China iPhone a Non-Event?

iPhone3GSThere was an article on Engadget about the mainland China version of the iPhone. I thought it was necessary to create my own post to clarify the situation as I see them, after reading the postings and comments on various sites like about this Engadget article.

First of all, there have been real [manufactured by Apple] iPhones available in mainland China for some time; since 2007. These grey market iPhones came from both Hong Kong and else where around the world. In the past, Hong Kong versions; prior to iPhone 3GS, were more expensive than its counter parts from other countries. With the introduction of the iPhone 3GS, the Australian and New Zealand versions had also became desirable, due to their equally SIM unlock feature.

It is true that the Chinese government requires WAPI authentication in all wireless devices: client, access points, and routers, but this requirement caused an up roar among Chinese and foreign businesses, who would have to equip their employees requiring to travel to China with dual WiFi standard devices. In 2006 the WAPI proposed standard was rejected by ISO as an International standard in favor orf 802.11i.

China disclosed the WAPI technology to only 7 Chinese companies, and required any foreign companies to work with one of these 7 Chinese companies if they want to build WiFi devices for use in China. Of course, these foreign companies will also have to pay WAPI licensing fees. It is only recently; this year, that China was allow to resubmit the WAPI standard to ISO. So China’s insistent on the WAPI standard rekindled.

Mainland China also has a different 3G mobile technology, TD-SCDMA. It is mainland China’s attempt to create yet another 3G standard in the world. With the largest number of mobile phone consumers in the world, China believes this is possible. China Mobile was tasked but was not able to create a working 3G network until early 2008 and tested it during the 2008 Olympics. In early 2009 the China government granted a TD-SCDMA license to China Mobile, but at the same time also granted WCDMA license to China Unicom and a CDMA-2000 license to China Telecom. The latter two licenses is probably because the world’s 3G mobile phone manufactures did not want to support yet another 3G technology, making choices of 3G mobile phone handsets limited. Yet mainland China consumers do have a great desire to follow the brand names; like Nokia, Sony Ericsson, HTC and Apple.

Like most GSM mobile phone manufactures, Apple’s iPhone is a WCDMA 3G mobile phone. If the rumors of an iPhone being available on the USA Verizon Wireless network is true, that will mean a CDMA-2000 iPhone may be in the works. Apple’s initial discussion with Chinese mobile carrier was with China Mobile, but as talks fell apart and the discussions shifted to China Unicom, so did a TD-SCDMA iPhone. So for Apple to create a version of the WCDMA iPhone for China without WiFi, is most likely Apple’s desire to make available as soon as possible, an iPhone officially in China without changing the design or their manufacturing processes.

Mainland China does have a market for the iPhone, even if the prices of grey market iPhones are high; more than most workers’ annual salary. The iPhone does not need an officially santioned iPhones to be popular. What the partnership with China Unicom will do, may be to make the iPhone more obtainable by the general public. As the price of the official iPhone from China Unicom will probably be much lower than the grey market iPhone 3G and iPhone 3GS from Hong Kong, Australia and New Zealand, especially if it will not have the WiFi radio built in.

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