China Does Not Need iPhone

From NetEast

Recently, China Unicom CEO Chang Xiaobing (常小兵) while attending IT leaders’ summit in Shenzhen said the rumor of China Unicom is currently about to reach an agreement on a deal with Apple is not accurate. China Unicom is still negotiating with Apple on the deal however the negotiation could succeed or fail.

If you carefully observe, this deal between China Unicom with apple is very similar with the negotiation with China Mobile. The outsiders all want to sign the deal already, but company leader says certain terms and conditions have not met yet. But we still cannot predict the result of this one. However, most industry and writers thinks the possibility of not reaching on an agreement is still greater than a successful deal.

Following the development, if China Unicom fails to negotiate this deal, China Telecom would probably be the next runner up to use the same tactics to negotiate with Apple for the same deal. It is very possible they will fail as well. In fact, according to the speculation, China’s domestic carriers never wanted iPhone to come into the Chinese market. Also currently they have enough chips in their hands to not accept iPhone. The only reason they are dealing with Apple is to give 3G more advantages.

This speculation have its reasons behind it, because the three largest domestic carriers are all trying to push 3G to the market, and iPhone is the newest and best representative of 3G technology. Although using this tactic to excite the 3G market is not necessary noble, it could still be very effective, letting people to be excited about 3G coming into their lives. Also, when 3G really rolls out, all the other manufactures will also follow. At that time will iPhone still be the most attractive product?

First of all, Domestic brands Huawei, Meizu, Lianxiang, and Nokia, LG, Sony Ericsson and other foreign brands all have products with similar functions. Users can have more choices other than iPhone, people can live without Apple. In my last post “iPhone coming into China, too late”, I said “this is not a problem to Apple fans” now it looks like this can only apply to apple fans, in fact most cell phone users said they don’t have to choose iPhone.

Secondly, foreign cooperation principles are difficult to be accepted by China. This Situation almost looks like Apple “ate all the meat then tries to ship the bones to China to sell.” Who wants to do this kind of business? Right now is the height of the 3G, most cell phone manufactures are fighting to deal with carriers. Carriers will not bend over backwards to the venders.

Moreover, introduce iPhone to China will cause impact to many domestic mobile phone brands, thus dealing with Apple will sacrifice the existing partnerships. This kind of deal might not be good in the long term. Plus all three carriers are state-owned enterprises. They must follow the Chinese government’s policies. Right now domestic mobile phone R & D efforts are currently striving to have a break out. If introduce iPhone to China at this time, iPhone is likely to put development of the domestic mobile phone out of the competition. Of course, if the carriers do not consider these and deals with apple, the domestic mobile phone manufacturers may also rally together a joint petition, then it will be up to internal department to resolve this situation.

Therefore overall carriers are at a good position right now, they have many choices, so they do not need to “sacrifice the forest for a tree”. Even though iPhone is very good, it still has its flaws. Of course, it will be good if China can have the deal with iPhone, but if not, China;s 3G will not miss a beat, earth will keep on turning.

(Author: Liyi 灵戈)