Out of a job? Make $50k jailbreaking iPhones!

Earlier in the week, we reported that a jailbreak for iOS 4.3.1 had become available, and we did so without much fanfare. But yesterday, a report by The Washington Post and Bloomberg Business added a little oomph to the narrative by reporting just how lucrative the business of jailbreaking iPhones has become.

One source, a George Mason University senior named Kevin Lee, claims that he makes about $50,000 a year thanks to his jailbreaking skills and a Craigslist ad that promotes them. "To be honest, when I first started, I did it for my friends, myself, but it has snowballed from there," Lee told The Post & Bloomberg. "I was getting five to 10 customers a week, now it’s 30 to 40. I just had one customer from the Mongolian embassy who was moving to the capital of Mongolia, and he wanted to use the iPhone there."

Cydia, the most popular jailbreak app store, rakes in about $10 million a year in revenue and boasts 4.5 million weekly active users. Toyota even offered a free, official program on Cydia that gives the jailbroken iPhone a Scion sedan theme. Toyota also advertises on the jailbreaking website

All signs point to a mainstreaming of the jailbroken iPhone.

According to the report, three-year-old Cydia now earns about $250,000 in after-tax profit annually, most of which is ostensibly collected by its 29-year-old founder and operator, Jay Freeman. "The whole point is to fight against the corporate overlord," Freeman said in the report. "This is grass-roots movement, and that’s what makes Cydia so interesting. Apple is this ivory tower, a controlled experience, and the thing that really bought people into jailbreaking is that it makes the experience theirs."

For a long time, Apple contended that unlocking and jailbreaking an iPhone is illegal under the 1998 Digital Millennium Copyright Act (DMCA), claiming that it supports all kinds of gangs, drug dealing, and terrorism. But that changed when the Library of Congress added this little disclaimer to the DMCA last year:

Computer programs that enable wireless telephone handsets to execute software applications, where circumvention is accomplished for the sole purpose of enabling interoperability of such applications, when they have been lawfully obtained, with computer programs on the telephone handset. 

Apple's reaction was that while it may be legal to jailbreak your iPhone, it still voids your warranty -- only because Apple really cares about your user experience.

But there are those that believe that even Cydia has gotten too big for its britches. Take Gabriel Faucon, the owner of the new jailbreak store Themeit. "Once [Freeman] heard about Themeit, he wrote me a super long e-mail telling me not to do it, that it was going to break up the jailbreak community," Faucon said in the report. "There’s a lot of money involved, and he is trying to pass himself off as the little guy communist trying to save the world."

When a competitor, Rock Your Phone, threatened Cydia’s market share, it simply gobbled up the rival. Rock Your Phone's owner, Mario Ciabarra, also runs a jailbreak app design firm whose products -- under the terms of the merger -- Freeman must now promote on Cydia's homepage, and Ciabarra doesn't have to split his sales with Freeman. "Sometimes, eliminating competition may not be that great, but the reality is that we didn’t compete on prices, but on attracting audiences," Ciabarra, 33, said in the report. "With the audience, you get the money. And I saw an exit strategy and I wanted to focus on developing." 

Meanwhile, scores of others are making smaller, still respectable amounts. Rob Grohman makes about $50,000 a year repairing computers at a health insurance company as his day job. In his off-hours, he raked in a cool $100,000 over the last two years (mostly in 2010, though) developing a handful of paid jailbroken iPhone themes.

The takeaway? Grohman: "I made more money off of themes than my day job."

"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA

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