Could the iPhone kickstart ME mobile web?

Would a local launch of Apple's new iPhone 3G help get the Middle East's mobile web services moving?

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By  Mark Sutton Published  June 11, 2008

No surprises on Monday night then, as Apple unveiled the iPhone 3G. The new handset will do everything we'd expected, at a lower price than before, and so on and so forth, but unfortunately, unless you are in Egypt, Jordan or Qatar - sometime in the next year or so - then most Middle East users aren't going to get their hands on one.

Apple's lack of interest in bringing the iPhone to the Middle East is a source of considerable annoyance to many in the region, and not just to the die-hard Apple fans. While unlocked iPhone handsets are likely to make an appearance here soon enough, having a grey market handset is not ideal, given the possibility that an Apple software update might ‘brick' your handset.

So why isn't Apple interested in bringing iPhone here - especially given the insane mobile penetration rates and high disposable incomes of the Gulf?

For starters, Apple is working with existing partners global partners, most likely to preserve the quality of the user experience around iPhone - meaning if you buy it, that its supported, can access content, and so on - and of course to create that buzz of exclusivity around the device.

With thousands of mobile operators worldwide, Apple simply can't build relationships with all of them over night, and particularly for the Gulf, the subscriber numbers for operators only rank in the low single-digit millions at best, a drop in the ocean compared to most European or South American countries, and nothing when compared to India or China.

Apple also seems to be very keen to stick to selling the iPhone as part of a contract, not the model that's predominant here. While the handset was unlocked fairly easily, leading to millions of handsets reaching countries outside of the official territories, there is a difference between selling a device that can be unlocked by some warranty-voiding tinkering and selling one that is intended to be unlocked.

On top of that, Apple seems to have scant regard for the Middle East anyway, working exclusively through partners across the region, with no investment of its own in marketing or support, so its not really surprising that the company isn't rushing to push out a flagship product into a market where the company itself isn't around to support it.

All of which means that I don't think we will see an iPhone launch in the UAE or Oman or Saudi any time soon.

Which I think is the Gulf's loss. The figures for iPhone usage quoted by Apple CEO Steve Jobs are very interesting - 98% of iPhone users are using it for browsing, 94% are using email, 90% are using SMS and 80% are using ten or more features. While these figures are based on existing Apple fans, and also I suspect US Apple fans, they would suggest a massive uptake of mobile features such as browsing and email that can't, so far, be matched in this region.

The mobile web landscape in the US and Europe is different to the Middle East, and although services are coming through, they have tended to be fairly narrow focused, and confined to sports, but there are quite a few young mobile web companies out there that are full of ideas, that just need a push to get going.

There are also plenty of smartphones in the market already, Nokia in particular stands out has having the same understanding as Apple of how to create a good user experience, but there just doesn't seem to be the same buzz around mobile web. In a chicken or egg situation, lack of content will put off some consumers, but I think that with the hype of a local iPhone launch, service providers would get the shot in the arm they need to ‘build-it-and-they-will-come' and finally get the Middle East mobile internet off the ground.

3688 days ago
DCDC

Apple still haven't learn their lesson from Microsoft. Rather than just focus on the product they insist whole world to follow their partnership deals. Sure result will be Chinese or Korean firms to make a similar product which will work on any service provider. That will never made Mr Jobs smart thinker. He is making competitors richer and smarter. Apple to do the research and others to enjoy the profits. Mr. Jobs, your team should be smarter than this.

3688 days ago
Ken

Good Comment Roy, just one slight inaccuracy. When comparing the locked subsidized iPhones to gray market unlocked ones, you should not take the full cost of the two year contract into account. While true you have to sign up for one, it is easily terminated early by paying a fee of about $175. This fee is essentially in place for ATT to recoup the subsidy and is standard in the US. So the price would be about $400, still a far far cry from the AED 3000 being charged in Dubai for it.

3688 days ago
Roy Verrips

Hi I found your article very interesting, however I believe it fails to highlight what I feel is the biggest significant cause of the lack of "buzz around Mobile" in the Middle East - The Telco's. Unlike most other regions the Telephone Operators/ISP's (from here on referred to as Telco's) aren't driving the features the way they should, neither are they partnering with the likes of suppliers like Nokia and Apple. Saying your phone users are surfing and using e-mail is one thing, saying they're doing it using EDGE or 3G and not Wifi is another - Then saying the EDGE or 3G they're using a new revenue stream not simply an existing one being rechanneled, adds another aspect of reconning. AT&T and their exclusive partnership with Apple is (I think), heavily rooted in the potential additional revenue they earn from Apple users utilising their 3G network, and thus AT&T can subsidize the cost of the iPhone, knowing in return they'd get a two year contract from the subscriber, and he'll most likely be adding an additional $30 to $40 for 3G/EDGE services. Most Telco's in the Middle-East can't offer Apple these kind of deals as they don't offer term contracts - If you go through the list of available countries for the iPhone it's startling to think a country like Botswana, Dominican Republic or Equador have something we don't have in Dubai, but they do - An ISP that'll only sell iPhones if purchased with a two year contract. Yes, the phone will be available in Jordan, Egypt and Qatar, but only from the Telco's there who have deals in place with Apple, and although we might think it's a cheap US$299, that's the price if you're taking with a two year contract - To buy one, illegally "crack" it and use on the network not currently provided/supported by Apple would result in you needing to pay the 2 years of contract fees regardless, pushing the price way above what it is now ... So to answer your question: "Can the iPhone MiddleEast Mobile Web" - I'd say not, it's upto the Telco's to adapt to the handset makers (like Apple) and work together allowing for both to profit - I sadly don't see that happening very soon ... (But maybe that's just me)

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