Report: iPhone Jailbreaking iPhones Has Become Big Business

From DailyTech: Earlier in the week, we reported that a jailbreak for iOS 4.3.1 had become available, and we did so without much fanfare. But yesterday, a report by The Washington Post and Bloomberg Business added a little oomph to the narrative by reporting just how lucrative the business of jailbreaking iPhones has become.

One source, a George Mason University senior named Kevin Lee, claims that he makes about $50,000 a year thanks to his jailbreaking skills and a Craigslist ad that promotes them. "To be honest, when I first started, I did it for my friends, myself, but it has snowballed from there," Lee told The Post & Bloomberg. "I was getting five to 10 customers a week, now it’s 30 to 40. I just had one customer from the Mongolian embassy who was moving to the capital of Mongolia, and he wanted to use the iPhone there."

Cydia, the most popular jailbreak app store, rakes in about $10 million a year in revenue and boasts 4.5 million weekly active users. Toyota even offered a free, official program on Cydia that gives the jailbroken iPhone a Scion sedan theme. Toyota also advertises on the jailbreaking website modmyi.com.

All signs point to a mainstreaming of the jailbroken iPhone.

According to the report, three-year-old Cydia now earns about $250,000 in after-tax profit annually, most of which is ostensibly collected by its 29-year-old founder and operator, Jay Freeman. "The whole point is to fight against the corporate overlord," Freeman said in the report. "This is grass-roots movement, and that’s what makes Cydia so interesting. Apple is this ivory tower, a controlled experience, and the thing that really bought people into jailbreaking is that it makes the experience theirs."

For a long time, Apple contended that unlocking and jailbreaking an iPhone is illegal under the 1998 Digital Millennium Copyright Act (DMCA), claiming that it supports all kinds of gangs, drug dealing, and terrorism. But that changed when the Library of Congress added this little disclaimer to the DMCA last year:

Computer programs that enable wireless telephone handsets to execute software applications, where circumvention is accomplished for the sole purpose of enabling interoperability of such applications, when they have been lawfully obtained, with computer programs on the telephone handset.

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