The mobile phone and iPhone unlock industry is a multi-billion dollar industry-a lucrative world, a hidden world, so far unrevealed- until now. A first person account on the iPhone unlocking business.
PRLog - Aug. 19, 2014 - LOS ANGELES, Calif. -- ORIGINAL ARTICLE :
https://iphoneunlockguys.com/blog/detailpage/blog/The_Cloak_and_Dagger_World_of_iPhone_Unlockers
Third party unlockers are amassing record profits in a lucrative industry that is shrouded in mystery and conducted in an underground virtual bazaar and hidden underworld. It is also a world replete with hackers, con artists, and opportunists.
While the size of the mobile phone unlock industry is hard to gauge due to it’s secrecy and grey market status, Troy Alvarez, Co-Founder of iPhone Unlock Guys, a Los Angeles-based iPhone and mobile phone unlock and jailbreak company, estimates it to be upwards of 2 Billion annually.
Seemingly out of the ether, thousands of iPhones locked to almost any wireless carrier in the world are “factory unlocked” daily – essentially freeing them from carrier locks and exclusive use on a particular network, allowing an unlocked iPhone to be used with other wireless carriers domestically or internationally.
Customers unlock their phones with third party unlockers when their carrier is unable- or unwilling- to do so, due to the device still being under contract, or the device being sold to a new owner without access to the original wireless account.
“All that we as unlockers need to unlock an iPhone is its IMEI number,” explains Troy. “We submit lists of customer IMEIs to our direct sources- and are notified when orders are completed. We work with multiple sources for different wireless carriers. A customer then simply plugs in a new SIM card, connects the iPhone to iTunes, and restores the phone.”
An IMEI number, short for International Mobile Station Equipment Identity, is a unique 14-15-digit number and identifier assigned to every mobile device, the way a VIN is assigned to every car. It can be found by pressing *#06# on a phone’s dial pad, is printed on the battery of most devices, and is accessible in a smartphone’s settings menu.
IMEI numbers identify specific devices and is used by a GSM carrier to verify the status of the device, marking the device on whether it can be used freely, restricted to one carrier, or even blacklisted- reported lost or stolen- rendering it unusable on the original network, or even all carriers in a particular country, if a pan-carrier blacklist agreement is in place.
The process of factory unlocking an iPhone is quite simple technically, notes Troy, and is an inside job, performed by an employee of a wireless carrier, such as a customer service representative or higher up, with access to the IMEI database and the ability to submit a request and modify the status of IMEI numbers from Locked to Unlocked , updating the status of the IMEI number to Apple servers.
These insiders are the “direct sources” in unlocker parlance, who act as wholesalers, and communicate behind a veil of secrecy on Sonork, a secure enterprise instant messaging platform, and their communication tool of choice. Away from prying eyes, and identified by their Sonork IDs, these inside sources at wireless carriers and a multitude of unlock distributors, resellers, and industry hangers-on bargain and haggle for pricing, service details, and payment methods.
The direct sources are also careful to hide their true identities, wary of being caught and losing their carrier jobs- or perhaps worse. Skype, WhatsApp, and Viber have fast become the de facto communication software among and between unlock “distributors”, who resell services from direct sources to other middlemen.
“The unlock business from the point of sourcing the actual unlocks is a business of middlemen, pure arbitrage, and sometimes it’s hard to tell if you’re dealing with a direct source, a middleman, or even a couple or more middlemen, considering many of these guys up and down the chain make a buck or two per unlock and deal in bulk volume” Troy says.
“From my experience and observation, I’d say most direct sources for U.S. networks are recent immigrants, foreign-born naturalized citizens, or U.S. citizens with extensive contacts and relatives abroad.”
“They are less leery of the potential consequences of using their positions at the carrier to unlock phones without the carrier’s knowledge and willing to bend the rules – and make a boatload of money at the same time.”
Middlemen from India, China, Pakistan, and Southeastern Asian countries are highly represented at the distributor level of the unlock industry for major global carriers.
The Rise of the Unlockers
The origins and prolific growth of the unlock industry lie in the rise of the smartphone, the introduction of the iPhone, AT&T’s exclusive monopoly of the device, and the largely North American carrier policy of offering subsidized phones on a contract basis, as opposed to contract-free models and unsubsidized devices in the rest of the world.
The growing popularity and capability of smartphones with more advanced features and functionality than regular phones proved irresistible to consumers, but the higher cost of smartphones compared to regular phones led to the entrenchment of the subsidized contract model in North America and other markets, and the policy of SIM-locking subsidized phones to the carrier.
The introduction of the original iPhone in 2007 was a game changer, a paradigm shift. More than just a smartphone, the “Jesus Phone” as the original iPhone was dubbed amid mass interest in the device, made it a status symbol and must have item, electronic jewelry for the masses.
In a stroke of genius, AT&T cooperated with Apple on the iPhone and gained exclusive 4-year selling rights in the U.S - and keen to protect their costly investment, which included paying Apple a fraction of monthly service revenues, AT&T made unlocking the iPhone exceptionally challenging.
The rest of the world needed iPhones however.
So the unlockers came, and a new habitat of the burgeoning iPhone ecosystem was formed.
According to Apple, more than a quarter of the original first generation iPhones sold in the U.S. were not registered with AT&T. These were shipped overseas and unlocked, with the same thing happening with every successive new iPhone release.
iPhone Unlock Guys was launched soon after by friends Troy Alvarez and Mark Robertson , who met while students at UCLA, and shared a passionate interest in all things Apple, including tinkering with Apple products.
The most successful unlockers are able to ink deals with large iPhone resellers- often overseas, like China, Russia, and the Middle East, says Troy.
“Our big break came in Shenzhen, in China. It’s known as the electronics mecca of China, and we saw rooms stacked to the ceiling with iPhones at many mobile shops. We managed to secure deals with large iPhone resellers, and that expanded to trips to Russia and throughout the Middle East.”
“Our bread and butter remains unlocking older iPhone 5, 4S, and 4 models, and we unlock around a couple of hundred iPhones a day. AT&T unlocks are the most popular unlock service – or were, until AT&T changed the game last year.”
The 2013 AT&T Debacle & The Colombian
“AT&T was the running joke of the unlock community for a long time. They literally had no security, unlocking AT&Twas child’s play, and there were dozens of insiders doing the job. If AT&T wasn’t willing to unlock a customer’s device, it could easily be done by an unlocker, almost instantly, very cheaply”, laughs Troy.
That suddenly changed soon after the release of the iPhone 5S and 5C in September 2013. AT&T decided to tighten up security and severely restricted access to who had the ability to perform unlocks within the company. It became impossible to unlock an AT&T iPhone, as the service went down.
Due to AT&T being the exclusive carrier for the iPhone for years, the large AT&T subscriber base, and cheap AT&T unlocks, foreign markets imported AT&T iPhones in bulk.
Eventually in a couple of months this stabilized, but the price shot up from under a buck for an AT&T unlock to over $100 to unlock the new iPhone 5s. iPhone Unlock Guys for example, offers a Premium AT&T iPhone Service for $65 that unlocks any iPhone 5 or older within 7 days, and an AT&T iPhone 5S/5C service that unlocks any iPhone 5S or 5C for $90 within 7-10 days.
In this confusion and desperation among unlockers and customers alike, con men and opportunists arose.
“The Colombian really did a number on us. He actually was the only source doing AT&T for all of us initially. We all worked with him. He only accepted Western Union, but despite suspicions, he seemed credible at first.”
“Then, he stopped replying out of the blue, holding a lot of money from multiple unlockers as credits for unlocks, and vanished. He must have run off with at least 300K. We never heard from him again.”
With the release of the iPhone 6 on the horizon, the excitement in the unlock community is palpable.
For unlockers, the release of a new iPhone is like Thanksgiving, Christmas, and New Years rolled into one.
“Just a couple of years ago, I was a college student driving a 97 Camry.” Troy reveals. “Now I drive a Maserati Ghibli”
“It’s crazy, just crazy.”
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The Secret World of iPhone Unlocks and the iPhone Unlockers
August 19, 2014 at 11:00 AM EDT
