China Mobile might be asking Apple for a modified version of the iPhone to ensure its customers stay within its network.
Apple and China Mobile have been flirting for some time over the prospect of bringing the iPhone to China. Now the South China Morning Post is reporting (via Cellular-News) that China Mobile wants Apple to ship an iPhone in China with the Wi-Fi and 3G chips disabled. Why take out the fast networking chips that make the iPhone shine, you may ask?
Competition. China Mobile plans to build out a 3G network based on a homegrown Chinese standard for third-generation networks that is not compatible with the widely used W-CDMA standard that is also expected to be used by China Mobile competitor China Telecom.
The thinking, according to the report, is that China Mobile doesn't want its customers buying an iPhone 3G compatible with the W-CDMA standard before it can complete its own 3G network. Otherwise, those customers may decide to unlock the iPhone and use it on China Telecom's network rather than staying tied to the China Mobile network. Unlocked iPhones are rampant in China; over 400,000 were estimated to be in use earlier in the year, and few think that number has gotten smaller.
If all Apple has to do is knock out the 3G and Wi-Fi chips it might not be too difficult to ship the modified handset, since it wouldn't be like developing something completely different. But given how closely the iPhone is associated with Apple, the move would create the potential for Chinese iPhone users stuck on a slow data network to blame the iPhone for their poor experience.
China would be a big prize for Apple, but it might not be worth the cost of shipping a crippled iPhone.