Catshanghai

The 3G Iphone has just been unveiled by Steve Jobs at the WWDC. The world wide launch date is July 11th when it will go on sale in 70 markets including Canada, Hong Kong and Australia.

The inclusion of Chinese handwriting recognition suggests they have their eyes on the Middle Kingdom. If you ever go to downtown Shanghai you will already see imported Iphones everywhere. An official launch is long overdue except that mainland China is not on the list of countries where the 3G Iphone will be launched. The other problem is that the new phone needs in-store activation. This makes it more difficult to get hold of unlocked handsets from the US to export to China. I expect local suppliers will need to source the Iphone from Hong Kong.

Iphone 2.0 is slimmer than its predecessor. It has better battery life, gps tracking and third party apps will be available to all lphone users from the Itunes store, which is not accessible to Chinese credit card holders. Those using jail broken handsets have been able to install software such as messaging and drawing programs since DVD John first cracked the device soon after it was launched last summer.

The biggest upgrade in the new Iphone is the inclusion of a 3g Chip to access HSDPA data networks for high speed mobile data networks. This will make it possible for Iphone users to stream audio and video using their handsets wherever they may roam even if it is not in range of a wifi hotspot. There is a catch for 3g Iphone users in China. HSDPA is not supported on the nascent 3G network that is being trialled in Chinese cities. China Mobile has just launched its own homegrown 3G standard called td-scdma. It looks like the Chinese Iphone will need to have its own td-scdma chip or find a way to make the handset play nicely with China’s high speed network.

Price is another mystery. The original Iphone went on sale in the US for $600, but the price soon tumbled to $399 for a 16 gb model. The new version appears to be even cheaper at $199 and $299 for the 8 gb and 16 gb models. The new handset is more expensive than it appears, because US data plans have risen to $30 a month so the cost of the phone increases over a two year contract by $40. It is not so easy to predict the cost of the 3G Iphone in China, because handsets are always unlocked so users tend not to be locked into expensive tariffs. Therefore, handsets are not subsidised by the networks trying to dupe customers into accepting long term contracts. Unlocked Iphones have recently been traded in China for less than 4000 RMB, but the price of the new handsets is less certain for the time being.

It is not a good time to buy an Iphone in China, because the new 3G version will go on sale after July 11th. On the other hand, it may be an excellent time to pick up a bargain first generation handset as suppliers get rid of their old stock or early adopters trade them up for new models. If you are not in the market for gps and are not bothered about waiting to see if 3G will be supported then you may be very happy using an Iphone 1.0. Don’t make the mistake of buying a first generation handset expecting second generation features. I’m sure some naive shoppers will fall into this trap.

The Iphone has sold 6 million handsets world wide. In spite of the hype, it continues to be a minority niche product compared with better featured phones from RIM (Blackberry), Nokia and HTC. Even though the Iphone has still not been officially launched in China, it has still managed to etch itself onto the minds of aspirational Chinese as an icon of style and status. The Iphone will continue to be ostentatiously displayed at Starbucks and restaurants in big Chinese cities for months and years to come.