(Reuters) - When Apple Inc (AAPL.O) set up its customer service plan for the iPhone, it seems to have had the best intentions of humanity in mind -- any phone under warranty can get serviced because it’s the phone that’s tied to the warranty, not the owner.
So you don’t have to show up in person at an Apple store to get your phone fixed, which allows the common scenario of the boss sending his or her assistant to get repairs. Similarly, someone who bought their phone from someone else can get a repair without a hassle.
This approach thrills many Apple owners, who have boasted on message boards of how generous some stores have been in replacing broken iPhones. But that same approach has apparently rewarded a lot of thieves. The ease of trading in stolen iPhones and selling their replacements makes them nearly as tempting as grabbing cash.
In cities from coast-to-coast, reports of iPhone thefts are common. While some thieves sell the phones through the traditional channels of fencing stolen goods, examples abound of stolen iPhones being brought back to Apple, as if broken, for either replacement or a discount on a new unit.
“Apple seems to have not considered stolen devices and instead is relying on the honor system,” says Robert Siciliano, a consultant for Intel Corp’s (INTC.O) technology security unit McAfee and an identity theft expert. “The honor system is devised with the mindset that we are all sheep and there are no wolves.”
Siciliano says he has known of this problem for a while, but doesn’t see any immediate solution. “Until consumers scream loud enough about this issue, Apple probably won’t do anything about it.”
MIT graduate student Kayla Menard is among those who wants her voice to be heard screaming. She was sending a text from her 3-month-old iPhone while waiting for a train at Boston’s Park Street Station last month when someone snatched it from her hand and ran.
Days later she received an automated email that her damaged phone was repaired at an Apple Store. She went to the store to try to get back her phone, but they wouldn’t hand it over to her, and she was told there was nothing they could do. “Because I don’t have possession of the phone, they won’t help me at all,” she says.
Menard says she was astonished to find out that Apple wouldn’t help, even though they had her phone. Because someone else had brought in the phone, she was told, the store could not return it to her. She says she believes the thief was sold a new phone at a discount.
An Apple spokeswoman declined to comment on the issue of stolen iPhones being turned in at Apple stores, where they are either replaced or turned in for discounted replacement phones. The cost of an iPhone 4s starts at $199 and goes to $399, depending on how much memory it has, when a purchaser also gets a two-year contract with a carrier. The cost is considerably higher without a contract.
Just how popular are iPhones for thieves? An internal New York City Police report found that cell phones and other gadgets were the target of half of the 16,000 robberies reported in New York between January and October 2011 and that 70 percent of all phones taken from subway and bus passengers were iPhones, according to the New York Daily News, which obtained the never-released document.
That’s not a surprise to Michele Bosler, claims supervisor for gadget insurer Worth Ave. Group, who explains that it has always been the case. “They are the most commonly stolen phone, but that has not increased in volume since they first came out onto the market.”
Frustrated with Apple’s role after the theft of her phone, Menard says she found her carrier, Verizon Wireless, to be sympathetic. She had already reported the device stolen and had it disabled. Employees of Verizon Wireless -- a venture of Verizon Communications Inc (VZ.N) and Vodafone Group Plc (VOD.L) -- expressed their frustration, she says, that the Apple store never checked to see whose phone they had.
Verizon Wireless spokesman Paul Macchia declined to comment, saying the questions should be directed to Apple. Mark Siegel, spokesman for AT&T Inc (T.N), which until last year was the only carrier supporting iPhones, responded similarly and would not discuss the problem or what the company tells customers who have their phones stolen.
Meanwhile, the continuing problem of iPhone thefts has spurred the growth of applications intended to help users protect their data and catch thieves. Perhaps the most notable one is called iGotYa, which takes a photo of anyone who incorrectly types in the password on a locked phone. The photo is then emailed to the owner’s email address along with the location where the photo was taken. It’s probably not the solution, but it is an amusing idea.
Editing by Beth Pinsker Gladstone and Gerald E. McCormick