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News
iPhone 3G a Kick in the Pants for Synchronoss
Wednesday, June 11th, 2008 at 4:00 PM - by Jeff Gamet
Apple’s iPhone 3G will require in-store AT&T activation at the time of purchase, which means that Synchronoss just lost about 25 percent of its business, according to Silicon Valley Insider. Synchronoss is the company that managed the iTunes-based activation process for Apple’s original iPhone.
The company stated earlier this year that it would be getting less business from iPhone activations, but did not elaborate on why it would see a revenue drop. At the time, analysts said that either more iPhones were being unlocked for use outside of authorized networks, or that Apple was planning on changing its iPhone activation process.
The switch to in-store activation will cost Synchronoss about US$30 million a year, and is already taking a toll on the company’s stock. Compared to its 52-week high, Synchronoss is down 78 percent and is still dropping.
While the change is likely good news for Apple and AT&T since they now have one less company to pay, it’s bad news for iPhone buyers that will have to deal with the same sign up headaches every other cell phone buyer encounters.
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