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iPhone Business Model Hits a Snag in France
Serhei writes "It seems like the iPhone might not be released in France by this holiday season, since French requires by law that all cell phones sold there must be obtainable in an unlocked version. Apple will not be able to do so, since it has launched with a 5-year exclusivity agreement with AT&T. That deal will probably require exclusivity worldwide to avoid grey-market imports. (In return for this agreement Apple receives a large share of AT&T's monthly revenues from iPhone subscribers.) If the iPhone falls through in France, the country can join Belgium and a potentially long list of other countries with unlocking laws, whose Apple fans will have to make do with other, less Apple-y phones. Note that there is currently no mention of the iPhone on the Apple France page."
This is excellent, it means those EU countries which won't accept iPhone will have to churn out something thats a whole lot better, this is good news for consumers!
Yes, we know. This should frankly be all of Europe since the laws governing this thing are QUITE clear to us now, now that everyone and their brother on this site has given us quite the legal education with regard to cell phone unlocking in the EU. I'm sure Apple with either comply with the law or just not sell iPhones in jurisdictions where they feel they can't comply with the law. They generally don't act quite like Microsoft in the "I don't care what the law says, I'm MICROSOFT!" way. From the sound of it though, it seems no one in Europe will care, because they apparently don't want iPhones, they want phones that do X Y and Z that an iPhone doesn't do. Apple's so dead.
Do we need 50 BILLION stories about this? "OMG IPHONE SUX, APPLE SUX 2 LOL" I'm expecting to be the next story down the pike. How many of you people are so stupid as to buy an iPhone, when anyone who bothered to look saw that it was locked into AT&T even in the months and month of preview hype.
But couldn't Apple have just prevented this whole mess if they had charged like $1500 for the iPhone, and offered a $750 mail-in rebate for purchasers who signed a 5-year contract with AT&T?
File under 'M' for 'Manic ranting'
from the link, the "5 year exclusivity agreement with AT&T" is only for US Distribution.
Yes, hence the comment about grey-market imports. It's unlikely that AT&T would be happy with the iPhone being sold unlocked in any country, as those unlocked phones could then be imported into the US, despite the exclusivity agreement.
No, it wouldn't be as easy as if the iPhone was available unlocked in the US, and yes there are ways to unlock an iPhone, but that's not the point. If I were at AT&T and negotiated the deal, I'd have made damn sure that Apple were bound not to sell the iPhone unlocked anywhere, to make it that bit harder to obtain an unlocked one. Remember, you don't have to make it impossible, just hard or risky enough that that people can't be bothered.
It's official. Most of you are morons.
In the end, the iPhone has turned out to be a real disaster.
It sold a million units in 75 days. How can I make my next product a "disaster" like that?
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Only months from now, the other companies competing on the cellphone market will release their brand new iPhone clones (Nokia, looking at you).
What is the iPhone? It's just a phone with nice easy interface on a large touchscreen. It's not terribly hard to copy, nor is it illegal.
If Apple decided not to sell in France and other countries because it can't have 100% exclusivity with one provider, the other companies will fill their niche just fine. The only loser is Apple themselves.
It's not a disaster yet. I have at least two users at the office with iPhone and they are 'in love' with them for the moment. One even converted to Mac in the process. They are "forgiving" of all the shortcomings encountered thus far. Somehow the "coolness" outweighs the negatives for the moment.
That's actually a very good idea for them. The big argument right now is that Apple can't release an unlocked phone in another market due to grey market import of unlocked phones. Soooo, release it locked by another carrier in a new market. In this way the two markets do not compete, and yet consumers in both markets can obtain and use the product.
This is probably Apple's original plan. A year from now we are very likely to see the iPhone for sale in 1/2 dozen markets, each locked to a single provider in that market.
I work for the Department of Redundancy Department.
...what are the terms of the deal that made Apple so giddy about 'locking in' with AT&T for FIVE YEARS!!!
The argument is that Apple obviously has legal counsel who foresaw all of these problems (risk of class action, being made illegal in certain countries, etc...)
Yet they do not have any problem doing this for what (in hardware evolution time) is several lives long, and they are basically risking everything on this gamble.
What could it be that made the pot so sweet that they went with this deal on a debut product?
And on the opposite side of the coin, what could have been so incredibly bad about offering the phone unlocked with a SIM card slot
that they, -who pride themselves in public for being so 'open'- did not see that as a viable option?
Do they act so arrogant that they don't even want to please all of the international travelers who swap SIM cards
every time they arrive in a new country? Someone, please drop some science on us. As it is, it makes no logical sense.
(Oh yeah, and BTW Steve, if you happen to read this, just email me the 411 directly...! KTHXBYE)
Z.
They made their mistakes long ago with Apple III/Lisa and/or other lines and have done nothing but win consumers over since then.
...With the IIvx, and the Newton, and the clone licensing program, and the Performa line, and the PowerBook 5300, and... ;)
geek. lawyer.
With all the corporate-induced environmental disasters, wars, etc. in the world, that people would find something more important to get excited about than the terms and conditions for a cell phone.
Oh come now. Although I don't want this to turn into a political flamewar, France doesn't have any sort of pervasive hatred toward Americans.
Yes. France disagreed with the U.S. about Iraq (and yes, even though their reasons for doing so weren't the most honorable, it's fairly safe to say at this point that they were on the "right" side of the debate). However, this was a criticism of a matter of foreign politics and policy, and not some sort of personal vendetta against the entire population of America (especially those evil industrial design firms in California!)
It was the US who took the issue way too far. Even though it was a joke, serving "freedom fries" in the senate cafeteria was terribly crass.
Surprise! The world does not hate Americans by default. Most of them don't approve of what the government's doing, but neither do 70% of Americans these days.
-- If you try to fail and succeed, which have you done? - Uli's moose
"Designed in the USA" is probably hurting them worse in France.
Actually Apple is popular in France, major executives have been French.
You might also check up on current events, when French and German citizens got to vote the results turned out a bit different than what the mass media wanted to portray. Candidates friendly to the US won.
When I was in Paris last year I was treated very well. Even though my French language skills are nearly non-existent. Disagreeing with a government's policy decision does not translate into a population hating companies or citizens.
This should be a law at the European wide level just like number portability. Device portability :)
I see no reason to give Apple money until they comply. What is the point of complaining then going out and giving them money?
http://www.rense.com/general79/wdx1.htm
..."protecting" the consumer from being able to buy an iPhone at all. Total Newspeak.
I'd rather be "at the mercy" of Apple and have the option to choose what restrictions I'll submit myself to than have a monolithic bureaucracy (however you want to spin it) decide for me.
But then, that's always been the difference between freedom and socialism.
I'm sorry you have become so turned against the idea that governments can be on the side of the people.
A free market is not a goal in itself, just like unlimited freedom of citizens isn't a good idea either.
It's a good idea to limit the citizens freedom to commit murder, just like it's a good idea to limit the freedom of companies to pollute and corrupt the marketplace.
Businesses cannot be allowed to rule the marketplace without oversight as it's very profitable for the monopolist to corrupt the market and keep other competitors out, this leads to less competition and less choice for the consumers.
Even if a company cannot get a monopoly it can still enter into price fixing agreements and again the market and customers lose.
There are tons of situations where companies just don't do the right thing and the market forces are too weak to steer them straight.
Saying that any regulation is always worse than no regulation is naive in the extreme.
Our laws enable us to use any phone on any network and it allows us to change operators easily without changing phones, that has led to very low prices and a wide selection of phones, saying that it's worse to have more competition and lower prices at the cost of a little regulation sounds downright silly.
A government isn't totalitarian just because it regulates a market, it's a much bigger problem if it started passing laws governing what citizens could do in the privacy of their own home.
-- To dream a dream is grand, but to live it is divine. -- Leto ][
Normally I would agree on most things with respect to competition being better in the US. HOWEVER, with respect to cellular phones the US has its head up its own arse. The telcos in the US just don't get it, and neither does the government. Year after year the US is behind the world's market and why? Simple because of point 1.
Europe, and not just the EU got this one right. They understood that to grow the pie you need to be open and allow choice. You need to allow people to choose whatever phone, and plan they want.
With respect to profit, dude, you are really wrong here. The North American telcos when compared to cell phone business only are not that large. If you look at the bottom lines Voda phone, Orange, T-Mobile are doing pretty well.
Now with respect to plans and getting good ones. Well, you are taking an extremely biased perspective.
For example the following is considered a plus (T-Mobile)
* No nationwide long-distance or roaming charges (BTW this is free throughout Europe)
And why do people have to pay for incoming calls? And what about roaming charges outside of the US? Compare how much you would pay if you were to travel from the US to Canada. Then very quickly you would see how expensive things get.
My point is that you should get to know both sides of the issue before saying Europe does not get it. Again while I normally do think North America is ahead in technology, when it comes to cell technology North America is behind the times...
"You can't make a race horse of a pig"
"No," said Samuel, "but you can make very fast pig"
>I'm not really sure why this myth continues to propagate. iPhone has a SIM slot.
The slot is not of much use when the phone is locked to a specific SIM card. Which is what the GP complained about. Switching to a local SIM card when you come to a new country will of course save you a lot of money, when the phone will refuse to operate. But keeping your phone turned off will save you the same amount, and be much simpler.