Passing of the torch: here are my iPhone 3G and me in the eyes of my retired HTC Touch, now reduced to life as a Chinese dictionary.
(Credit: Graham Webster)All year, I've been using an HTC Touch as my telephone. But now, having just moved back to the United States, I found it so hard to get a reasonable deal for service with this unlocked GSM smartphone that I decided there was little reason not to get an iPhone.
This was not an easy decision. I'm about to begin life as a graduate student, so money will be tight. I already had a pretty decent smartphone, which I'd bought in China because it was Windows Mobile and could run Pleco, the undisputed master of mobile Chinese-English dictionaries.
And I was nervous about the iPhone 3G, despite its superior aesthetics and preferable interface, having heard so much about performance problems. For a few reasons, I decided to go with iPhone anyway.
The primary reason is that AT&T and T-Mobile, the main GSM carriers in the United States, did not seem to want to give me a no-contract plan with a good data option. Both wanted a two-year contract just for opening the accounts, according to their Web sites. I had assumed one could just bring in a phone and go month to month.
The U.S. carriers seem to be using a tactic that Beijing-based tech industry consultant Mark Natkin said is the favored strategy of Chinese carriers to retain customers. Rather than lock the phones, which would be easily unlocked in Chinese electronics markets, providers are requiring contracts for decent services. Responding to my speculation on whether China Mobile iPhones will be unlocked, Natkin, who is managing director of Marbridge Consulting, explained:
Rather than locking phones, China's operators have been moving increasingly towards locking customers into a long-term contract that comes with a phone sourced by the operator. In San Francisco, a quick walk down Market Street from the AT&T Wireless store, you can get your mobile phone unlocked for $20 in about 10 minutes. So in China, where the labor is much cheaper, not many phones would stay locked unless the SIM card was fully embedded.
The fact that this tactic seemed to be in action in the U.S. made it only slightly more expensive for me to get an iPhone, so I went for it.
This could foretell a model for Apple to end its devotion to single carriers. If Apple were willing to let multiple mobile companies sell the iPhone and provide service for it in the United States, each company could sell them at a price like the $200 to $300 we see for the 3G and nail us with high-priced data plans. Especially if users wanted to use services like MobileMe's push e-mail feature (supposing it were to work), there could be specific, iPhone-only plans. Why can't this be done with multiple carriers?
This model wouldn't be new. The same phones have been available at multiple carriers for many years. They are sold at below-cost prices and the carriers make up for that with service contracts. What I want to know is:
• Why do we need to lock phones if we can lock users into contracts?
• If my phone is locked to your expensive service, why do you need to nail me with a contract?
Couldn't the industry get along with one or the other coercive tactic?
Unlocked, semi-legal iPhones have proliferated in China since Apple failed to make a deal with a Chinese carrier. Now that AT&T will offer an expensive solution for those wanting iPhones in the United States on different carriers, will the unlocked market be...unlocked?
For $699, the new 16GB iPhone 3G will be available to non-AT&T customers in the United States. As I've reported, China Mobile and Apple are now in talks that are more likely to bear fruit. This post is based on a few questions I really can't answer. Let's have them.
- Will truly unlocked iPhones still be available in China? I put a lot of faith in the efforts of crackers to defeat whatever Apple comes up with, but I would personally be wary of getting an unlocked iPhone that might not accept upgrades, mostly because iPhone software needs upgrades. For example, I've been baffled--while using friends' phones--by the apparent impossibility of sending a vCard from one address book to another person using iPhone's mail application.
- If the China Mobile-Apple deal goes through, is it possible that "legitimate" iPhones will be locked to China Mobile and useless in other countries? Would top-market Chinese users, who are used to switching SIM cards at will and picking up multiple SIMs at home and in other countries (as well as in Hong Kong), stand for this? I don't know the technology well enough to answer this one.
- Does Apple sell unlocked iPhones anywhere on Earth? If so, I want one.
- And since I'm not an expert in cell phone fees, but know AT&T has raised prices for iPhone 3G service plans (and presumably for the large cost in rolling out the 3G network), is it worth $400 to get out of its clutches over two years and take on a reasonable plan with another GSM carrier in the United States? If you divide $400 by 24 months, a person would only need to find a plan that is $17/month cheaper. That doesn't seem absurd, given the $70/month plus SMS cost of the starting AT&T plan.
- And here's one for U.S. users. If you could buy a phone for much cheaper that was unlocked, but had to be semi-legally or illegally brought from China, would that scare off people concerned about product quality?
I'm going to e-mail one or two experts to see if I can get these questions answered, but in the meantime, feel free to speak up.
After talks broke down earlier this year between Apple and China Mobile over the (non-pirated) introduction of the iPhone, Apple's concession to non-U.S. carriers that they don't need to share revenue has apparently restored progress with the world's largest carrier.
This comes as China's government reports mobile accounts are nearing the 600 million mark. China Mobile alone has more than 400 million accounts. These numbers don't mean there are that many people with cell phones, however. I and many others have multiple SIM cards. I use one for visiting friends, but others use second cards, which can be purchased for under 10 USD, to keep various types of calls separate.
China Mobile said Friday the main obstacle keeping iPhone out of the world's largest mobile phone market had been cleared now that Apple has dropped its revenue-sharing demands.
Apple chief executive Steve Jobs said this week he would like to see the device introduced in China later this year, and a senior China mobile executive confirmed the two companies were back in talks.
"We've broken through the biggest obstacle and we are negotiating at the working level," Gao Songge, deputy director of China Mobile's general department, told AFP.
Now if only the U.S. iPhone would allow choice of carrier...
A trio of mobile companies including two global giants will collaborate to find more ways to profit from and develop mobile phone-based internet use, the Financial Times reported.
Vodafone, the biggest-earning mobile company, China Mobile, the company with the largest user base, and Softbank, the third-place Japanese carrier, form the coalition.
FT writes, "The collaboration underlines how mobile operators are keen to stop internet search engines such as Google and Yahoo dominating the provision of potentially lucrative services on the wireless internet."
Indeed, Google is working on ever more wireless applications. At WWW2008 in Beijing on Wednesday, Google's president for Greater China, Kai-Fu Lee, gave a speech on "cloud computing" -- the idea that data will be stored online and accessible from a variety of devices, following users from device to device rather than tying people to individual machines.
A catalyst for this kind of usage, he said, is the iPhone. "As the Apple iPhone hit the market our back end servers really noticed," Lee said. "Even though the iPhone's [market] share is not large, on a per-phone basis the web usage is about 15 times more than other web-capable phones."
Mobile carriers so far have not been noted for their excellence in designing mobile services. With giants like Google, Yahoo, and Baidu on the scene, the carriers will have their work cut out for them. Perhaps we should expect to see joint-development deals...
The inventor of the increasingly ubiquitous Pleco Chinese-English dictionary software for Palm and Windows Mobile devices said the company is "very seriously considering developing" an iPhone version.
In an interview in April's China International Business (not yet online), Michael Love tells of developing the 6-year-old product and how it's getting popular enough that many foreigners in China are buying PDAs or PDA phones just to use Pleco.
I, for one, would not have bought my Windows Mobile-running HTC Touch if not for this program, and untold dozens of my Beijing friends and acquaintances are carrying around Treos for the same reason. (Love said he switches between a Treo 680 and an HTC Touch, himself.)
Here's what Love had to say about the iPhone prospects:
We're not thrilled about Apple locking down distribution and charging developers a 30 percent commission to sell iPhone software, but we really like the platform and think it has enough potential to be worth the hefty fees.
The iPod Touch is actually more exciting to us, in some respects, than the iPhone, since it doesn't force you to change your cell phone carrier and can be found almost anywhere.
It's next to impossible to buy a cell phone-less Palm or Windows Mobile handheld in many parts of the world nowadays, but the iPod Touch is all over the place, so for those people who are willing to buy a handheld just to run Pleco, it would be a better option than they've had in quite a while.
China Mobile CEO Wang Jianzhou said he will "keep all options open" on the introduction of the iPhone in China, Paul Midler reports.
In January, a China Mobile executive announced that talks had broken off over Apple's desire for control. Now, Wang says talks have not "officially" begun.
China Mobile is the largest mobile provider in China, a market that is projected to reach $2.8 billion by 2010, and urban China is by no means a no-iPhone zone. Apple develops more advanced locking techniques at roughly the same rate unlocking techniques make their debut in electronics markets worldwide.
Street prices for imported and unlocked iPhones vary with the news about any official sales in China. After January's news of the breakdown in China Mobile talks, prices spiked. But I suspect the gray market will not die even if China Mobile and Apple make a deal.
Apple products, even though they are made in China (my MacBook was shipped direct from Suzhou, near Shanghai), tend to be more expensive here. I overheard a Chinese couple in the Bainaohui electronics market at Chaoyangmen yesterday getting ready to buy a MacBook Air for about $2,700 (compared with about $1,800 in the United States). In a less extreme example a few weeks ago, the Beijing price at an authorized dealer for my friend's new MacBook was about $300 higher than in the United States or even Hong Kong.
No doubt, if the higher prices continue to dominate, people will keep asking friends to pick up iPhones in the United States or elsewhere to be unlocked here.
The Reuters article that Midler links to reminds us that iPhone talks are under way with NTT DoCoMo in Japan. Maybe the trip for gray market phones won't be as far...
The largest mobile operator in China has broken off talks with Apple over the iPhone, with one executive saying Apple wanted to share too much revenue.
From the Financial Times:
Chinese media on Monday quoted Gao Nianshu, general manager of China Mobile's data department, saying that Apple had given the impression it wanted to control the value chain and had pushed for up to 30 percent of revenues generated by locally sold iPhones.
"Of course we could not agree," Mr. Gao told a gathering of local MBA students, according to the Sina Web site. China Mobile also doubted Apple's prowess in communications technology, it quoted him as saying.
China Mobile is a topic for another day; as of November, it serves more than 360 million of the 522 million mobile users in China. The second-largest mobile company here, China Unicom, did not comment on whether it plans to put the iPhone out there.
Meanwhile, unlocked phones are still pouring into the market. I'm seeing more and more of them in the hands of rich folks, Chinese and foreign alike, and there are plenty on sale at electronics markets. Perhaps the person behind the last blip I saw about the iPhone in China was overexcited or full of it, but with the black/gray market so healthy, both China Mobile and Apple will probably not wait long to put a deal together and take their share.
After too long with a single-ringer, no-frills, colorless, call-and-text-only Motorola cell phone, this blogger has upgraded to a touch-screen, Windows Mobile, wi-fi capable, hand-held nugget of a computer.
Enter the HTC Touch, also branded Dopod S1.
Is my hand really that big?
(Credit: Sinobyte)I picked this phone up yesterday from the mobile phone market in the "Super Bar Street" (星吧路) complex at Nüren Jie (Women Street) in Beijing. I'll have to give a tour of the market later on, but the key here is to come with a friend who knows one of the stalls. In my case, one member of a couple who have bought several phones from one stall came along to introduce me and help negotiate a fair price (though I still had sticker shock, being one of those "Which phone is free with the plan?" consumers).
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