Chinese iPhone Causing Excitement and Anger

Just like anywhere else on this earth, Chinese people love the iPhone and want to own one.

The news that China Union will carry the 3G iPhone is circulating on the Internet like a virus. People feel not excited but relieved after all these months of waiting and speculation that finally, finally the iPhone is coming to China.

But as more information trickles out, indicating that the iPhone China will get is not exactly the one Apple has promised to the other parts of the world, anger and disappointment begin to ferment.

Basically, it seems that the Chinese version of the iPhone will be stripped of many features that make the iPhone unique. Here are the big things that may be missing.

WiFi. China has its own wireless protocol called WAPI. A couple of years ago, there was a protocol war between WiFi and WAPI in China and the compromise was that WiFi is allowed on Notebook computer but not mobile phones. Apart from the protocol restriction, it is in telecom company’s interest that bans WiFi on mobile phone since users will resort to 3G for large data flow.

The iTunes Store. It will only take a second to figure out why this is missing. In a country where most people download their music for free, why bother to have a online music store?

The App Store. This one is much more complicated. Apple shares the revenue with those developers in App Store and that is why the store is populated with so many apps and why it reached one billion downloads in just nine months. But there is a catch: the carrier is left out of the picture and China Unicon doesn’t like that.

Revenue Sharing. Apple is notorious for its appetite for control; and sharing in carriers’ revenue is a part of that. (On the consumer end, it also helps drive down the price.) Considering the scale of China’s mobile phone market, it is crystal clear that why this sharing idea seems so tantalizing for Apple but so devastating for China Unicon. That is also why the negotiation has dragged on for months.

What will it mean if Apple doesn’t get revenue sharing privileges? Two possibilities. One, China Unicon will sell the iPhone at full price. Second, China Unicon will subsidize the iPhone but users need to sign one or two-year contracts with them. (A practice unheard of in most countries besides the US.) In either case, it won’t be cheap. And here comes the paradox. Who would spend a big chunk of money to buy an iPhone that is missing all of these important features?

Many of the potential iPhone buyers, projected by Apple and China Unicon, already got one, through one source or another. For those early adopters of new technology, they couldn’t wait that long for that cool sleek iPhone. Either through friends abroad or underground markets, they got hold of one years ago. (Ovum, a telecom consulting firm, estimates there are already about 1 million iPhones on Chinese market.) Those who were willing to hold out but are now disappointed with by the new watered-down Chinese iPhone may resort to the same methods as early buyers. For those who just want the design, there are tons of fake iPhones on the market that look the same, feel the same and have a much loader speaker — for a much lower price.

So, who will buy the upcoming iPhone in China? That is the question.

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