O2 has only received a fraction of what it has ordered with Apple, prompting fears of "very short supply for some week to come", according to an email received by a customer from none-other than O2 sales director Steve Shurrock.
More than 200,000 existing and potential iPhone customers have indicated that they are interested in taking a 18-month iPhone contract and the initial demand on Monday caused O2's website to crash.
The Register reports that at its peak, more than 13,000 orders were registered per second (ed : that's looks more like the site was experiencing a major distributed denial of service attack).
But according to sources, the reason why Apple is actually limiting supply has something to do with the fact that more than 85 percent of the first generation iPhones were unlocked and registered to networks other than O2.
Whether Apple's changing tactics will deter box breakers remains to be seen; one thing though that is certain is the fact that the grey market may soon be flooded with the older "cracked" iPhones which could eventually compete with other touchscreens and even the 8GB iTouch.