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iPhone Business Model Hits a Snag in France
Posted by
Zonk
on Sat Oct 06, 2007 05:33 PM
from the open-is-as-open-does dept.
from the open-is-as-open-does dept.
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."
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Good news! (Score:5, Insightful)
Re: (Score:3, Insightful)
No, it means they can't get a product they want. It doesn't mean that they can get the product on different terms than the rest of the world can.
-jcr
Re:Good news! (Score:5, Insightful)
Re:Good news! (Score:4, Informative)
Re:Good news! (Score:5, Informative)
There are strong anti-tying directives, to keep the american-style business model (microsoft, walmart) from damaging the economy here. France has consumer protection laws at least as strong as those in Germany, and most countries here have varying levels of enforcement. The UK has some of the weakest consumer protection laws, and with OfCom, no enforcement whatsoever.
I've been hearing more iPhone rumors this week, the biggest is T-Mobile has put their rollout plans on hold because they could not show the regulator the required unlocking function or unlocked phones. O2 in the UK is safe, because even though they will be violating laws there, the fines will be years down the road and only then a tiny percentage of the profits made.
There are no other populous countries in Europe where the iPhone could be sold without an unlocked version. Apple has really shot themselves in the head with this move. By locking themselves out of the largest GSM market in the world, they can't hope to achieve any kind of marketshare.
the AC
Re:Good news! (Score:4, Insightful)
Nokia doesn't seem to have a problem making a profit selling unlocked phones, neither does SonyEricsson, Samsung, LG, HTC etc. Apple could have sold way more phones if it had been available worldwide, unlocked and without a plan, just like e.g. the iPod.
And they should have released in Europe first, by the time the iPhone was released in the US, it was high-tech for the US market, but not so much for the EU market. by the time it arrives in Europe, it's outdated. Sure it has a nice user interface, but it misses a lot of the features people expect, like UMTS or HSDPA.
Re:You have got to be kidding... (Score:5, Insightful)
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.
Exclusivity - bleh (Score:4, Funny)
Re:Exclusivity - bleh (Score:5, Insightful)
Yes. France disagreed with the U.S. about Iraq (and yes, even though their reasons for doing so weren't the most honorable, it's fairly safe to say at this point that they were on the "right" side of the debate). However, this was a criticism of a matter of foreign politics and policy, and not some sort of personal vendetta against the entire population of America (especially those evil industrial design firms in California!)
It was the US who took the issue way too far. Even though it was a joke, serving "freedom fries" in the senate cafeteria was terribly crass.
Surprise! The world does not hate Americans by default. Most of them don't approve of what the government's doing, but neither do 70% of Americans these days.
Actually Apple is popular in France (Score:5, Insightful)
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.
something is missing (Score:5, Informative)
also- from the link, the "5 year exclusivity agreement with AT&T" is only for US Distribution.
Re:something is missing (Score:5, Insightful)
Yes, hence the comment about grey-market imports. It's unlikely that AT&T would be happy with the iPhone being sold unlocked in any country, as those unlocked phones could then be imported into the US, despite the exclusivity agreement.
No, it wouldn't be as easy as if the iPhone was available unlocked in the US, and yes there are ways to unlock an iPhone, but that's not the point. If I were at AT&T and negotiated the deal, I'd have made damn sure that Apple were bound not to sell the iPhone unlocked anywhere, to make it that bit harder to obtain an unlocked one. Remember, you don't have to make it impossible, just hard or risky enough that that people can't be bothered.
US legality (Score:3, Informative)
Correct me if I'm wrong here.... (Score:5, Insightful)
errors in summary (Score:5, Informative)
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. [appleinsider.com]
Re:errors in summary (Score:4, Insightful)
This is probably Apple's original plan. A year from now we are very likely to see the iPhone for sale in 1/2 dozen markets, each locked to a single provider in that market.
Why iPhone can't be exclusive (Score:3, Insightful)
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.
What I'd like to know is..... (Score:4, Insightful)
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.
a note: iPhone uses an ordinary SIM, in a slot (Score:5, Informative)
Re:No worldwide exclusivity (Score:5, Funny)
Re:No worldwide exclusivity (Score:5, Interesting)
And a product sold in one country of the EU is available in every country of the EU (common market rules) so everyone will be able to buy one.
Re:The iPhone will be known as Steve's Folly (Score:5, Insightful)
It sold a million units in 75 days. How can I make my next product a "disaster" like that?
-jcr
Re:The iPhone will be known as Steve's Folly (Score:4, Insightful)
Re: (Score:3, Insightful)
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... ;)
France? Heh. (Score:5, Funny)