iPhone could struggle in Asia

2008-07-07 09:40

Hong Kong - Mancy Li wants to get her hands on Apple's newest version of the iPhone, but she won't bother to queue up in Hong Kong when it is released in Asia this week.

"I want to get one because it is trendy. It has a touch screen, it looks pretty and it's made by Apple," the 22-year-old visual arts student says.

But she's prepared to wait and see what happens to the price of running the new version of the phone, which Apple hopes will become as big a global hit as its iconic iPod music player.

The iPhone 3G, which Apple is billing as twice as fast and half as expensive as the debut model, rolled out in cities from Tokyo to Sydney on Friday - but it could face challenges in Asia it will not have elsewhere.

The company is betting the new phone's third generation (3G) capabilities, such as faster internet access and file transfer, will make the phone a hit. Like the first version, the new model also has an iPod built in.

Many analysts are upbeat about its prospects, seeing Apple as a brand with a strong cachet in tech-savvy Asia.

"It is going to do well," Aloysius Choong, of Singapore-based industry research group IDC, told AFP.

"Apple is a strong brand in Asia and this is their maiden mobile phone offering in Asia. Just the Apple aura or the Apple halo means that there will be non-Apple users who will look at the product."

Black market

But in a region where having the latest gadget is almost an obsession, black market debut-version iPhones are already widely available, serviced by countless shops that "unlock" the software to allow them to operate.

With the phone already in circulation, the novelty factor will be less, which could emphasise the importance of pricing for the new model.

And that could prove to be an obstacle. Like elsewhere, Apple is only allowing the iPhone for sale through a limited number of operators - whose pricing plans are not always particularly inexpensive.

Hong Kong users could pay the equivalent of up to $65 a month under a two-year contract, a steep price in a market where monthly mobile packages often cost one-fifth of that.

In Australia, Telstra says customers who sign up for packages around $30 a month will be able to buy the cheapest iPhone 3G for around $270.

Pricing has not been announced in New Zealand by Vodafone, the country's largest mobile communications carrier, but is likely to be crucial in deciding the iPhone's success.

"If Vodafone can get close to Telstra's pricing in Australia, I think they will be on to a winner," says Scott Bartley, reviews editor of PC World New Zealand.

The iPhone could also face an uphill battle in Japan, where handsets allow users to watch television and pay for goods like a credit card - neither of which the Apple phone can do.

'Not technologically superior'

"I can foresee the iPhone storming the rest of Asia but not Japan," said Yusuke Tsunoda, a telecom analyst at Tokai Tokyo Research Centre.

"Compared with Japanese cellphones, it is not technologically superior."

In the Philippines, meanwhile, where text-messaging is now a routine way to communicate, the phone's on-screen keyboard - instead of the regular buttons of a traditional cell phone - may be a turn-off.

"This could limit its appeal to the Filipinos, who love to text," said tech journalist Kendrick Go of the Manila Times.

He said pricing could also be a factor in the Philippines, where much of the population lives on two dollars a day or less.

"The iPhone's popularity in the Philippines will likely be confined to the high-end market," Go said. "It is just too expensive for the average consumer."

Finally, some consumers could be turned off if the iPhone becomes too much of a success - and loses its cachet as a status symbol.

"Apple wants to make a big impact but it does not want to make too big an impact in the sense you want to create an image of scarcity and exclusivity," said the IDC's Choong.

Mancy Li, in Hong Kong, says the iPhone would lose its appeal for her if everyone had one.

"I won't get one if I see too many people using it," Li says. "It won't be special anymore."

- AFP