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It’s August and time for a bit of sightseeing. I’m on a trek through Northern Idaho and Montana. Spent the last two days in Sandpoint, ID along Lake Pend Oreille. I’m now in Big Fork, Montana. Today’s drive from Idaho to Montana was spectacular. Headed north of Pend Oreille to Bonner’s Ferry to Moyie Springs to down to Troy Montana, to Libby to Happy’s Inn to Marion to Kila to Kalispell to Somers to finally to Big Fork Montana. Majestic scenery everywhere along the drive! Wide open lush meadows that seem to go on forever with the mountains and forest as the backdrop. Many lakes, rivers and streams to cool your feet in. I pulled over for a few quick photos and a short video (shot with my iPhone 3GS) at Kootenai Falls between Troy and Libby Montana.

No doubt that life is different up in the mountains. Never been in a grocery store with so many “trophies” mounted on the wall. Hunting’s not my thing. Don’t believe in it, unless you’re going to eat what you kill.

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Breaking news via TelecomsKorea

KT, formerly known as Korea Telecom, has officially confirmed its plan to launch Apple’s iPhone in the Korea market.

Picture 2KT Chief Financial Officer Yeon-hak Kim let the news slip in a conference call on Friday, “Apple iPhone will be in our smartphone line-up. … iPhone will help to expand the smartphone market and will contribute to increasing the ARPU”(average revenue per user).

Kim declined to provide any further details, including the launch date and distribution plans in South Korea.

iphone-south-koreaKT is the second largest carrier in South Korea with 15 million mobile subscribers (32% marketshare). The other primary iPhone suitor is SK Telecom, the leading mobile operator in the nation with 23 million mobile subscribers (50% marketshare). A SK Telecom spokesperson revealed on Tuesday that it too has been talking with Apple to introduce iPhone in South Korea. If a deal with SK Telecom is reached, then Apple’s iPhone will not be an “exclusive” in Korea.

Just speculation, but if the two top carriers in South Korea both wind up offering iPhone, then an “iPhone in Korea” launch date may be held up until the both carriers have inked a deal with Apple.

Picture 1Read more via > TelecomsKorea

iphonechinaThe following is my reply to Artman’s post (quote below) on the terrific AAPL Sanity message board. Artman is referencing Tim Cook’s careful choice of words when asked when iPhone might be launched in China. Twice now Tim Cook has stated that Apple’s objective is to have iPhone officially in China “within a year.” (i.e. could be tomorrow… or 12 months from now)*******************

Picture 2Atman: << THE QUOTE I remember – Tim Cook: “Within A year” >>*********************

And that’s a wise quote to keep in mind Artman … As Yogi Berra often admonished “nothing is done till it’s done!”(a bit of a paraphrase)
In my last post I listed a few of the issues that could still be on the Apple/China Unicom negotiation table (won’t repeat here).
lebronblockmingWhen I think about the China iPhone negotiations, I think about how much is controlled by the the “powers” looking to protect “greater interests” in China. I’m reminded of my pick-up basketball games down at the local gym. The same guys show up every Saturday … Teams get picked and the competition is fierce. It’s human nature to want your team to win, and you’ll fight like crazy to score big and shut down your opponent. But when the game is over, everyone, no matter the team they were on, is still good friends. Next game, the guy you battled and elbowed may be your own teammate. And when a stranger shows up at the gym and “has game,” you want that guy (Apple) on your team. But no matter how well the stranger can play, he won’t supplant the relationships with the guys you’ve known for years.
In China’s telecom industry, the wireless carriers compete like crazy, but everyone knows each other very well and they are always very mindful that the telecom industry comes first … and if necessary State authorities will remind carriers that China’s telecom industry comes before any one company’s immediate self-interest.
*****************
So you can draft a great “outside player” (Apple) to help you win the game … but if authorities perceive that the industry might suffer or lose face (outside player commands too much attention and boosts pay for players vs team owners), then the game can and will be rigged.
Long way around to my point … which is that China is not making things easy for Apple, an outside player that has “serious game.” China’s ministries want to bring their own carriers’ “game” (value-added services platforms) up to Apple’s level and/or otherwise constrain Apple’s game. No WiFi for you Apple! Only China’s WAPI standard. Want to offer wireless value-added services on your own iTunes/App Store platform?  Might take awhile to approve that.
***************
All that said … there are multiple parties in China who have serious economic interests in a prompt and successful launch of iPhone, including:
  • Apple China
  • China Unicom/vsnes.com
  • Foxconn (Hon Hai Precision)
  • Best Buy China – probable iPhone distributor
  • Wal-Mart China – possible iPhone distributor
Plenty of money will be spent on an iPhone launch … “Net net” iPhone in China will be good for China’s economy
Greg Joswiak

Greg Joswiak

Sina.com is reporting this morning that Greg Joswiak, Apple VP for iPhone Product Marketing, will lead a team from Apple on an iPhone mission to China. Touch down in Beijing is rumored to be later this week. Sina.com suggest this trip will be a restart of iPhone negotiations. The literary will include meetings with China Unicom and discussions with China’s telecom authorities.

iPhonAsia wonders whether this is less a “restart of talks” and more a finalization of key marketing and distribution plans? There has been growing evidence of progress along the iPhone to China path including possible production of a new iPhone model (A1324) for China.

apple-girlThis will not be the first team from Cupertino to trek to China on an iPhone mission. In April ’09, I believe that senior Apple execs flew to Beijing to visit with China Unicom. This reciprocated China Unicom’s ten-day (March 8th – 18th) meetings with Apple in Cupertino.

What loose ends need to be tied up before the ink goes on the iPhone in China contracts?

  • Discussion re marketing plans with China Unicom.
  • iPhone distribution plans in China – via Best Buy?, Wal-Mart?, Vsnes.com?, Apple Stores and authorized resellers, Foxconn’s Cybermart?
  • Conversations with MIIT over WiFi on iPhone. Will a launch delay to year-end enable Apple to submit a WAPI/WiFi iPhone for fast-track testing/approval? Or will Apple go with (as rumored) a special customized for China iPhone without WiFi?
  • Delivery of wireless value-added services – Apple’s platform or China Unicom’s?
  • New mobile WVAS (e.g. apps and music) payment system for the vast majority in China who don’t own credit cards.
  • Discussion and analysis of China Unicom’s WCDMA 3G network readiness.*
  • Obtaining the all important network access license (NAL) from China’s Ministry of Industry and Information Technology (MIIT).

05-china-unicom-3gThere has been some recent buzz (previous Sina.com article) over the possibility that Apple may be ceding delivery of apps and music to China Unicom’s “Wo” (3G services brand name) platform. Translation from Sina.com post:

It is worth noting that it did not configure the Apple iPhone’s WiFi global functions, the process of random incidental nor with iTunes Music Store, as well as store applications (App Store).”

iphone-china-unicom-112Why might Apple cede delivery of wireless (apps and music) services to China Unicom?

  • China’s telecom industry, supported by their regulatory authorities, may have demanded this concession to protect “carriers’ interests.”
  • Paying for music in China is a novelty (free downloads are the rule). Very few in China have credit cards and payment for value-added services may need to be integrated with China Unicom payment systems.
  • China Unicom is rumored to be providing generous subsidy plans for iPhone (selling iPhone below the price they pay to Apple per unit). This suggests that they will need to make up revenues from higher plan rates and/or value-added services fees.

Why Apple may have drawn the line in the proverbial sand and insisted that Apple retain control over their China App Store and iTunes**:

  • iPhone’s reputation is a reflection of its entire ecosystem, which includes Apple’s wireless valued-added services (WVAS) such as the App Store and iTunes. China Unicom has a long way to go in building out their own WVAS platform. Integration between iPhone and its WVAS platform needs to be seamless not kluge.

I’m cautiously optimistic that an iPhone deal will be concluded soon and I view Apple’s latest trip to China as a positive sign. My guess for a China iPhone “deal signed” announcement date is late Summer with a launch in the Fall of 2009.

Footnotes:

* China Unicom will have solid WCDMA 3G coverage in all major cities by Fall. They are spending big to accomplish this mission. China Unicom plans to have 125,000 base stations up by year-end. That’s more 3G base stations than all the operators in Western Europe have rolled out in the 9 years since the 3G wireless standard has been in existence.

** There is a chance that Apple might create a clone of their iTunes and China App Store and simply re-brand it for China Unicom. This will allow China Unicom to save face and still allow for a seamless integration between iPhone and its platform.

250px-bestbuysh-711725Not a major revelation … just one more piece of the puzzle falling into place … According to dycj.ynet.com (reported via Trading Markets), retailer Best Buy Co., Inc. (NYSE: BBY) will introduce 3G products and services of China Unicom at its franchise stores.

1240987921789_1240987921789_rBack in April ‘09, Apple and Best Buy announced an Apple “store-in-store” distribution partnership in China (By the end of Summer 2009, 40 mini Apple stores-wthin-a-store will be open for business). Now (August 3, 2009) China Unicom and Best Buy have announced plans to distribute 3G phones through Best Buy stores. Coincidence? I think not.picture-342

Read more from April iPhonAsia post > http://iphonasia.com/?p=4636

Engadget posted a story yesterday with the banner headline – China Unicom’s iPhone gets regulatory approval

New iPhone for China - Model A1324?

New iPhone for China - Model A1324?

The story goes on to report that China’s State Radio Regulatory Commission (SRRC) has given iPhone a certificate of approval on May 7, 2009. Engadget ends the post with a cute tag So, all we need now is what’s we’ve needed for years: a handwritten note from El Jobs himself saying that this whole thing is more than some sick charade.”

No Engadget, the “charade” is something that you are perpetuating though your post. Unfortunately, the echo chamber that has replaced investigative journalism is now regurgitating your report across the Net. “iPhone approved by China!”

Two key problems with this Engadget post:

  1. iPhone’s receipt of radio transmission certificate in not “news.”
  2. iPhone has NOT yet been approved for sale by China’s authorities. An “official” iPhone cannot be offered for sale in China without a network access license (which could be issued any time now).

Picture 2Interfax TMT reporter Cindy Ging deserves the most credit for reporting on this story. On June 11, 2009 Cindy reported that iPhone has received only one (1) of the two (2) required licenses:

  • Issued May 7, 2009 (five-year model approval) – Radio Transmission Equipment Type Approval Certificate (RTETAC)
  • Still Pending – Network Access License (NAL)

More Background >

The real iPhone in China news was the posting of several photos that just might be the new model iPhone – Model A1324. Here is what I posted yesterday on iPhonAsia re the new China iPhone photos > http://iphonasia.com/?p=5974

picture-342China website Sina.com.cn has posted several photos (below) of the rumored new iPhone model for China. Sina.com.cn was apparently “motivated” to later alter (blur-out) both the model number and the WCDMA (China Unicom’s 3G network) inscription showing on the backside. The use of simplified Chinese inscriptions on the iPhone backside is interesting as the iPhone model for Hong Kong uses traditional Chinese (more complex characters). Simplified Chinese is more widely used in mainland China.

Owen Fletcher at IDG News Service points out one other interesting item showing in the photos:

“The iPhone in the pictures also carries China’s ‘Environmental Protection Use Period’ mark, which indicates the number of years of normal operation during which hazardous or toxic substances included in the product will not leak or change in a way that harms the environment or human health. In the case of the iPhone pictured that length of time is 10 years.”

Are these actual photos of the iPhone code-named “Model 90” (a.k.a. A1324rumored to be in production in at Foxconn’s factory in Shenzhen? Or are these just photoshop fakes?  I’ll leave it to the Photoshop experts to dissect.

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The second set of photos (below) shows China Unicom’s “中国联通” carrier signal in the top left hand corner. The battery percentage meter reveals it is a 16GB 3GS model. NOTE: The front face iPhone photos do not necessarily prove anything, as there are many iPhones (including iPhone 3GS) in China that are now in test mode on China Unicom’s WCDMA 3G network.

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