iPhone: here it comes

Matthew JC. Powell
9 April, 2008
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We don’t normally run rumour stories in AMW, but this one’s getting a bit too loud to be dismissed as rumbling. The Apple reseller "grapevine" has been abuzz this morning, with numerous sources now telling AMW that the iPhone will be released at the end of June or the beginning of July. While there has been no official public announcement from Apple yet, it is believed that the company has briefed its resellers on more detailed plans. Among the other tidbits: no network will have exclusivity and any Apple reseller — not just telecommunication resellers or Apple-owned stores — will be able to sell it.

Apple is notoriously tight-lipped about announcements such as this, and it appears to have told different resellers different things, possibly in order to "muddy the waters". Within the last few hours AMW has been told the iPhone would not be released in Australia until next year, then that it would arrive in June, then that it would arrive in July — all from reliable sources. Community web site MacTalk Australia this morning ran a story that it would be released in the last week of June, apparently also sourced from reseller contacts. It’s possible that different outlets are going to have access to the device at different times, but more likely that Apple has put multiple stories out to avoid the actual date becoming public too early. Notably, the 3G iPhone has not yet appeared on the United States Federal Communications Commission (FCC) web site indicating pending approval. Most phones hit the markt about 60 days after appearing on the FCC site.

For its part, Apple denies having briefed resellers on any such thing and says there is, as yet, no Australian release date for the iPhone. One thing is apparent, though: the market is getting impatient.

Our sources do agree that, as predicted on AMW online, there won’t be an exclusive carrier of the iPhone in Australia, but any network that wants it can carry it. Potentially, this means that features like the "visual voicemail" — which requires network-specific back-end technology — might not be available. By the same token, it could mean that all networks will end up installing the services required to provide that feature, rather than missing out on a competitive advantage.

There’s no word on whether the iPhone available in Australia would only be the 3G version, or whether the EDGE version currently available overseas would also be available, possibly at a reduced cost. The iPhone’s use of EDGE data networking has prompted speculation that Telstra would be the only viable carrier of the iPhone, since it is the only Australian carrier with an EDGE network. Telstra, Optus, Vodafone and of course Three all have 3G networks.

Perhaps the most interesting aspect of the buzz this morning is that some of it has come from Apple resellers who currently do not provide phones. Apparently any mac reseller will have the option to stock iPhones if they so choose, meaning obviously that there will be an option to buy the phone upfront without being tied to a network at all. Several European countries offer such an option, generally with the non-networked iPhones costing significantly more. Obviously we have no concrete informatiuon about pricing plans at this stage so this is all speculation.

Apple’s Worldwide Developer Conference takes place in June, and the iPhone 2.0 software — which includes the ability to install third-party applications via the iTunes-like App Store — is slated for availability in July. Whether the phone would be released in Australia only weeks before such a major update is an interesting question, and raises another interesting question, namely regarding the cost of the upgrade. In January the iPhone 1.1.4 software was released for free to iPhone owners, while the same software cost $25 for users of the iPod touch (which is basically the same device but without a phone or a camera). The reason for the difference was US accounting laws that require companies to charge for upgrades that add features after the purchase of a product. Where the iPod touch is purchased outright, so Apple gets the revenue all at once, the upgrade was required by law to cost money. The iPhone, with its costs amortised over multiple years, can add features without strictly being "after purchase" — so the upgrade was free.

If the iPhone is available for upfront purchase much like an iPod touch in Australia, what will that mean for software upgrades? Will customers buying one in June be slugged for an extra $25 in July? Obviously we can do little more than speculate at this stage.

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