IPhone available soon in South Africa, Need cheap replicas for Africa

Fin24 reported this morning that the IPhone will be available in South Africa. Often i have conversations like this with people regarding the phone

Friend: So how is that phone?
Ismail: The best phone i have ever used
Friend: But you cant MMS / It doesn't have 3G / You cant forward SMS
Ismail: yes, but it's still the best phone i ever had

Now, please note i have never been an Apple Fan having said that, it is the best phone i have used thus far. Iphone is impacting on mobile internet usage like how blackberry did on mobile email.

Recently a guy ran the girl friend/wife/significant other usability test on Ubuntu Linux, basically to see how easy it is for a non tech savvy user to complete basic functions. The IPhone passes these with flying colours. All my previous phones (HTC, Nokia) failed dismally with functions other then calls and SMS.

I believe this is important. Lets take a look at how access to communications can stimulate economic growth and raise the quality of living.

In a study (PDF) by Harvard economist Robert Jensen he reported that when mobile phones were launched in kerala in 1997, Fisherman used the phones to call local markets while still at sea. This in turned helped raise profits by 8%, lowering consumer prices by 4% and reduced catch wastage from 6.5% to practically nothing.

This is just with access to voice communications, now imagine what easy access to knowledge and information (The Internet) would do?

Mobile phones have been available for a decade in most parts of Africa and there are more people with mobile phones then computers. Africa only has about 4% Internet penetration compared to 29% mobile penetration. Also remember that a number of people using mobile phones in Africa may never have had access to computers or the internet growing up. The environment in Africa may be best for mobile internet. Though mobile internet has been stifled by high data prices, cost of handsets and complicated interfaces.

So what does this mean?

I do not expect the IPhone to actually make a difference since Apple caters for the higher end of the market. Though Nokia has been been working in Africa and if they can develop something similar just as intuitive with easy access to the internet at a much lower price they would win back a fan. With data prices lowering this would allow masses of people access to the large body of knowledge found on the internet. Good times ahead!

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The reason behind Apple Iphone shortages & the business model

There have been numerous reports of iphone shortages in Apple stores in the US. Check out news24 for the latest article on this or this article which speculated the shortages were due the launch of a 3G version. The main reason seems to be unexpected demand from the grey market (Imported via improper channels) and a large portion of these phones are displayed in stores here in Dubai.

The owner in this store even put a little sticker on the boxes with contact details and 'distributed by'. I asked him if he could get me 100, he said he would need two weeks. I wonder if Apple stores in the US can match that?

Suddenly everyone seems to have an Iphone, everyone seems to be walking around with those signature white buds in their ears.

This though does come with its problems other then Apple stores with out stock. Take into consideration that most people are buying the phone on the grey market knowing the following:

- There is no support or warranty
- The battery cannot be changed and has to be sent back to Apple, without it being bought via the official channels this could possibly mean the phone cannot be used if the battery is faulty in the phone or recharge cycles being used up
- You have to 'unlock' / 'hack' the software everytime a new update is released
- Uncertainty if a particular update will brick your phone

Yet people are still buying the phone. Apple has created such a brilliant phone that even people who dont own Macs, ipods and are not Apple fanatics are jumping at the chance to pick one up. Even with no advertising or marketing.

When you consider the business model used in the US / UK, exclusivity and the operator paying Apple for each new customer, you realise this model may not work everywhere. Lets take a look at some of the reasons:

- AT&T pays Apple for customer acquisition. Now consider a case like the UAE, where mobile penetration is in excess of 110% (People have more then one phone) there is no reason to use the phone to drive customer acquisition. Also in most other parts of the world there are a few operators with significant market shares who do not need exclusivity with a particular handset to drive market share like AT&T did.

- Operators tend to subsididze mobile phones, even offering them practically at no charge. With the additional costs, the model of subsidizing the handset fully by operators is unlikely.

- With the demand for grey market iphones, operators are receiving the benefit of increased data usage without any payout to Apple. They could also capitalize on this market by offering a flat fee on data usage without ever signing up for a deal with Apple.

- The mobile market has been plagued for years with unlocking, operators subsidize handsets the customer signs up for the contract, unlocks the phone and stays on his original network. Also to date there has never been phone that was not successfully unlocked within a short space of time. The battle against the unlockers is a loosing one.

- Every manufacturer out there is planning an Iphone Killer, and if the handset is just as good without the Apple business model who do you think operators will choose?

All of this makes a deal with Apple very unattractive, hence my statement in this post about Apple needing a more attractive business model. They need to rethink their business model in the rest of the world. Especially if they want to achieve a healthy market share in the mobile market and knock the likes of Nokia out.

How?

They could drop the entire business model of the operator paying them back for each acquisition as this does not make sense for an operator who already dominates the market. They concentrate on offering consumer services such as ITunes (Music,Applications & Conent). They should also integrate the phone more with the network, as they did with visual voicemail which is unusable in other parts of the world, an example would be location based services and content delivery.

With the release of the 3G iphone, they could offer Youtube / ITunes over 3G, making the deal more attractive and with this a revenue sharing agreement based on data usage of iphone users. Operators would also benefit as they could finally start seeing some ROI on their 3G roll out & licensing costs.

Now.... that would be a winning formula and when ill be investing in Apple stock.

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iPhone Location Spoofing & Location based services

I have moved, read more about Iphone Location Spoofing & LBS

A team of researchers have found that your location can be spoofed on the Apple iPhone. This was bound to happen considering the technology being used (Skyhook’s WiFi Positioning System). You can read the full article at cellular news.

The use of sky-hooks system is a useful addition to the iPhone and makes sense when you consider that the iPod Touch does not have GSM capabilities. Though this is not the best and most reliable solution for the iPhone considering the GSM capabilities.

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Unsurprisingly Nokia's market dominance is slipping

Read the full article on Nokia's Market Share at the new blog

Recently one of the news agencies i subscribe to ran an article regarding a global survey on mobile phone usage by teenagers. Unsurprisingly, Nokia seems to be less popular.

"Nokia's dominance at the top of the global chart has been weakened over the last 18 months. In the survey, conducted across 31 countries by Habbo, it is clear that Nokia has lost some favour with teens to Sony Ericsson and Samsung since autumn 2006"

"Despite still being the favoured handset in 15 of the 31 countries polled, Nokia loses out to Sony Ericsson in markets such as the UK, Germany, Denmark and Switzerland. In all of these markets Nokia ranked first in 2006."

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