The resale value of a phone that can never be taken out of Airplane Mode is going to be pretty bad, especially if it's "will instantly brick when you touch the setting", so it doesn't seem like much of a loophole for the anti-theft goal.
Also, just on the carrier's corporate retail side (small in comparison), we're talking about over 2,500 locations, over 25,000 reps, and over 500,000 new monthly adds and upgrades. Serialization is very expensive and does not eliminate the tricky human.
Also, even a disabled device is still worth parts.
Before, I thought "handset exchange" would be something where you bring in an old phone to get credit towards buying a new one. Like trading in a car. And like trading in a car, they'll want to make sure the old phone is actually worth something before they buy it from you.
Now... you're proposing a warranty exchange? Surely they check to make sure the device is actually eligible for the warranty (i.e. that you bought it, and within a certain timeframe) before they accept it?
Or is it something else entirely?
The fact that it would be worth the value of the parts is a good one, but not related to the question of whether Airplane Mode makes for a loophole.
So, here's an overly complicated example: 1. Steal Nexus 5 2. Buy Nexus 5 from local retailer 3. Exchange the back from the stolen Nexus 5 with the clean Nexus 5 4. Return stolen Nexus 5 for full refund
What if they try to power-up or troubleshoot the stolen Nexus 5? While you're exchanging the back, damage the power leads.
Seems like that would work... once. The ID and credit check requirements would probably not make it a viable long-term solution though.
And, again, irrelevant to Airplane Mode.
So, what about prepaid? No credit check or ID required. One just requires front money.
Also, keep in mind that the carriers have been fighting Identity Theft and handset upgrades for quite some time. For instance, people steal an identity and use it to get 5 free handsets. This is a on-going problem. Identity is a hard problem.
Also, a swap doesn't even require a purchase--just sleight of hand. If we go through the sale process, if the rep turns their back, I may be able to swap.
And this doesn't even take into account inside activity. I worked at T-Mobile for 8 years, starting as a part-time sales rep and ending a senior manager of business process. During my time, we fired the entire market of Houston twice.
There are many types of thieves, but in the case of those attempting to support a habit, with their will, they will find a way. Some claim they have no choice.
Finally, don't assume a perfect system. Telecom is a mess.
Anyway, the system doesn't have to be perfect. If you significantly raise the barrier to turning stolen phones into cash, you'll significantly reduce the rate of theft.
If you really care about the victims, you'd use the warrant not to attempt to render tools to trash dumps, but instead use the warrant to query the networks. You know, perhaps give SWAT something legitimate to do... That seems like a deterrent for future thieves and a way to catch current thieves; or at least easier than catching copper thieves.
The argument could be made that you'll merely shift theft into other areas rather than reducing it overall. But it's real hard to make the argument that making it hard to fence stolen cell phones won't reduce cell phone theft is a pretty hard sell, especially if a carnival game is the best argument you have.