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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!
Look at the German page, you'll see that T-Mobile is the exclusive carrier there.
Exclusivity deals with a sub-desirable carrier is working against Apple but "Designed in the USA" is probably hurting them worse in France. Next.
Most of the stuff on
I find it very hard to believe that Apple Legal did not see this coming.
also- from the link, the "5 year exclusivity agreement with AT&T" is only for US Distribution.
I like microcars
Wasn't there a case this year and a law passed where phone could legally be unlocked by the consumer. Cell phones and printers
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'
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."
This has nothing to do with AT&T.
Apple has already announced an exclusive deal in France with Orange (France telecom), and it's this deal that is in danger because of the law. Apple is partnered with T-mobile in Germany and O2 in Britain, so this really isn't about any worldwide exclusivity for AT&T.
AppleInsider's report on this situation.
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.
I do believe the iPhone's edge is exclusively the UI, which Apple masters like no other computer manufacturer.
Good ol'e Steve is convinced, however, that only a tied-up customer can be conveniently milked, and therefore will also bundle it with an exclusive operator contract.
European customers were already fed up with the local operators, who were milking them to death via international roaming, before being forced to lower the price by an EU regulation (think of the FCC ever doing something like that...) not to go for even more getting handcuffed...
Will I buy the iPhone when it comes to Belgium? Certainly not.
Will I miss something? Ditto.
What I am actually looking for right now is an open source cellphone with 4G technology, so that I may write my own stuff, not a locked tin can which will burn like a interocitor (This Island Earth, remember?)...
And if it burns when I open it, then I want a free saucer ride, not a mail-in rebate...
The Force actually is with me.
...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.
You are dead wrong.
Sprint's unlimited Power Vision (3G) service is $15/mo for regular joes. We won't even mention the SERO plans that start at $30/mo for 500 minutes, unlimited data, unlimited SMS & MMS, unlimited mobile-to-mobile, and free nights/weekends starting at 7.
AT&Tingular charges $20/mo for unlimited data with 200 SMS/MMS messages.
Now, yes, T-Mobile and Verizon suck for users of any smartphones - but it's wrong to say Treo users always pay more.
I am not a lawyer, and this is not legal advice. For Entertainment Purposes Only.
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.
If i were to meet steve jobs right now i would slap him.
I bet the French even mandate that you use Arabic numerals on all cell phones. ;-)
This issue is a bit more complicated than you think.
I hate French; not the first time they make us look so stupid.
"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.
Before I started using iPhone, I thought that the lack of 3G was a minor disappointment in the design. After using it a few months, I realized that I'm in a WiFi hotspot so often that I really don't miss 3G. The applications perform well enough over EDGE to use them when I need to do that, which isn't very often. Sure, 3G would be great, and I'll be excited when the iPhone 3G happens, but the lack of this feature really is a simple design trade-off right now, and I get a better battery life in the current device in the trade. I get a great deal more use out of iPhone on a single charge than I ever did any previous cell phone, even the Motorola RAZR, and that phone was useful only for talking due to the poor quality or poor performance of the other features of the phone. iPhone WiFi is faster now than the fastest mapped out 3G protocols, and far faster than most current 3G implementations. WiFi was the right design choice for this device at this time. Apple figured that out by doing what they generally do with these choices. They stepped back from their gut level geek cool factor emotional response to the newest hottest technology, 3G, which you know they all wanted in this phone, and they said, OK, what do ordinary people really want? Fast, plus battery life. How do we give them both, in a world where 3G chipsets slurp too much juice? Wifi + EDGE.
If you mod me down, I shall become more powerful than you could possibly imagine.
I'm not really sure why this myth continues to propagate. iPhone has a SIM slot. iPhone has a SIM slot. It's visible on the top of the phone, with a tiny pin hole. Inserting a pin or paper clip ejects the SIM card from the slot. You can use this SIM in any other GSM phone.
If you mod me down, I shall become more powerful than you could possibly imagine.
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
You know the iPhone will remain only EDGE noy 3G in Europe. Outdated is putting it mildly.
It'll be sweet if he EU has Nokia's clone first. Nokia's clone might not have quite as slick a user interface. But I'll bet al the Nokia lovers prefer it. And there's no doubt it'll have way way more features.
The Christian religion has been and still is the principal enemy of moral progress in the world. -- Bertrand Russell
The consumer protection laws are meant to foster innovation and encourage competition. This kind of phone/provider tying is bad for competition and probably does a lot to keep phone prices artificially high. It's got little if anything to do with "socialism".
:-)
BTW, it's Apple's choice not to enter the European marketplace, not the EU's choice. There's no reason why they couldn't play by the same rules other providers are. Well, except they might have locked themselves in with AT&T.
Also, while TFS mentions Belgium I suspect Apple not entering this particular market has more to do with the lack of flat rate internet subscription plans than with the consumer protection plans. Luckily this is changing (slowly) but I doubt the iPhone would really work down here right now. Companies make boneheaded moves all around the world it seems. Surprise!
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.