With Apple's notorious record for heavy-handed DRM and "Walled Gardens" it shouldn't really come as a surprise if the rumored iPhone isn't delivered unlocked. Bloomberg has a story in which Benjamin Reitzes, a UBS analyst, says he believes wireless service for the iPhone will be provided by Apple through a partnership with Cingular, and service contracts will be handled out of Apple's 174 retail stores.

Obviously, this would set up Apple to reap a bigger profit from the iPhone, but it could seriously hinder sales. If the iPhone was an unlocked smartphone, meaning a person could swap out a SIM card and use the phone on any wireless network, it would probably have a better chance at broad appeal. Not to mention the fact that Apple would be entering into a brand-new level of customer service problems.

Apple is going out on a limb by expecting the iPod faithful to trust it to manufacture a dependable cell phone, now it's asking the same people to believe it can deliver reliable service. Reitzes talks about Apple selling 500,000 iPhones in the first year for about $300 each, I'm not sure how realistic those sales numbers are if Apple narrows its market by locking down the service on the phone. Of course, Apple hasn't even officially announced that it will release an iPhone, but conjecture is always fun. — Brian Ward

Go to story from Bloomberg

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