Very clever. But I'm not convinced: anything that increases the theft rate and thereby requires people to buy more also increases the effective cost of the prod

Very clever. But I'm not convinced: anything that increases the theft rate and thereby requires people to buy more also increases the effective cost of the product. I don't have any numbers on this, so you should be skeptical about what follows, but: introspection strongly suggests to me that when the price of a thing increases by a given factor, my probability of buying it goes down by a larger factor. (At least when we're talking phones, toys, music players, cameras, computers, etc.) Now, suppose you try to increase sales by encouraging theft: if a fraction f of devices are stolen and their owners buy replacements, then (1) the effective cost goes up by a factor of about 1+f and (2) the number of sales per "original" sale is about 1+f. If my introspection happens to describe how typical people behave, then the net result is that the vendor sells fewer devices. (And has less happy customers.) (Actually it's 1/(1-f), not 1+f, if your second iWidget is just as likely to be stolen as your first. Something in between if you are more careful to avoid theft once you've been bitten once.)