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Apple To Sell Wi-Fi-less iPhone In China
Hugh Pickens writes "Business Week reports that the Chinese government has received an application from Apple seeking a Network Access License to sell the iPhone for officially-sanctioned use in the country. However, the application is for an iPhone that does not include Wi-Fi connectivity, a sticking point in negotiations with the Ministry of Industry and Information Technology, which wants the phone to only run on the cellular networks. 'Apple was hellbent on having the iPhone be Wi-Fi-enabled,' says analyst Matt Mathison. 'The Chinese government has been just as adamant that it not be.' For many years now, China ministry officials told wireless consumers that Wi-Fi would not be allowed on mobile phones for fear that consumers might be tempted to illegally load VoIP apps and make calls over the Net, undermining carriers' interests. However Glenn Fleishman says that China uses WAPI, a homegrown proprietary extension to Wi-Fi that only a handful of Chinese manufacturers have access to, and that equipment sold in China must have WAPI support and chips made in China. Fleishman speculates that China's WAPI standard contains backdoor technology to allow China to monitor any communications sent over 'secure' links."
I live in Shanghai. If you are on the subway during rush hour in the morning or evening, I challenge you to look around and not see someone with an iPhone. They are everywhere here. There are stores within 200 meters of my apartment that have iPhones for sale. This is a silly argument. The iPhone is readily available in China.
Here is the more interesting point. The iPhones here are all smuggled in, mostly through Hong Kong. Since they have been smuggled in, you don't have to pay import taxes. If Apple gets permission to sell an "official" iPhone, no one will buy it because you will still be able to buy a gray market iPhone for 30% less. Why would anyone pay extra for an official iPhone?