The Case for a TD-SCDMA iPhone 3G
iPhonAsia believes there is a case to be made for Apple and China Mobile collaborating on a special production run of iPhone 3G. I am calling this TD iPhone 3G as it would include a chipset that supports TD-SCDMA and China Multimedia Mobile Broadcasting CMMB – streaming CCTV mobile TV. What might this mean for Apple? A minimum 2 million units (upfront pre-paid purchase) of TD iPhone 3G in China.
iPhonAsia would like to emphasize that this TD iPhone 3G is pure speculation and remains an outside chance. In the table below, I have included arguments for and against a special TD iPhone 3G in China. Last month I placed the Vegas odds at 10 to 1 against such a TD production run. Given recent developments in China, the board has now moved and those odds are now 3 to 1 against.
I would like to also emphasize that regardless of whether a TD iPhone 3G is introduced in China, an iPhone deal will be consummated in China. The most likely timeframe for an official announcement is after the Olympic Games.
For readers interested in more details surrounding the motivations and political infighting that is now underway in China surrounding TD-SCDMA, I might recommend that you read the iPhonAsia post – iPhone 3G in China – Path cleared for a deal. This post includes a hypothetical scenario (latter half of the post) – Un-redacted minutes – Internal China Mobile Executive Briefing – which explains exactly why China Mobile might agree to favorable terms with Apple for production of a TD iPhone 3G. This post also includes some excellent reader comments. Thank you to readers. Keep them coming. I appreciate your insights.
|
Why there will be a TD iPhone |
Why there won’t be a TD iPhone |
|
· Apple has built a China version of the App Store. Just for laughs? Not! · Apple has built in special Chinese character recognition into iPhone 2.0 software. · China Mobile is under intense pressure from State Ministries to make TD-SCDMA a success, and yet the current crop of “TD” wireless handsets are not selling well despite the propaganda that they are (TD handsets are heavily subsidized + giveaways to Olympic officials + inflated sales numbers being reported). · TD handset sales will remain disappointing unless there are cool handsets (iPhone) available that will that capture the imagination of the public and spark interest in data-services. · Given the many inherent risks in setting up a separate production run for a TD iPhone 3G with a chipset that supports both TD-SCDMA and China Multimedia Mobile Broadcasting CMMB – streaming CCTV mobile TV, Apple will not agree to this unless they have a pre-sale deal in hand. Given the pressure China Mobile is facing, they will agree to take quantity upfront (purchase TD iPhone 3Gs for inventory). This quantity may be in excess of 2 million units. · NOTE: FBR Capital Market analysts Craig Berger and Robert Pikover have done recent channel checks on (Foxconn) iPhone production in China during the 3rd quarter though the end of 2008. They expect Apple to build 15 million iPhone 3G units in 2008. One notable element in their report was the projection that Apple would produce 2 million generation one iPhones during the balance of 2008. This is notable because Apple has ended sales of the gen-one model and the iPhone 3G is backward compatible to all non-3G networks that the gen-one model supported. So why build the 2 million gen-one iPhones? Perhaps they are not gen one iPhones at all, but rather 2 million units of a TD iPhone 3G model? · NOTE: A special production run of iPhone, with TD-SCDMA and CCMB chipsets, would take many months of pre-production planning and testing. A minimum of 6 months and as much as 18 months. Hence, even if Apple and China Mobile cemented a deal in June 2008, a TD iPhone 3G might not be ready until early 2009. · One safety valve for a TD iPhone would be to ensure backward compatibility to China Mobile’s existing EDGE 2.5 G network. By doing this, users can run on 3G for special data services and CCTV, and then switch to EDGE for calls should problems with TD persist. |
· China Ministries have privately accepted that TD-SCDMA will not be a viable 3G network over the long-term (transitioning to TD LTE 4G within 2 years) and the current PRC Ministries’ push to TD is primarily to save face and put on a good show during the Olympics. · Apple will not incur risks, nor spend the money, to set up a special production run for a TD iPhone on a network that may be euthanized within a matter of months following the Olympics. Why build a phone for a network that may never be accepted by the public? · Both the gen one and the new iPhone 3G will work very well on China Mobile’s existing EDGE 2.5 G network. From Apple’s point of view, there may be no need to build a TD iPhone 3G if the TD-SCDMA network simply cannot deliver a positive and stable user experience. The wait for W-CDMA in China may also be a hope and prayer that will never materialize … So EDGE it is in PRC (excluding Hong Kong and Macau) … for now at least.
|
There won’t be TDD-LTE for four years. Upgrading from TD to TDD-LTE will be much less and much quicker for China Mobile than not having TD and building TDD-LTE. TD gives China Mobile a time advantage for TDD-LTE. If TD networks are built out by end of next year and the bugs are gone and Nokia Apple and Sony have TD 3G handsets then China Mobile has a chance to reach 100 million TD subscriber goal by 2011.
I still see it as extremely unlikely Apple will release TD iPhones this year. You talked about the 2 millions gen1 iPhones being TD iPhones in disguise. Come on now, listen to yourself. That is completely ridiculous. Have you ever considered that those are REALLY gen1 iPhones?
Now, I remember you dismissing the possibility of Apple releasing gen1 design in China. However, at this point I truly believe it has a higher chance than either Apple releasing the current 3G iPhones or TD iPhones . Why? It is simply easier and cheaper to do so. Gen1 EDGE-based iPhone is fully tested and completed design ready to go into production anytime. TD iPhones will require Apple to completely redesign the board. Frankly, even if there is a possibility of Apple making the TD iPhone, the phones will not be ready for 2008. With EDGE iPhone, if that 2 millions rumor is correct, they can ship them out as early as September. Considering gen1 iPhones will not deal with all the trouble Apple has to deal with with a 3G-based one, it just make so much more sense.
Sure, the 3G iPhone is technically usable in China but why? Now that the officials are determine to push TD out, WCDMA is useless in China. Why sent the stock out to China when it makes more sense for Apple to send these out to markets that needed them? Plus, I pretty sure it is cheaper for Apple to make gen1 iPhone for China (at least for now).
Also, you have to consider that Apple release Edge-based iPhone out first in 2007. At the time, AT&T was already deploying 3G in the US. If Apple do not considered a 3G worthwhile at that time, why do you think Apple will spend so much effort to push a TD iPhone out in a market that barely started pushing out its 3G network? Let’s not forget that Apple actually released the Edge-based iPhone in England, France, and Germany, markets with FULLY established 3G networks. It will come as a surprise, to me, if Apple release gen1 iPhone in China.
It fun speculating on whether Apple will choose to release a TD or WCDMA iPhone but if Apple is determine to release the iPhone in 2008, I’ll it will most likely be gen1 iPhone. After all, you have to understand beside the 3G, GPS, and minor cosmetic differences, the gen1 and 3G iPhone are essentially the SAME phone.
By the way, I have been loitering around your site for a while and I really enjoy your site and articles.
Streaming CCTV over iPhones? Not that will drive the communist nuts.
[...] read more | digg story [...]
Just to clarify … CCTV is China Central Television and streaming the Olympics to mobile handsets is an important aim of China ministries.
http://www.cctv.com/english/index.shtml
Dan – so China Central Television (CCTV) is not Closed-Circuit Television (CCTV). That’s another story line….
Let’s just hope Apple and the rest of the world can benefit from this project. That is the beauty of working in China, no-one speaks of licensing agreements when it comes to broadcasting there is only (1) source. Could this mark a come-back in Public Broadcasting or potentially local communities opening up CCTV locations for public viewing?
I used an old iPhone in China back in March/April. It worked great even in the countryside of Henan province. Lots of strong EDGE signal.
Having said that, I don’t think Apple would build old EDGE handsets for the Chinese market. Given economies of scale, it is likely cheaper to build 3G iPhones, than the old EDGE model. Leave the 3G radio off, and batterylife will be very good.
I’ve read in an article that if the iPhone is released officially in China, the wi-fi function will not be unavailable. If that’s true, that’s a good reason to keep buying the 3G iPhone from foreign markets regardless of a TD iPhone. Unless the wi-fi is only disabled by software therefore can be fixed with a hack. Any news to confirm or deny this wi-fi availability?
http://itmanagement.earthweb.com/columns/article.php/3760826/Why%20Apple%20and%20China%20are%20Simply%20Incompatible.htm
[...] China Mobile considering new TD-SCDMA handsets . . . . well lookie here [...]