How Bell Canada got the iPhone
A Bell Canada (BCE) press statement Tuesday made official what the Canadian press has been reporting since Monday: that the company, in partnership with Telus Corp. (TU), will start carrying Apple's (AAPL) iPhone in November.
The deal puts an end to the exclusivity that Rogers Communications (RCI) has enjoyed — to the dismay of many Canadian iPhone owners — for more than a year.
It's news that is likely to be closely watched in the United States, where AT&T's (T) exclusive contract with Apple is expected to expire next year — opening the door, in theory, for Verizon (VZ).
But only if Verizon's network can be upgraded in time.
Report: Four new iPhones are board certified
Piper Jaffray's Gene Munster has been saying for more than a year that he expects Apple's (AAPL) to introduce a "family" of new iPhones in 2009. On Monday afternoon, less than a week before the start of WWDC, the company's annual developers conference, two reports surfaced that suggest his expectations may finally be realized.
- An unnamed "trusted source" told Engadget's Chris Ziegler that the PTRCB — the board that certifies that new cellular devices comply with GSM network standards — has approved new iPhones with 4GB, 8GB, 16GB and 32GB capacities. The PCS Type Review Certification Board was established in 1997 and includes AT&T (T) among its members
- The Boy Genius Report, a site with unusually good sources in the telecommunications industry, posted what appear to be leaked snapshots of Fido Solution's product roadmap for the second and third quarters of 2009 that include one slide showing a $99 4GB iPhone 3G. Fido, formerly Microcell Telecommunications, is a subsidiary of Rogers Wireless (RCI), Canada's largest cellular carrier.
Neither report has received independent confirmation and there are elements of the second that raise eyebrows. Among the specs listed in the Fido snapshot is "Video Calling (iChat)" — a feature that would require a camera mounted on the front of the iPhone. This is not inconceivable, but it would give the new iPhone two cameras — one on the front for iChat, the other on the back for normal photos and videos. That's a lot of optical hardware for $99.
Finally, the real iPhone
There’s a theory favored by savvy Apple watchers that the first generation iPhone — greeted with such hoopla last year — was not actually the real thing.
That iPhone –Â the one that hundreds of thousands of Americans queued up to buy for up to $599 apiece, the one that Time magazine named the Invention of the Year, the one that six million people purchased before Apple finally stopped making them in May –Â was just a trial balloon floated by Steve Jobs to test the airwaves.
According to this theory, the real iPhone – the one aimed at the broadest possible market here and abroad — would start at $199, the magic price point at which consumer electronics devices seem to take off and become mass market phenomena. It would have built-in GPS location tracking, "push" e-mail, and wireless syncing with corporate enterprise networks. Most important, it would run hundreds of third-party applications available through an online App Store and operate over so-called third generation (3G) cellular networks that are two to five times faster than the one used by that first, prototype iPhone.
If this theory is true, then the real iPhone era begins on Friday, July 11, at 8:00 a.m.
That's when the iPhone 3G goes on sale at Apple (AAPL) and AT&T (T) outlets in the United States and at the stores of Apple's cellular partners in some 20 other countries around the world. (Strictly speaking, the era begins early Thursday, when the device goes on sale at 12:01 a.m. New Zealand time. Given how the Earth turns, that corresponds to 8:00 a.m. July 10 at Apple's New York City flagship store and 5:01 a.m. at its Cupertino headquarters.)
Some things about the new iPhone haven't changed. Physically, it's almost identical to the first. Same touch screen, same dimensions — except for the back, which is slightly bulgier and made of black plastic instead of metal.
Conceptually, it's still one device that combines three of today's most popular technologies — cellular communications, portable digital music and wireless access to e-mail and the World Wide Web.
And the fundamental breakthrough is the same: unlike most devices that combine several functions and do none of them well, the iPhone puts together three must-have functions and does at least two of them better than they have ever been done before.
Early reviews suggest that the one thing the first iPhone was not particularly good at — telephony — is much improved in the second version, thanks to a redesigned audio system and, perhaps, improvements in AT&T's network.
There's still no physical keyboard, so devotees of RIM's (RIMM) BlackBerry who were turned off by the lack of tactile feedback when dialing or texting on the first iPhone are not likely to be turned on by the second. The battery is still not user-replaceable, a shortcoming that may be even more important this time given the power demands of operating at 3G speeds. (One early reviewer who was getting nine hours of Internet use on the first iPhone clocked less than six hours on the second. See here.)
The built-in camera is the same under-2 megapixel device that can't do video. There's still no way to cut and paste text. And you are still married to AT&T's cellular network for the life of a two-year contract, at least in the United States. In fact, the bonds of that matrimony may be even stronger this time around, given the way AT&T has set up the in-store activation procedure, and will cost U.S. customers at least $10 a month more.
There are many small improvements. You can search address books, delete e-mails en masse, set parental controls and save e-mailed photos. (These improvements will also be available to owners of the original iPhone as part of a free software upgrade.)
Investors will note that Apple has made major changes in its business model. Rather than testing the waters with a handful of exclusive contracts — first with AT&T, then with O2 (TEF) in England, T-Mobile (DT) in Germany and Orange (FTE) in France — Apple has gone global this time, with deals in six of the seven continents and more than 70 countries. To do this, however, it has had to largely abandon the arrangement — unique among cell phone manufacturers — by which carriers sold the iPhone for full price and kicked back a share of their monthly revenue to Apple, which was accounted for in monthly increments over the life of a cell phone contract (usually 24 months).
Steve Jobs was able to dictate these terms — quite advantageous to Apple — because the carriers recognized that being first to sell the iPhone would win them thousands of new customers. In most of the new markets Apple is entering this year, it is acting more like a conventional cellphone manufacturer, taking its (sizeable) profits upfront and letting the carriers subsidize the device with voice and data plans as costly as local market conditions will allow. (See Canada's Rogers Communications (RCI), here for example, to see what kinds of problems this can lead to.) The price of the iPhone itself also varies widely, from as much as $888 for pre-paid phones in Italy to $75 in Mexico and free with certain data plans in the U.K.
Except for those costs, none of this affects the experience of the users.
For them, what will really distinguish this iPhone from the one that preceded it — and from every other smartphone out there — is the flood of software expected to be unleashed when the App Store opens on Friday. Apple has already demonstrated more than a dozen third-party programs for the iPhone, and over the next few months you can expect to hear about hundreds more: business apps that take advantage of the iPhones ability to "push" data down the network when it's available (rather than when it's requested); games that use the device's accelerometer to navigate virtual space; shopping and social networking programs that use satellite tracking to tell you what shops or restaurants and which of your friends (or enemies) are near the spot where you are, right now.
In the end, every successful computing device is ultimately a software "platform," a vehicle for the programs that give it its true value. This is where the real iPhone will stand out, and judging from the interest among the 4,000 third-party developers who have already signed up to write for it, it's got a good headstart.
Apple-Rogers falling out: A story too good to be true?
Daniel Smith, a Canadian sales and marketing consultant with an eclectic blog called Smithereens, posted on Saturday what he called "a very plausible rumour" about the launch at of Apple's iPhone 3G on the Rogers Communications network.
The gist of the post — entitled "Apple Flips Rogers the Bird" — was that Apple and Rogers, Canada's largest mobile carrier, have had a falling out over the negative publicity generated by Rogers' pricing plans for the new iPhone that goes on sale Friday morning. Rogers' plans require a three-year contract, have no unlimited data option and, compared with comparable AT&T (T) plans, offer a third of the calling time and half as many text messages. (See here for the petition for rate relief that has gathered more than 43,000 signatures and here for the Vancouver Sun editorial urging customers not to buy an iPhone.)
The net effect, Smith claims, is that "thousands" of Canadian part-time workers hired by Rogers have lost their jobs and untold numbers of iPhone 3Gs earmarked for Canada have been diverted to Apple's European partners.
On Friday, wrote Smith, "while the American giant slept, the Canadian telecom industry was a-buzz with information, albeit all of it internal and very hush-hush….
- First, an employee of Apple Canada sends a text message to my source that says something to the effect of: "You guys are screwed for iPhone," but will not respond to multiple replies asking for clarification.
- Next, an employee at competing handset manufacturer RIM (Blackberry's parent) (RIMM)Â sends my source a text soon after saying there are rumours of an Apple-Rogers fallout.
- Then, my source receives a call notifying him that all the part-time staff who had been hired for next week's launch have been fired without notice.
- And finally, a senior Rogers rep confirms to my source that Apple has decided to divert a large percentage of their planned Canadian shipment to Europe and that each Rogers store may now be getting as few as 10-20 units. This is ostensibly due to Apple's displeasure over Rogers' high data and voice rates." (link)
Not surprisingly, given the passions surrounding the iPhone 3G release in Canada, Smith's "plausible rumour" soon took on a life of its own. By Monday it had risen to the first page on the Techmeme news aggregator and spawned more than a dozen secondary posts.
But none of the follow-ups have been able to provide independent confirmation of any details in Smith's story, and now Smith himself is backing away from some of his claims.
In a Sunday update he added this caveat: "Apparently, only certain dealerships took on additional staff for the launch, although most urban locations did. Also, some dealerships may not have let all their iPhone help go, but others definitely have. It's important to clarify that any decisions to let staff go were made at the individual dealer level, and not by Rogers corporate…at least not directly."
In a second update he replaced the phrase "ostensible due to Apple's displeasure" with "possibly due to Apple's displeasure" and added this:
"Although no per-store numbers can be confirmed, the verbiage used by head office is apparently that numbers will be "significantly reduced" and that stores should "exercise caution" not to over-promise. Europe has also been reconfirmed as the destination for the allegedly diverted units."
Finally, he showed up on The Mac Observers' Apple Finance Board to post what he called a "pre-emptive defence."
"This could be something as simple as a shipping or production delay that's been blown out of proportion. I haven't ruled that out. … Something's definitely up, whether it is indeed an Apple power play is up for debate." (link)
Indeed.
Neither Apple (AAPL) nor Rogers (RCI) have commented on the rumors.
UPDATE: In a private message, Smith says his estimate of "thousands" of temps laid off by Rogers, which he posted in an online forum, was an extrapolation, and that on reflection "hundreds" is probably more like it. "I misspoke in that forum entry and I apologize," he writes. "It is unfortunate because the intent of the story was not to spread untruths, and I have been trying to clarify and add to the conversation as much as possible to avoid doing so."
UPDATE 2: AppleInsider's Kasper Jade reported on Tuesday that Apple, "disgusted with Rogers Wireless," has decided that that Apple's Canadian retail stores — there are six in all — will not be selling the iPhone 3G on July 11, as previously planned. Jade says that although most of the Canadian stores he contacted were not sure whether they would be selling the phone, "one representative ultimately confirmed that Rogers and its partner stores will be the only place to buy iPhone 3G come Friday." The Canadian Apple Stores we called Tuesday morning could not confirm AppleInsider's report, and later that day CNet's Tom Krazit reported that none of the Apple stores outside the U.S. will be selling iPhones this week.
UPDATE 3: In a last-minute concession, Rogers on Wednesday offered a special 6GB data plan for 30 Canadian dollars ($29.76) a month. It will be available to customers who activate by August 31 on a three-year contract and can be added to any voice plans currently available. (link) It's not clear how many of the 57,000 who signed the original rate-relief petition will be satisfied. Rogers is betting that most will; it is opening its stores early on Friday and limiting purchases to 2 iPhones per customer. But a new petition drive has already been started under the banner: Rogers its (sic) not enough.
30,000 Canadians petition for iPhone rate relief
It's taken more than a year for the iPhone to make its way across the world's longest undefended border, which may help explain why so many Canadians are upset this weekend.
On Friday, Rogers Communications (RCI) — Canada's largest mobile carrier and the only one with a contract to sell Apple's (AAPL) iPhone north of that border — announced the details of its voice and data plans. They struck some would-be customers as unreasonably high and unnecessarily restrictive, especially when compared with those in the U.S. and the U.K., and thousands of angry Canadians have made their feelings known in various homegrown websites, including eh Mac, GeekCulture, and blog.r4nt,.
But the largest and most pungent protest is a petition whose original name was unprintable, but which can now be found at ruinediphone.com. Its stated goal is to gather 10,000 names — accompanied by a letter to Steve Jobs — by July 11, the date when the iPhone 3G goes on sale in Canada. By Sunday morning it had already gathered more than 10,000; by Monday it had topped 15,000.
The letter to Jobs begins:
Dear Steve,
My name is James and I would like to thank you for creating the wonderful iPhone device. We really think that you will change the world with it, just as you changed the world with the iPod. We were so happy to learn that on July 11th, we would finally be able to buy the iPhone and legally use it in Canada.
To our great disappointment, Rogers Communications Inc. has announced VERY unfair rates in comparison to AT&T in the United States and to other authorized wireless service providers around the world…. (link)
What's wrong with Rogers' rate plan?
For one thing, it comes with a mandatory 3-year contract. In the U.K., O2 offers an-18 month contract and throws in the iPhone for free. And although both AT&T (T) and Rogers offer calling, data and text messaging for $75 a month, Rogers at that price gives Canadians a third less calling time, half as many text messages, and puts a 750 MB cap on 3G data usage — with steep fees for users who go over their monthly limit.
It's this last element that has struck Canadian Apple fans as most unreasonable. One of the features that makes the iPhone so popular is how effortless it makes websurfing and multimedia downloads — activities that can quickly rack up the megabytes. That's why heavy users usually pay extra for unlimited data usage.
Rogers claims that its top data plan — 2 GB per month for $115 — is enough to download 16,000 webpages. But users point out that a single Facebook page can account for 1.2 MB, which reduces browsing from 16,000 pages per month to 1,600.
"It's like they're deliberately driving customers away," wrote wolfscribe on CBCnews. "I'll keep my money, ride out the contract and look for a new provider."
Rogers does offer unlimited data through Wi-Fi sites, and it defends its pricing on 3G data as consumer friendly. "Unlimited plans could end up costing customers more for what they don't use," argues a spokeswoman. "Our iPhone plans more than accommodate the vast majority of customers." (link)
Petitioners are asking Steve Jobs to pressure Rogers to offer a better plan — or cut a deal with another provider who will.
[UPDATE: As of Monday 9PM, ruinediphone.com is no longer responding, a development likely to spawn all sorts of Rogers Communications conspiracy theories. The site had reported collected more than 20,000 signatures before it went down.]
[UPDATE 2: The site is back up (DNR problems, we hear, not corporate censorship) and had gathered more than 30,000 signatures as of Thursday noon. Meanwhile, Ernst & Young has seen fit to name Ted Rogers, CEO of Rogers Communications, its 2008 "Entrepreneur of the Year." The award will be presented at a banquet in October. You can write your own punchline in the comment stream.]
Below the fold: Rogers' iPhone rates.


