Waiting for iphone to release in Singapore? Wait long long :)

Deal with telcos may be derailed by Apple's insistence on revenue-sharing

What's the hold-up?

IN ALL the markets Apple has launched the iPhone, the device has been sold through a single mobile phone operator, with whom Apple shares revenue.
The tech giant enforces the policy by 'locking' the iPhone so that only the designated operator's SIM card can be used. This means customers must sign up with that operator.

In Singapore, none of the three mobile phone operators has been able to lock down a deal with Apple. They are likely to refuse the unprecedented demand for a cut of their revenues.

The Infocomm Development Authority has also outlawed SIM-card locking to allow consumers to switch operators freely.




SINGAPORE consumers who want to get their hands on Apple's iPhone, hailed as Time Magazine's gadget of the year for 2007, will have to wait.
The reason: None of the three mobile phone operators here has been able to lock down a deal with the California-based tech giant.

In all the markets that Apple has launched the iPhone in, the device has been sold through a single operator, with whom Apple shares revenue.

Market observers say that local operators may be baulking at Apple's reported insistence on such a tie-up, and the company is unlikely to make an exemption to its money-spinning model for such a small market.

Officially, the three operators would only say that discussions are ongoing.

Over four million iPhones have been sold worldwide since it was launched last June.

In addition to its cellular phone capability, the gadget also boasts a full touch-screen interface and can play music and video.

Many hankering to get their hands on it have bought it while overseas. Some retailers here have also taken to parallel importing of sets.

The software on these grey-market sets has to be 'hacked' to allow them to work with the SIM cards issued by local operators. Apple has since threatened these parallel importers with legal action to get them to stop importing iPhones, but The Straits Times understands that some are still selling them.

Arguably, hacking the iPhone's software constitutes copyright infringement in much the same way modifying a PlayStation game console to play pirated games is, although it is untested in court. Rights owners have never gone after end-users doing this here.

Apple enforces its one-mobile-operator-per-market policy by 'locking' the iPhone so that only the designated operator's SIM card can be used. This means customers must sign up with that operator.

In return, Apple reportedly requires that its operator partner give it a 10 to 30 per cent share of the revenue from iPhone sales.

But Singapore's Infocomm Development Authority has outlawed SIM-card locking, to allow consumers to switch operators freely. This, however, also means any operator here will not enjoy the full benefit of a deal with Apple.

France also prohibits SIM-card locking. Apple's operator partner there, Orange, sells two iPhone versions - a locked one for 399 euros (S$844) and an unlocked one for 749 euros.

The issue has also surfaced in Germany, where the courts allowed Apple's partner T-Mobile to keep selling locked iPhones despite complaints from T-Mobile's rivals.

Operators here are likely to say no to the unprecedented demand for a cut of their revenues.

An executive with one telco said any deal to share revenue with Apple would 'open up a can of worms'.

Give in to Apple, the executive said, and other big phone makers like Nokia and Sony-Ericsson may start asking for similar arrangements.

Just this week, China's biggest mobile operator, China Mobile, rejected Apple's offer to be its exclusive iPhone distributor in the world's biggest mobile market because Apple wanted a 30 per cent cut of its revenues from iPhone sales.

Another factor that depresses chances of a deal: The longer negotiations take, the less desirable the iPhone becomes, said Cazenove telecommunications analyst Lai Voon San.

'Those who really want and can afford a premium product like the iPhone probably already have it,' he said.

Apple did not reply by press time.