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Appy days for iPhone in China

By Jules Quartly (China Daily)
Updated: 2009-06-24 09:59

They don't sell iPhones at Apple's flagship store in Beijing but this has not prevented thousands of programs being developed for Chinese users who have managed to get their hands on one.

These applications - "apps" in Apple jargon - are being rolled out at a frantic pace as local software developers jump on the iPhone bandwagon and churn out content for users both here and overseas.

The biggest local player is HandCN, part of Colorme (Beijing) Info Tech whose CEO, Shi Weixing, believes the smart phone is a revolutionary appliance that is transforming the way we learn, play and interact. Nor is he deterred by the fact the iPhone operates in a legal vacuum.

HandCN's team of 40 people was formed last year to meet the iPhone challenge and is now well placed to cash in on the huge demand for programs. The market is set to grow exponentially when Apple reaches agreement for iPhones to be sold in China.

"At present, our apps account for 3 of the top 10 in the Chinese market. After iPhone's entry into China we will be the largest developer in China," Shi says. "When we have accumulated lots of experience on this platform we can successfully and smoothly cooperate with more platforms, such as Ovi by Nokia, mm by China Mobile and other marketplace software."

China's regulators have yet to approve the iPhone for sale here because of squabbles between Apple and local telecom operators over revenue sharing, technical issues and competing business models.

This has led to the bizarre situation of a product made in China (at Foxconn's massive plant in Shenzhen) not being legally sold here, the world's biggest mobile phone market. You cannot even buy iPhone accessories at Apple's one-and-only official China store in Beijing's Sanlitun.

Nevertheless, it is readily available at electronic malls in stores that are branded "Apple authorized resellers" and sell unlocked or "jailbroken" ones, thereby allowing non-Apple software to run on the phone.

There are possibly more than 2 million iPhone owners in China, according to Duncan Clark, chairman of the respected Asia-based BDA telecom consultancy, who says: "Many Chinese consumers buy smuggled phones or arrange to import them from outside the mainland, especially Hong Kong.

"All telecom operators are afraid of the disruptive nature of the iPhone, as it can marginalize telecom operators to mere 'dumb pipes' with application revenues going to Apple and to developers."

Among the sticking points for an official iPhone release are security concerns over the iPhone's WIFI (wireless) capability. This can be overcome, says BDA analyst Liu Ning, who is confident a breakthrough is imminent. "I expect China Unicom to launch iPhone in Q4 this year," he says.

That should dovetail neatly with the introduction of iPhone's just-released 3GS, which offers improved speed and more functions.

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