Economy

Apple iPhone heading down under – who is the lucky supplier?

SmartCompany /

Telstra may be close to a deal with Apple for exclusive rights to sell iPhone, judging from Sol Trujillo’s public admiration of the new super-handset in Macau yesterday.

Speaking at a mobile phone congress in Macau, China, the Telstra chief talked up the multi-functional toy’s popularity in the US and said he was sure Apple was considering a 3G version of it. In the second time in two weeks Telstra has talked about iPhone publicly, Trujillo said any deal discussions would depend on “matching their needs with our needs”.

Nathan Burley, Ovum telecommunications analyst, expects the iPhone will sell well in Australia, as it has since it launched in the US in June and UK and Germany last week. “Depending on service pricing, plans it is bundled with and upfront costs consumers have to pay, it is a desirable price and I’m sure it will be quite attractive,” Burley says.

Telstra has the largest coverage of any network with its 850GHz 3G network, but currently, the device is only produced to the 2.75G global standard, or the Edge network.

On top of concerns about a 3G-compliant model of the nifty handset, revenue splitting is expected to be a bone for contention between Apple and Telstra, with some of iPhone’s dealers in Europe believed to give Apple 20% of profits.

Ovum’s Burley says Apple is pushing into new territory in terms of how iPhones are priced and how revenues are divided with carriers. “In Australia, most customers sign up to a 24-month contract and get a free handset upfront. Nokia, for example, doesn’t get money on call spend.

“It would be interesting with iPhones, because Apple seems to be pushing into new territory where it also gets a percentage of handset usage and service costs.”

An Apple spokesman says the iPhone is on track to enter Asian markets in late 2008, but declined to comment on which Australian supplier Apple would partner with.

But Telstra and Apple have been growing close. In August, ASX-listed Telstra reseller Fone Zone bought Australia’s largest network of Apple stores, Next Byte, followed by the purchase of Apple support and rentals business Frequency Communications in October.

As at September, Apple had sold 1 million iPhones globally. The California-based company looks set to partner with China Mobile to distribute the iPhone in China, and discussions are said to be underway in other Asian countries.

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