model....miss them tho!


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## striaghtryder (Oct 5, 2007)

> at customs in TO last nite, the guard just shrugged and said "fine...." and I walked into Canada, paying not a dime extra.


lol.... same thing happend to me. 

customs asked to see it... said, "hmpf, i want one. Go ahead.":clap:


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## billwong (Jan 6, 2002)

When I returned from SF with my iPhone, also on Saturday - we may have been on the same flight - Canada Customs didn't even ask what we were bringing back. Certainly the focus of Canada Customs has not been the value of personal goods one brings over the border. They have more important tasks to deal with.

Did you notice the UK Apple employees at the SF Apple Store - training for the UK launch of the iPhone. Must be nice to travel to the far side of another continent for such "training". They probably toured One Infinite Loop as well.


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## JVRudnick (Aug 28, 2007)

You know...I wondered about that...ie the UK staff. All I thought at the time was that Apple ran short of US shirts and gave out some UK ones to staff. Never actually "heard" any of them chatting so didn't realize that they were/are UK folks....

Great store tho, eh? I was pretty impressed!



Jim

PS OIL is okay...but Napa and wine tasting were MUCH better!


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## Trevor... (Feb 21, 2003)

I use one of these when pressed for US plastic, Simon Malls | More Choices - The Prepaid Visa debit Gift Card and Visa Gift Account from Simon.com
The service charge was only $2 and it has never been declined.


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## automat (Oct 27, 2007)

GrapeApe said:


> ... so I left and went to the AT&T Store where they accepted my cash no questions asked ....


can someone please confirm that AT&T stores are still accepting cash. A friend of mine is going a trip to boston and is (was) going to bring me one to Greece. Can also someone tell me if it is possible to get a prepaid debit card if you are not American? 

thanks a lot


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## imachungry (Sep 19, 2004)

GrapeApe said:


> I thought this was a helpful community, but from what I can tell it is a bunch of Internet know-it-alls.
> 
> If buying an iPhone and unlocking it isn't *YOUR* thing, why do you feel compelled to put other people down who may enjoy it?
> 
> ...


Thank you for your post. This board in particular is stacked with jackass know-it-alls who do seem to forget that we're coming together to help each other, not show how brilliant we are in front of our computer screens (I wonder how many of you are in real life--or don't you get out). 

I think this is a perfectly valid thread and a seriously bad precedent, legal or not. Piecemeal prevention of people buying the phones is just ridiculous.

Either way, some of you need to get your heads out of your ass. Be humble and help someone, otherwise stick to the political threads.


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## imachungry (Sep 19, 2004)

Trevor... said:


> I use one of these when pressed for US plastic, Simon Malls | More Choices - The Prepaid Visa debit Gift Card and Visa Gift Account from Simon.com
> The service charge was only $2 and it has never been declined.


Good suggestion, thanks.


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## GrapeApe (Aug 4, 2004)

Well looks like it's official.

Apple imposes new limits on iPhone sales - Yahoo! News

Regardless of the legality of the move, this is a horrible customer service move and it's a shame that Apple is alienating its customers to prevent a few people from re-selling on eBay.


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## Oakbridge (Mar 8, 2005)

GrapeApe said:


> Well looks like it's official.
> 
> Apple imposes new limits on iPhone sales - Yahoo! News
> 
> Regardless of the legality of the move, this is a horrible customer service move and it's a shame that Apple is alienating its customers to prevent a few people from re-selling on eBay.


If the contents of this New York Times' blog article are correct, you may want to rethink that statement.

The article is suggesting that Apple is receiving as much as $18 on average per month from AT&T for each iPhone that is activated. This more than doubles the previous estimates which were in the $6-9 range. 

If a company plans a new product and expects to see a certain amount of revenue from a product (i.e. $831 over 2 years) and that revenue is cut, then it most certainly would look to find ways to prevent the revenue from being lost. I don't think anyone would blame them. It's like if you have an agreement with an employer or with a client for a certain amount of income/revenue and then something happens which cuts that in half, you'll take steps to get it back. 

Having said that, yes I am an owner of an unlocked iPhone. However I have said all along that I will be one of the first to sign up with Rogers if and when they finally get their head out of the sand and offer a plan that is similar to what is being offered by AT&T and now the European carriers of the iPhone.


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## GrapeApe (Aug 4, 2004)

You are completely missing the point, treating all of your customers like thieves is never a good PR move.

You are looking at it from the unlocker angle, but what about from the angle of the legitimate U.S. citizen who wants an iPhone, wants to sign up with At&T but can't pay cash?

Not everyone has a credit card and debit cards are not nearly as prevalent in the U.S. as they are in Canada. In fact, most U.S. debit cards are tied to credit cards making them even more difficult to obtain.

Not accepting cash is no way to treat your customers, assuming everyone is trying to screw you out of revenue is not a good way to think of your customers.


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## absolutetotalgeek (Sep 18, 2005)

Unf$%kin' believable. Is there no end to the s$%t Apple will sling at it's customer base? Refusing cash??!! :-( 

_Without prior publicly visible notices in their stores informing customers they are no longer accepting cash they are in an illegal position._ section 5103 of title 31 of the U.S. Code. Legal Tender Statute.

Morons...tptptptp


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## adagio (Aug 23, 2002)

GrapeApe said:


> You are completely missing the point, treating all of your customers like thieves is never a good PR move.


It would seem approx 250,000 buyers so far ARE thieves.

The product was meant to be sold and used in the USA only. I agree, Apple screwed up. They should have demanded immediate activation at either an Apple retail store or an AT&T outlet. They tried to be nice and give owners a convenient activation process and it has come back to haunt them.


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## SINC (Feb 16, 2001)

absolutetotalgeek said:


> Unf$%kin' believable. Is there no end to the s$%t Apple will sling at it's customer base? Refusing cash??!! :-(
> 
> _Without prior publicly visible notices in their stores informing customers they are no longer accepting cash they are in an illegal position._ section 5103 of title 31 of the U.S. Code. Legal Tender Statute.
> 
> Morons...tptptptp


Here we go again with people posting wrong information.

For the record, again I repeat:

Here is the law in the USA, and if you want me to look up the same law for Canada, I’ll be happy to oblige:

Question: I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal?

Answer: The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."
This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. *There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise.* For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

SOURCE:
U.S. Treasury - FAQs: Legal Tender Status of currency


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## guytoronto (Jun 25, 2005)

SINC said:


> Here we go again with people posting wrong information.


Come on SINC, you should know, people like to make stuff up just to support their position. When it comes to retail sales, refunds, policies, pricing, people will make up just about anything to support their position.

This whole 'Retailers MUST accept cash' is just the latest. People are either too lazy or too stupid to really educate themselves.


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## GrapeApe (Aug 4, 2004)

guytoronto said:


> Come on SINC, you should know, people like to make stuff up just to support their position. When it comes to retail sales, refunds, policies, pricing, people will make up just about anything to support their position.
> 
> This whole 'Retailers MUST accept cash' is just the latest. People are either too lazy or too stupid to really educate themselves.


It's a common misconception and the fact that refusing cash isn't illegal is somewhat mind-boggling.

But again, legal or not, that doesn't change the fact that it is poor customer service and highly unnecessary.


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## guytoronto (Jun 25, 2005)

GrapeApe said:


> It's a common misconception and the fact that refusing cash isn't illegal is somewhat mind-boggling.


Not at all. Fear of counterfeiting. People who want to pay with thousands of pennies. Credit/Debit Only express lines at stores. Lots of reasons why forcing stores to take cash is a bad idea.



GrapeApe said:


> But again, legal or not, that doesn't change the fact that it is poor customer service and highly unnecessary.


Define 'highly unnecessary'. Highly unnecessary in your view, or Apple's? I would suspect that the last thing Apple wants to do is alienate customers, so I figure there's got to be a reason they say 'No Cash'. Oh, right. It's because 1/4 of all iPhones sold are being illegally unlocked, depriving Apple of their 'service commissions'. Hmmm...so tell me. If you ran a business, and a quarter of your sales were fraudulent purchases depriving you of maximum profits, would you change your stores policy? I think you would. Start thinking like a business, and less like a whiny consumer. There are enough of them out there.


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## kloan (Feb 22, 2002)

guytoronto said:


> illegally unlocked


it's not illegal.


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## GrapeApe (Aug 4, 2004)

guytoronto said:


> Not at all. Fear of counterfeiting. People who want to pay with thousands of pennies. Credit/Debit Only express lines at stores. Lots of reasons why forcing stores to take cash is a bad idea.
> 
> 
> Define 'highly unnecessary'. Highly unnecessary in your view, or Apple's? I would suspect that the last thing Apple wants to do is alienate customers, so I figure there's got to be a reason they say 'No Cash'. Oh, right. It's because 1/4 of all iPhones sold are being illegally unlocked, depriving Apple of their 'service commissions'. Hmmm...so tell me. If you ran a business, and a quarter of your sales were fraudulent purchases depriving you of maximum profits, would you change your stores policy? I think you would. Start thinking like a business, and less like a whiny consumer. There are enough of them out there.


/sigh

I'll say it again, *IF* there were shortages of iPhones for those who wished to sign up for AT&T I could see the necessity.

However right now it is not hard to find an iPhone, so Apple is not losing anything by selling extra phones that would otherwise go unsold. Yes they make *LESS* money on each phone, but they still make money.

If I want to buy the phone just to use as a fancy paperweight, that is my right. If they wanted all phones on the AT&T network then they shouldn't let you leave the store without signing up for a plan.

The iPhone is selling well, but not well enough that potential AT&T subscribers are having trouble finding one. Both the Apple Store and the AT&T Store had plenty in stock when I went in.

As for not accepting cash your examples are all highly extreme. 

Yes there are debit/credit only lines at supermarkets, but they still have other lines that take cash. 

Yes some people counterfeit, but there are ways to easily spot fake money and it is generally not a good idea to treat all your customers as criminals.

Yes some people could try to pay with all coins, but that is hardly a reason to not accept bills.

Regardless of whether or not you think Apple has the right to prevent people from hacking their phones (legally they don't), I don't understand how anyone could not see this move of not taking cash as a serious blow to consumer rights, again not to mention a terrible PR move.

But considering how many Americans, and it seems more and more Canadians, feel about protecting their rights and bending over for corporations and governments, I guess I shouldn't be surprised that some people think this is not a big deal.


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## Trevor... (Feb 21, 2003)

adagio said:


> They should have demanded immediate activation at either an Apple retail store or an AT&T outlet. They tried to be nice and give owners a convenient activation process and it has come back to haunt them.


No... they allowed unactivated sales because AT&T only pays commission on in-store activations and not hardware sales.

online activation = they don't pay commission on the sale = more money for AT&T


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## GrapeApe (Aug 4, 2004)

OK now this is getting stupid.

Apple not just refusing cash, also refusing Apple Gift Cards for iPhones - Engadget

I'd like to see someone defend that, you encourage people to buy your gift cards and then limit what they can buy with them?

There is no refund on a gift card, so if little Jonny got an Apple gift card for his birthday to buy an iPhone he's S.O.L, he has to buy another Apple product in order to get his money back, even if he doesn't want any other Apple product.

I personally think this may be the move that gets someone to challenge them in court, you can't offer up gift cards as a payment method and then refuse them.


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## iMatt (Dec 3, 2004)

GrapeApe said:


> /sigh
> 
> I'll say it again, *IF* there were shortages of iPhones for those who wished to sign up for AT&T I could see the necessity.
> 
> ...


All else aside (and I agree with you 100% on the gift cards, for example), this part of your argument still makes no sense.

I'm skeptical about the $18/month figure, but if it's anywhere near true it seriously undermines the assumption that there's much if any profit on an unlocked unit. 

Even if there is a profit on those units, it's still very obvious that it's in Apple's interest to try to stem the tide of unlocking. It's more in their interest to sell 1000 locked phones than it is to sell 1000 locked phones plus 200 unlocked ones.

With the no-cash move they've done something that will annoy some loyal customers, but it's far less annoying than the more obvious move of requiring activation before the customer leaves the store/receives the phone. I suspect the basic reason they don't do that is logistics: complications to online sales, extra time in-store reps must spend with customers, harder to buy one as a gift, etc. 

That said, I doubt refusing cash will have a major impact. I suspect they mainly want to stop people who are buying, unlocking and reselling in bulk. This move (plus reducing the limit from 5 to 2 per customer) will make it harder for those people to do business, but it's hardly an insurmountable obstacle.

As for the gift-card thing... that's just stupid.


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## GrapeApe (Aug 4, 2004)

OK, assuming I agree with your stance on cash, which I don't, my argument would be that one led to the other.

You let them start refusing cash, then it's gift cards, what's next?

"Sorry you can only use an Apple-branded VISA card."

It is bad for cunsumers and really, really bad PR.


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## guytoronto (Jun 25, 2005)

ehMac needs to upgrade their servers, software, or both.


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## guytoronto (Jun 25, 2005)

ehMac needs to upgrade their servers, software, or both.


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## guytoronto (Jun 25, 2005)

GrapeApe said:


> OK now this is getting stupid.
> 
> Apple not just refusing cash, also refusing Apple Gift Cards for iPhones - Engadget
> 
> I'd like to see someone defend that, you encourage people to buy your gift cards and then limit what they can buy with them?


Ok, here goes. Apple wants a complete paper trail for who their are selling iPhones to. Cash doesn't cut it. Gift cards don't cut it. Credit cards are the only way they can get their paper trail.

Also, since activation of a cellular phone requires you to have credit, it's very easy for Apple to say "No credit card? How did you expect to activate it with AT&T then? No phone for you!"



GrapeApe said:


> There is no refund on a gift card, so if little Jonny got an Apple gift card for his birthday to buy an iPhone he's S.O.L, he has to buy another Apple product in order to get his money back, even if he doesn't want any other Apple product.


This could be a potential problem. I would say that Apple needs to make it very clear at the time of gift card purchase that they cannot be used for certain products, like iPhones. Until they have that procedure in place, they should offer refunds on gift cards.



GrapeApe said:


> I personally think this may be the move that gets someone to challenge them in court, you can't offer up gift cards as a payment method and then refuse them.


It all depends on the terms and conditions printed on the gift cards.


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## Oakbridge (Mar 8, 2005)

I also agree with the gift-card thing. However whenever I see a company do something like this, I call it 'New Coke'. They've reacted, and unfortunately they haven't thought it through 100%. The 'little Johnny' example is perfect. 

Now having said that, remember that in order to get cell phone service, in 'most' (not all) cases you're going to be required to have a credit card anyway. So the 'little Johnny' example becomes much less of an issue.

Yes AT&T has provided other methods to own an iPhone and activate it on their network without a valid credit card (i.e. using the Visa/MC 'gift cards'), but the reality of things are that it's only a small percentage of their customer base who will opt for this. 

So now the entire idea of no cash/no gift cards becomes less of an issue. Note that I said less and that I didn't say it eliminates it completely.

And I wish that those of you who say that Apple is "still making money" would wake up and realize that they are losing money every time an unlocked iPhone is sold. If you were an hourly employee and your employer cut your hours in half, would you just accept it? You wouldn't be losing money would you? You'd still be paid the same hourly rate. But most of us would look at it as losing money and if we counted on that certain amount of money, we'd take whatever steps were needed to get it back, either by finding a new job which gave us more hours, or taking on a second job to fill in the slack. 

Apple is simply taking steps to get that missing revenue back. 

If you don't like it, don't buy. It's as simple as that.


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## GrapeApe (Aug 4, 2004)

The iPhone is available on a Pay-as-you-go plan in the U.S., no credit card or credit check required.


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## Meleemark (Mar 3, 2007)

Oakbridge said:


> I also agree with the gift-card thing. However whenever I see a company do something like this, I call it 'New Coke'. They've reacted, and unfortunately they haven't thought it through 100%. The 'little Johnny' example is perfect.
> 
> Now having said that, remember that in order to get cell phone service, in 'most' (not all) cases you're going to be required to have a credit card anyway. So the 'little Johnny' example becomes much less of an issue.
> 
> ...


You are forgetting the dozen or so "Pay as you go" plans that AT&T offers.

Apple isn't losing money from unlocked phones, their revenue is reduced to only a point of sale prospective, and I can guarantee that the iPhone was not sold as a lost leader. 

I would argue that these new purchase requirements for the iPhone are being mandated to Apple from ATT, as they are missing all of their potential revenue source whenever an iPhone is unlocked, but again, they ARE NOT losing money whenever a phone jumps off their grid.


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## iMatt (Dec 3, 2004)

GrapeApe said:


> OK, assuming I agree with your stance on cash, which I don't, my argument would be that one led to the other.
> 
> You let them start refusing cash, then it's gift cards, what's next?
> 
> ...


My stance on cash is simply that I understand why they're doing it, and that it's not going to make a whole lot of difference either to unlockers or to ordinary customers who intend to keep it locked. 

What I find bizarre about this thread is that you started it with clear, convincing evidence that Apple is trying to make it harder for unlockers to buy iPhones. You've helped keep it going with more and more evidence that Apple doesn't want unlockers at the iPhone party. Other people have added evidence and plausible arguments that catering to unlockers is not in Apple's interest.

And yet you've somehow clung to the belief that unlockers are good for Apple. I just don't get it. That's really the only thing that keeps me posting here. 

Refusing cash is bad PR? Sure, I agree. Refusing gift cards? Even worse. But you don't have to support those moves to understand that there is a lot of money at stake for Apple, leaving them little option but to take the PR hit until they find a more effective way of thwarting unlockers.


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## Meleemark (Mar 3, 2007)

iMatt said:


> My stance on cash is simply that I understand why they're doing it, and that it's not going to make a whole lot of difference either to unlockers or to ordinary customers who intend to keep it locked.
> 
> What I find bizarre about this thread is that you started it with clear, convincing evidence that Apple is trying to make it harder for unlockers to buy iPhones. You've helped keep it going with more and more evidence that Apple doesn't want unlockers at the iPhone party. Other people have added evidence and plausible arguments that catering to unlockers is not in Apple's interest.
> 
> ...


The only thing that Apple has done by implementing these restrictions is limit the iPhone unlockers to US citizens only.

The quarter of a million iphones that have gone to people not able, willing or outside of the ATT service area HAS been good for Apple. Maybe not as good as selling 250,000 phones locked into the ATT service agreement, but its still profit never the less.


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## iMatt (Dec 3, 2004)

Meleemark said:


> The only thing that Apple has done by implementing these restrictions is limit the iPhone unlockers to US citizens only.


It doesn't even accomplish that, as this board shows Canadians still finding ways. 

But the most obvious goal (to me, anyway) is to make it harder for US citizens to buy them in bulk for reselling; the limit of two per customer seems to be the big stick in that effort.

I'm not saying these restrictions will completely prevent unlocking, just that Apple has every motive to try to reduce the number of unlockers as much as possible.



> The quarter of a million iphones that have gone to people not able, willing or outside of the ATT service area HAS been good for Apple. Maybe not as good as selling 250,000 phones locked into the ATT service agreement, but its still profit never the less.


You are assuming there is profit on an unlocked unit. (If your assumption is based on iSuppli, it's faulty -- doesn't include costs like software development, marketing, overhead, etc.) You are also assuming that if there is a profit, that's all that counts. If I sell my widgets for 1% more than it costs to make them, that's "still profit" but I'll soon be out of business.


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## Meleemark (Mar 3, 2007)

iMatt said:


> I'm not saying these restrictions will completely prevent unlocking, just that Apple has every motive to try to reduce the number of unlockers as much as possible.


What reason (aside from trying to placate ATT) could Apple have in trying to limit (they are dreaming if they think they are going to stop completely) iPhones from getting unlocked?


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## Meleemark (Mar 3, 2007)

iMatt said:


> I'm not saying these restrictions will completely prevent unlocking, just that Apple has every motive to try to reduce the number of unlockers as much as possible.


What reason (aside from trying to placate ATT) could Apple have in trying to limit (they are dreaming if they think they are going to stop completely) iPhones from getting unlocked?


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## iMatt (Dec 3, 2004)

Meleemark said:


> What reason (aside from trying to placate ATT) could Apple have in trying to limit (they are dreaming if they think they are going to stop completely) iPhones from getting unlocked?


Have you missed the part where AT&T is paying a monthly cut to Apple for every activated iPhone? It's not (mainly) about placating AT&T, it's about protecting a revenue stream that goes *directly to Apple's coffers*.


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## Meleemark (Mar 3, 2007)

iMatt said:


> Have you missed the part where AT&T is paying a monthly cut to Apple for every activated iPhone? It's not about placating AT&T, it's about protecting a revenue stream that goes *directly to Apple's coffers*.


You mean the revenue stream that wouldn't exist for those 250,000 iphones if an unlock option wasn't available.....


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## Meleemark (Mar 3, 2007)

iMatt said:


> If I sell my widgets for 1% more than it costs to make them, that's "still profit" but I'll soon be out of business.


Actually, you wouldn't.

Any company that releases a product or service and doesn't incorporate a per unit spread of costs for R&D, staffing, marketing, etc deserves to be out of business.

Let's use your rather arbitrary number. 
1% of 400 dollars=4 dollars
1.2 Million iPhones x $4 = 4.8 million dollars

Not bad for, what, 6 months.

Now, we have 250,000 phones that have been sold to unlockers. 
250,000 / 1,200,000 = 20.8% * $4.8 million = $998,400

Just under a million dollars (@ 1%, I'd bet that it's closer to 15%). Not bad at all for Apple's books.


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## mikeinmontreal (Oct 13, 2005)

I haven't read all the posts in this thread, but here is my situation. My wife's friend went to NYC on the weekend. She bought me an 8GB iPhone at the Apple Store and was told 2 only lifetime. She went on to an AT&T store to see if there were any 4GBs lying around. There weren't any of course, but she could have bought some 8GBs if she wanted. Better success rate with AT&T in the U.S. than in the Apple Stores. My buddy who bought me a 4GB in Dallas at an AT&T had to give an email address. Both phones were purchased with CCs.


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## iMatt (Dec 3, 2004)

Meleemark said:


> You mean the revenue stream that wouldn't exist for those 250,000 iphones if an unlock option wasn't available.....


This has now come full circle, so this is the last thing I have to say on this particular point:

The only real evidence we have (Apple's actions, the knowledge that there are monthly fees going back to Apple) all points to one conclusion: given the choice between selling a phone for unlocking and selling no phone, Apple would rather not sell the phone.

There is no evidence for the other position, just a handful of people saying "selling a phone for a lower profit is better than selling none at all!" Sorry, that just sounds like rationalization to me. Nobody outside Apple knows how much of the total profit/unit is tied up in the monthly revenues, but we do know that if those revenues don't materialize, extra manufacturing capacity has gone to making a unit that's much less profitable than planned. If the $18/month number is anywhere near correct, it's quite conceivable that virtually *all* the profit is supposed to come from those revenues.

One more time: buy and unlock to your heart's content, for all I care. But please stop trying to convince yourself you're doing Apple a favour. It doesn't wash.


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## brycejmcewen (Oct 16, 2007)

"But considering how many Americans, and it seems more and more Canadians, feel about protecting their rights and bending over for corporations and governments, I guess I shouldn't be surprised that some people think this is not a big deal."

I missed the "Right to Buy Apple Products with Cash" in the Charter of Rights and Freedoms...

Canadian charter of rights and freedoms

As far as I can tell, as long as they tell you "No Cash" in both French and English, it's all good...:lmao: 

It's bad customer service because the policy wasn't made available to the public when it took affect- not because of the policy in general. If I was the OP, I'd be pretty pissed that I drove all that way to be told no cash. But there's no reason they can't have this policy to protect their bottom line.


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## GrapeApe (Aug 4, 2004)

brycejmcewen said:


> "But considering how many Americans, and it seems more and more Canadians, feel about protecting their rights and bending over for corporations and governments, I guess I shouldn't be surprised that some people think this is not a big deal."
> 
> I missed the "Right to Buy Apple Products with Cash" in the Charter of Rights and Freedoms...
> 
> ...


I would love to point out all the things that are wrong with this post, but considering how badly you misinterpreted what I said there really is no point.


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## brycejmcewen (Oct 16, 2007)

Please enlighten me. I want to learn about consumer rights. Seriously.


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## GrapeApe (Aug 4, 2004)

brycejmcewen said:


> Please enlighten me. I want to learn about consumer rights. Seriously.


The fact that you even joked about the "Right to Buy Apple Products with Cash" and linked to the Charter tells me a decent conversation can't be had.

If you think a giant corporation throwing its weight around to protect extra profit is a justification for squashing the little guy then I doubt there is much point to trying to convince you otherwise.

Funny how if Microsoft did the same thing they would be getting crucified in the media.


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## motoyen (Aug 15, 2001)

I can understand why Apple is trying to limit the sales of the iPhone. I'm in Bangkok right now and there are literally hundreds of iPhone's for sale. All the phones are unlocked and hacked to allow a variety of games and apps, there is even a Thai language kit available. Price now now is hovering around 20000THB/$558.


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## kloan (Feb 22, 2002)

Hey, that's pretty good! I'm gonna let me friend know.. he's in Bangkok as well.


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## Elric (Jul 30, 2005)

As a manager of an independent store, I can refuse any sale I want. Cash, Credit, Debit, Pocket Lint. I don't have to sell if I don't want to... mind you it would be incredibly stupid to do so, but I COULD. Just cause you have cash doesn't mean anyone HAS to sell you anything.


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## mirkrim (Oct 20, 2006)

Wow, I can't believe this thread is still going.



brycejmcewen said:


> It's bad customer service because the policy wasn't made available to the public when it took affect- not because of the policy in general. If I was the OP, I'd be pretty pissed that I drove all that way to be told no cash. But there's no reason they can't have this policy to protect their bottom line.


Ultimately I have to agree with that. It's _terrible_ customer service; I'd expect this sort of thing from other companies, but Apple is really damaging it's reputation here.


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## MannyP Design (Jun 8, 2000)

Wow... what a thread.

Although it doesn't affect me either way, I'm glad to see Apple tackling the profiteers head-on. Yes, it'll cause some people grief... very few, I'd wager. You can get pre-pade anything... credit cards, gift cards, etc.

That said, this thread was somewhat educational--I was under the impression that it was against the law to refuse bills in $50 denominations or less. And, now I know...


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## Meleemark (Mar 3, 2007)

mirkrim said:


> Wow, I can't believe this thread is still going.
> 
> 
> 
> Ultimately I have to agree with that. It's _terrible_ customer service; I'd expect this sort of thing from other companies, but Apple is really damaging it's reputation here.


My big issue with this whole situation is the knee jerk solution that Apple has put into place to limited unlocked iPhones from showing up on the grid. Their business development folks should have realized that the only way to keep folks using their preferred provider (ATT) would be to offer significant exit barriers (and a locked firmware isn't a significant barrier) to prevent them from going to other carriers.

Too little too late I say.


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## mirkrim (Oct 20, 2006)

I agree. If they really wanted to clamp down, they should only sell the phone attached to an AT&T plan, or to customers who already have a plan and want to get the phone. It's total BS to sell the phone as a regular consumer electronic and then suddenly start putting all these restrictions on sales.


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## Oakbridge (Mar 8, 2005)

mirkrim said:


> Wow, I can't believe this thread is still going.
> 
> Ultimately I have to agree with that. It's _terrible_ customer service; I'd expect this sort of thing from other companies, but Apple is really damaging it's reputation here.


I disagree. One of the reasons why many of us prefer products from Apple is that they work. They don't have the headaches that Windows products have for instance. They have been able to accomplish this with their Macs by developing/controlling the hardware and software. 

Now let's suppose that someone created a virus for the iPhone and found a way to use one of the many 3rd party applications that have sprung up for the unlocked iPhones. Some poor unsuspecting iPhone user has a buddy who "oh you've got to try this, here let me unlock your iPhone and install it for you". 

This poor soul happens to work for a large company with sensitive data on their corporate servers. Let's suppose that the _Perfect Storm_ happened and somehow the virus on the iPhone got into the corporate IT structure through the locked down company Wifi connection. Or the developers of some 3rd party software didn't realize that they were exposing the iPhone to all kinds of hacks because their QA department consisted of their buddy who tested it once on his iPhone... "Oh wow, it works, that's so cool!"

Millions of pieces of personal identification became exposed and it gets traced back to this iPhone. What do you think that the media would do with this? They'd have a field day. 

Now this is a whopping exaggeration but we all know how the media in this day and age can take things way out of proportion. 

Or imagine that a flaw is found in the iPhone and Apple has to provide warranty repairs. How can it set up repairs in countries where it doesn't sell the product? Don't you think that the media will have a field day with that too?

I think that Apple is taking steps to protect their reputation. As I keep saying. The iPhone is available for sale to users in specific countries and is designed to be used with specific carriers with the specific applications that ship with the device. Any other use is outside of the original design of the product. 

Why do you think that the SDK is taking so long? I'll bet that there will be some form of registration and control (i.e. accountability) of developers for the iPhone. Just as there has been for the iPod.


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## mirkrim (Oct 20, 2006)

Of course reliability and ease of use is Apple's strong point, and I'm not against them wanting to keep things in check. They did handle the whole situation poorly though. See my previous post.


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