iPhone's assault on Asia - coming soon

Stuart Corner
Wednesday, 14 November 2007 02:26

IT Industry - Strategy

There are strong indications that the iPhone will go on sale in China and Australia next year, and discussions are said to be underway in other Asian countries. Reports however have indicated two major stumbling blocks: Apple's demand for a share of revenue, said to be as high as 20 percent, and the lack of a 3G model.  The revenue share model could be a strong deterrent in much of Asia where disposable incomes are low and average revenues per user already much lower than in the US and Europe, with much of this being earned from basic voice, and particularly SMS services.

Associated Press reports that Apple and China Mobile are talking about introducing the iPhone into China, but have not yet reached an agreement. China Mobile is the largest mobile operator in China with over 300 million subscribers.

AP also quoted sources at the GSMA Mobile Asia Congress in Macau, saying Apple was also in talks with other operators throughout the region. Meanwhile the CEO of Telstra, Sol Trujillo, told Bloomberg that he expected the iPhone to go on sale in Australia next year and that Telstra would be interested in an exclusive partnership.

Telstra has the largest customer base of 2G subscribers and by far the largest coverage area of any network with its 850GHz 3G network. However the iPhone is at present only a 2G device. This would suit China which has held back on moving to 3G because it wanted to use its own TD-SCDMA technology, which is not just starting to be rolled out. Many other Asian countries are also only at the start of 3G adoption.

In Australia one of Telstra's largest cellphone retailers, Fone Zone recently bought the country's largest network of Apple retailers, Next Byte,   and followed that up with the purchase of Apple service, support and rental company Frequency Communications.