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Apple to Gizmodo: Return That $5,000 iPhone 4G

- By - Source : Tom's Guide US

There's something fishy about the whole Gizmodo iPhone 4G acquisition.

Various reports are indicating that Gizmodo paid $5,000 (plus a bonus for traffic) or $10,000 for the next-generation iPhone previewed on Monday, depending on the source. Gawker Media founder Nick Denton clarified the pricetag last night here on Twitter, saying that the company paid the lower fee and that "we'll do anything for a story." Either way, Gizmodo racked in over 15 million page views by the end of the day, and may have damaged its relationship with Apple in the process.

The device came into Gizmodo's possession thanks to Apple Software Engineer Gray Powell. On March 18, 2010, Powell celebrated his 27th birthday at the Gourmet Haus Straudt in Redwood City, California. Overdosed on good German beer, he left the device behind, concealed in a special iPhone 3GS case. Someone discovered the device, contacted Gizmodo after supposed failed attempts with Apple, and the rest is history.

Now Apple is contacting Gizmodo via phone calls and this letter from Apple Senior Vice President & General Counsel Bruce Sewell, demanding that Gizmodo editorial director Brian Lam make arrangements for the device to be returned. Under California law, Apple has the right to reclaim the device up to three years--the person who found Apple's property "has the duty to report it." With that said, Apple has now blown any chances of denying that the device previewed on Gizmodo was not the real deal.

There's also a question as to the device's current stature: is it lost or stolen? Gizmodo's lengthy explanation of how it came into possession of the iPhone 4G paints a "oh look what this guy found" scenario. Daring Fireball's John Gruber reports a different view on the scenario, claiming that Apple considers the unit stolen, not lost. Could it be that the party responsible for selling the device to Gizmodo may have actually swiped it from Powell? Maybe Powell himself stole the device from Apple and received partial payment from the mystery seller?

Something doesn't seem right, and we're betting we'll see more from Apple's legal department within the next few days.

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nicklasd87 04/20/2010 8:19 PM
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Apples legal department sure is busy lately

haunted one 04/20/2010 8:22 PM
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Woohoo! Fun fun fun.

Kinda blows the grand unveiling of the phone they had (supposedly) planned for the summer. It would be really dumb if they unveil it in a the way they revealed the ipad, considering everyone's knows about it already LOL

yao 04/20/2010 8:25 PM
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some shrew advertisement.

tommysch 04/20/2010 8:25 PM
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I never believed the fact that somebody just figured out this was a prototype... Id say that 99.9% of the people that could have found it accidentally would have been fooled by the casing.

I think this is simply a viral marketing campaign orchestrated by apple to raise interest in the iFail 4G.

Honis 04/20/2010 8:25 PM
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Gizmodo more than made up for the cost of obtaining the device through it's advertising and increased mind share. I don't think they are to worried about the cost of things.

Anonymous 04/20/2010 8:28 PM
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zoemayne 04/20/2010 8:32 PM
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Smart move gizmodo 5K for whats soon to be 20 million views and to get their website more famous 5K was a good deal.

icepick314 04/20/2010 8:30 PM
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I believe there's previous clause that overwrites ALL other laws...

"Finders Keepers, Losers Weepers"

Shez 04/20/2010 8:37 PM
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@icepick314 Ohh yeah! The famous Weeper v. Keeper case. :)

xbeater 04/20/2010 8:37 PM
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as much as I hate saying it, that iPhone might actually be worth getting, if it has the specs of the "prototype"

matt314 04/20/2010 8:37 PM
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I wonder what the engineer to lawyer ratio is at apple. I'm betting it is much higher than any other IT company.

imspecial 04/20/2010 8:42 PM
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jesuslovesbacon :
If you lost your phone, and someone found it and posted all your personal data on the internet, wouldn't you sue?


Apple remotely disabled the phone....So all Gizmodo could do was marvel at the hardware.

Railgun1369 04/20/2010 8:42 PM
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jesuslovesbacon :
If you lost your phone, and someone found it and posted all your personal data on the internet, wouldn't you sue?



What does that have to do with this? Nothing.

I'm still lauging at all the naysayers from previous articles that showed basically the same backing and cried "FAKE!" all over the place.

Whatever the reason or method that Gizmodo came across this, if Apple is asking for it back, it would behoove them to give it up.

warezme 04/20/2010 8:43 PM
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all this doesn't really matter now, does it. (the cat is out of the bag) meow

Silmarunya 04/20/2010 8:46 PM
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matt314 :
I wonder what the engineer to lawyer ratio is at apple. I'm betting it is much higher than any other IT company.



As low as it might be, it's still way higher than the Jobs yes-nodder to thinker ratio...

xbeater 04/20/2010 8:47 PM
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gizmodo's response: "You can have $5000 aswell if you want? :D "

Anonymous 04/20/2010 8:49 PM
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i wonder why anyone even cares about this.

xbeater 04/20/2010 8:57 PM
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hotdog37846 :
i wonder why anyone even cares about this.


because it's apple getting pwned... and we love that!

egidem 04/20/2010 8:59 PM
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Steve Jobs: "Say it!"
Gizmodo: "Say what?"
Steve Jobs: "Say eeeet!!!"
Gizmodo: *sighs* "iStole it"
Steve Jobs: "Good Gizmodo...nice Gizmodo"
Gizmodo: "Can I buy it unlocked for $200?"
Steve Jobs: "Sorry, no"
Gizmodo: "Can I install anything I want on it?"
Steve Jobs: "Sorry, no"
Gizmodo: "Steve, are you even listening to me?"
Steve Jobs: "Sorry, no"

cadder 04/20/2010 9:09 PM
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Apple's legal department must be the lowest of the lowest.

This could be a simple case of "finders keepers" via Beer, or there could be more to the story. Probably IS more to the story. Either way it has the potential to generate priceless publicity for Apple, if they can resist the temptation to let their egos blow it.

HalJordan 04/20/2010 9:10 PM
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TommySch :
I never believed the fact that somebody just figured out this was a prototype... Id say that 99.9% of the people that could have found it accidentally would have been fooled by the casing.I think this is simply a viral marketing campaign orchestrated by apple to raise interest in the iFail 4G.



I was pondering this myself. The odds of a tech savvy person finding the prototype, and being unscrupulous enough to poke around on it long enough to figure it out what it was are pretty high. So it raises an eyebrow. On the other hand, Apple likes to tout new products with major press shows where they control what everyone sees and hears; releasing a prototype into the wild in the hopes that it will be discovered by the right people in order to hype it seems risky by Apple standards.

cadder 04/20/2010 9:13 PM
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Quote :Apple remotely disabled the phone...


Can they do that to any iphone? What else can they do remotely? Are they secretly making a list of all of the jailbroken iphones right now?

matt314 04/20/2010 9:15 PM
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cadder :
Can they do that to any iphone? What else can they do remotely? Are they secretly making a list of all of the jailbroken iphones right now?



It was done via mobile-me. It is a service they provide for "free" to anyone who wants it in case you lose your iphone. Well anyone who pays for a mobile account that is....

grieve 04/20/2010 9:35 PM
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It was planted by apple... Cheap, easy advertising to get people thinking about the 4G/HD now so when summer comes everyone is ready to blow $800 to much for it. Its all hype, perfect advertising.

Good deal for Giz too, $5k for 20mil hits = priceless.

michaelzehr 04/20/2010 9:42 PM
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Many states have a law that if you find something with a value over some limit (like $100), you need to report it to the police. "Finders keepers" only applies after a period of time for the owner to report it lost to the police. Even if California doesn't have a law like that, there's likely to be legal trouble. Gizmodo bought it knowing that the seller wasn't the legitimate owner.

tayb 04/20/2010 9:46 PM
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TommySch :
I never believed the fact that somebody just figured out this was a prototype... Id say that 99.9% of the people that could have found it accidentally would have been fooled by the casing.I think this is simply a viral marketing campaign orchestrated by apple to raise interest in the iFail 4G.



The front facing camera would have given it away for me in about 5 seconds. This is not how Apple does things. They don't plant products in mysterious bars, let the internet go nuts for a few days, then release the device three months later. No, they shroud the device in secrecy and then when the guesses and rumors have reached a fever pitch they unveil the device at the WWDC. A viral marketing campaign like this goes against anything Apple has ever done.

nottheking 04/20/2010 9:47 PM
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This was a very shrewd move on Gizmodo's part. Having looking it over elsewhere on the Internet, for the benefit of Tom's readers that invariably fail to read linked articles and seek out other ones, I'll cover some of what appears to be the case here.

[*]Apple DOES have the right under California law to reclaim the device. And they did exercise this right to claim it.
[*]However, the claims that it was "stolen" is basic corporate saber-rattling. As it was taken from a public location, and was left behind, it very clearly falls into the "lost" category, not "stolen."
[*]Gizmodo is returning it. They got what they wanted; and as they noted themselves, the act of returning it effectively confirms ALL rumors. Basically, they got Apple by the balls when it came to destroying their secrecy.
[*]Apple remotely disabled the phone once they discovered it was lost. Hence, no personal information or such was snagged. (it's doubtful that, as an engineering prototype, that it'd have any personal information anyway, aside from potentially the directory)

HalJordan :
So it raises an eyebrow.


Not really. For one, the device was lost in friggin' SILICON VALLEY, where a preponderance of the jobs are tech-related; furthermore, locations like bars tend to each target a specific demographic; if an Apple software engineer likes to hang out a place like that, chances are a majority of their patrons are tech-related people; most of them would probably know an iPhone on sight.

Also, looking through Gizmodo's own pages, they revealed that they didn't find it; they bought it off someone else. Chances are the "someone else" CERTAINLY knew it appeared to be an iPhone. (heck, who among even the tech semi-savvy WOULDN'T recognize an iPhone if they saw it?) Apparently, they knew enough, (likely perhaps owning one themselves, or certainly had friends with 'em) to tell that it didn't look like an ordinary iPhone. Gizmodo admitted that they didn't know if it was a 4G or not, but apparently were willing to take the gamble with $5,000US. And, well, the gamble certainly paid off.

Hunter844 04/20/2010 9:52 PM
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Ok..Apple dude is prancing around a bar with a next gen phone only it doesn't look like a next gen phone until you start looking at the software on it and what not. He could have been a target I guess. Maybe he's a double agent also working for Droid..the humanity.

Dude works for Apple...it stands to reason he hangs out among other tech savvy folk. Perhaps he was at a nerd bar...you they are out there. The point is...maybe it's not that hard to figure someone happened to come across this phone and then at some point realized it wasn't your typical iphone.

DjEaZy 04/20/2010 10:02 PM
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... PR trick!!!

santfu 04/20/2010 10:32 PM
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This doesn't sound like a shiny shiny (control control, mwah ha ha haa) Apple PR trick, though it has brought attention to the product, i doubt Apple are too upset.

santfu 04/20/2010 10:35 PM
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Also just had a thought, it is kind of overshadowing the iPad 3G release too, Apple wouldn't have wanted that.