Apple's iPhone: it's for real!

Stuart Corner
Sunday, 14 May 2006 13:14

Business IT - Technology

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Japans' Nihon Keizai Shimbun appears to have confirmed the persistent rumours that Apple is planning to launch a cellular phone with iPod functionality, claiming it is being developed in conjunction with Japanese company Softbank, which has just purchased Vodafone Japan.

Nihon Keizai Shimbun  said that Softbank president, Masayoshi Son and Apple CEO, Steve Jobs had met and reached a basic agreement on the partnership, and that they would release a 3G iPhone for the Japanese market sometime in 2006.

It said the phone would  be sold in the Vodafone shops acquired by Softbank as well as volume electronics retailers, and that Softbank would carry other Apple products at its cellphone shops.

When Softbank announced its decision to buy Vodafone KK earlier this year, analysts welcomed the announcement, and noted that one reason that Vodafone KK had been struggling was a lack of handsets attractive to the local market

Ovum commented, "Vodafone had managed to shoot itself in the foot in Japan. Vodafone KK's 3G offering has failed to take off. This is a direct result of its decision to stop sourcing Japanese handsets for the local market, in favour of leveraging its global purchasing power. Unfortunately, the centrally-purchased 3G handsets have been about two years off the Japanese pace in terms of design and performance, and customers have left in droves. By end January 2006, DoCoMo had over 21 million 3G 'FOMA' subscribers, while KDDI had over 20 million 3G CDMA subscribers. This equates to 46 percent of the total market. In contrast, Vodafone had just 2.5 million 3G customers, or 2.8 percent of the market."

An iPhone will add substantially to what Ovum and others saw as Softbank's very strong position with the Vodafone KK acquisition. Japan based research firm, Eurotechnology, said: "An acquisition of Vodafone's Japan operations will be the completion of Softbank's march to build a full-scale telecommunications group on a par with NTT and KDDI through a series of acquisitions plus internal growth. Softbank in this new shape will become a much more serious competitor for NTT and KDDI, which both have succeeded to transform themselves from former monopolies into some of the world's most advanced telecom operators."

According to Ovum, "Softbank has made no secret of its long-term aim to compete in the mobile market, and we believe it has a strong position...[acquisition of Vodafone KK]  would catapult Softbank to a very strong number three position immediately, and remove the need for a lengthy and expensive network rollout. DoCoMo and KDDI have ample cause for concern."