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If you want to purchase an iPhone from an Apple Store, forget about using cash or a gift card.

Apple is stepping up its efforts to limits resellers from getting their hands on the popular iPhone. Apple wants to crack down on those who buy, unlock and then resell iPhones to consumers.

Of the roughly 1.4 million iPhones that have been sold since its introduction in late June, Apple COO Tim Cook estimates that 250,000 iPhones have been purchased by customers who have the intention of unlocking the phones.

"Customer response to the iPhone has been off the charts, and limiting iPhone sales to two per customer helps us ensure that there are enough iPhones for people who are shopping for themselves or buying a gift," said Apple spokeswoman Natalie Kerris. "We're requiring a credit or debit card for payment to discourage unauthorized resellers."

Cash will no longer be an acceptable form of payment for iPhones and Apple has also reduced the purchase limit from five iPhones per person to two.

Today, however, Engadget is reporting that Apple has gone one step further than just denying cash customers. Apple is also denying the use of Apple Gift Cards to purchase iPhones. For those looking to get a stack of Apple Gift Cards for Christmas to put towards the purchase of an iPhone; you may want to rethink that idea.

Apple recorded 67 percent higher profits for Q3 2007 thanks in part to the iPhone. Apple's crackdown on resellers and those who wish to unlock the iPhone is no doubt a measure to protect the steady cash flow from AT&T.

According to Piper Jaffray analyst Gene Munster, AT&T is paying Apple an average of $18 a month for each iPhone customer. In other words, Apple receives $399 for each iPhone sold plus an additional $432 over the course of a two-year contract thanks to AT&T's exclusivity arrangement.

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RE: Also known as - Greed
By murphyslabrat on 10/29/2007 12:10:39 PM , Rating: 2
I also see Apple sending out credit to people who wanted to buy a 3rd for the inlaws but cant, so much for a Merry Christmas...

But, you preimburse a friend to purchase it for you. No big deal.

All in all, I think this whole arrangement is a brilliant business tactic, aside from creating a lot of negative PR. You can definitely monetize customer relations, but not everyone cares. Many people will simply buy a product based on initial impressions, physical appearance, and advertisement (much the same principles as when dating ^^j).

For instance, when I got my cell-phone, I just browsed AT&T/Cingular's online catalogue, then picked a phone that met my criteria (camera, media-player, replacable memory cards, and cheap). I ended up settling for a Sony Erickson W300i, without doing any further research. I chose AT&T because my parents used it, again, doing no further research (ironically, they have the worst customer service set-ups I have ever encountered; probably due to the recent merger between AT&T and Cingular).

When it comes to computers, I am another beast entirely. I have spent countless hours researching different components, comparing customer feedback regarding service, warranty claims, and overall value; in addition to performance benchmarks (I care little for power, as my apartment has free electric ^^j), and cost of the component as well as affect on overall system cost.

Maybe people will care a little more when purchasing a $400 phone, but I think that the majority of prospective customers will behave as I did, since most people either don't care or don't know enough to care.

"This is about the Internet.  Everything on the Internet is encrypted. This is not a BlackBerry-only issue. If they can't deal with the Internet, they should shut it off." -- RIM co-CEO Michael Lazaridis
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