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iPhone comes to China without WiFi

by Admin on October 30, 2009

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Apple’s iPhone is making its long-awaited formal debut in the world’s most populous mobile phone market, without a key feature and at higher prices than widely available black market models.

Apple’s local service provider, China Unicom Ltd., hopes the iPhone will give it an edge against giant rival China Mobile Ltd., the world’s biggest phone company by subscribers.

Unicom was to start selling iPhones equipped for third-generation service Friday night at 2,000 stores in areas as farflung as Tibet. Chinese news reports say Unicom hopes to sell 5 million in three years, but the company declined to confirm that.

Unicom’s first iPhones lack WiFi, a possible handicap with sophisticated, demanding Chinese buyers. The technology, a key part of the iPhone’s appeal, allows the phones in other markets to use wireless networks in cafes and offices to download e-mail and the latest applications for free.

“There’s going to be a perception that the phone they have is dumbed down from the one that somebody has in California,” said Duncan Clark, chairman of BDA China Ltd., a Beijing-based technology research firm. “We’ve seen before that Chinese consumers don’t like to be treated like second-class citizens.”

Apple Inc. and Unicom also could face competition from an unusual source: unlocked iPhones brought in from abroad that have WiFi.

There are already an estimated 1.5 million to 2 million such phones in China using China Mobile 3G service that allows Internet access and other features.

Unicom’s prices range from 4,999 yuan ($730) to 6,999 yuan ($1,025) for the high-end, 32-gigabyte iPhone 3GS. That is 20 percent above the 5,700 yuan ($835) charged by merchants at Chinese street markets for a 3GS with WiFi.

The iPhone’s awkward, delayed entry into China reflects the regulatory and technical hurdles of a fast-changing market where other global technology companies have struggled to establish themselves.

Unicom’s iPhones lack WiFi because it was temporarily banned by Beijing, which was promoting a rival Chinese system, according to BDA. The ban was relaxed in May after manufacturing had begun.

A Unicom spokesman, Yi Difei, said the company hopes to have WiFi in the next batch of phones.

“We are talking with Apple and expect the problem to be solved by the end of this year,” Yi said.

The iPhone debuted in the United States in June 2007 but its formal arrival in China was delayed as Apple carried on talks with service providers that Chinese media said snagged on disagreements about how to divide revenues.

China has more than 650 million mobile phone accounts, despite an average annual income of $3,000 per person. Consumers trade in phones as often as several times a year to get the latest models and features.

China Unicom has 143 million mobile accounts, which would be an impressive figure in any other market but lags far behind China’s Mobile’s 508 million accounts.

Global technology companies that dominate other markets have struggled to get a foothold in China. Search engine Google Inc. has less than 30 percent of the market, versus more than 60 percent for local rival Baidu Inc. Yahoo Inc. turned over its China operation to a local partner after failing to expand its market share.

China’s state-owned phone companies were restructured by the communist government into three groups last year in hopes of reviving competition after the explosive popularity of mobile service turned China Mobile into a behemoth.

Unicom, China Mobile and the third company, China Telecom Ltd., all emerged with mobile and fixed-line services.

China Mobile has announced its own smart phone, dubbed the OPhone, and says seven models will be available by next year.

Chinese news reports in August said Unicom’s deal with Apple called for buying 5 million handsets for 10 billion yuan ($1.5 billion). Chairman Chang Xiaobin denied that but refused to give financial details.

The lack of WiFi means Unicom iPhone customers will have to pay to connect to the phone network for every function. BDA’s Clark said that could alienate users if it leads to high monthly bills.

“This could be a real fiasco,” he said.


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China Denies Cyberattacks on U.S. Power Grid

by Admin on April 9, 2009

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Malware attacks from China and Russia designed to shut down the U.S. electrical grid in a time of war did not occur, China said Thursday.

“The incident of attacks on the U.S. electrical grid from China and Russia simply does not exist,” Chinese foreign ministry spokeswoman Jiang Yu told reporters, according to a transcript of the briefing.

“We hope the concerned media will cautiously handle groundless statements and especially critiques against China.”

Widespread intrusions by cyberspies in countries including China and Russia have infected the U.S. power grid with software that could be used to halt its operation, a Wall Street Journal report said this week, citing unnamed U.S. national security officials.

The newest allegations of Chinese cyberespionage follow long-standing concern that a coordinated attack on the U.S. power grid could cripple its operation.

China produces the majority of the world’s malware but part of it could come from attackers in other countries, who often hide behind Chinese IP (Internet Protocol) addresses.


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Google launches music downloads in China

by Admin on March 30, 2009

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Google Inc on Monday launched free downloads of licensed songs in China, while sharing advertising revenue with major music labels in a market rife with online piracy.

Lee Kai-Fu, president of Google in greater China, said one reason Google lagged in the mainland search market was because it did not offer music downloads, the missing piece to its strategy in a market where it trails leader Baidu.com Inc.

“We are offering free, high quality and legal downloads,” Lee told reporters. “We were missing one piece … we didn’t have music.”

The service offers downloads of some 350,000 songs — from Chinese and foreign artists — a number that will rise to 1.1 million in the coming months, said Gary Chen, chief executive of Google’s partner www.Top100.cn, a Chinese music website co-founded by basketball star Yao Ming.

Music from artists signed by Sony Music, Warner Music, EMI and Universal Music will be available on the service, which Google has no current plans to expand beyond China, said Lee.

“This is the first serious attempt to start (monetizing) the online market in China. I can’t overestimate how important this is,” said Lachie Rutherford, president of Warner Music Asia Pacific and Asia chairman of the International Federation of the Phonographic Industry (IFPI).

Users will be able to search by musical measurements such as the level of “beat” in a song and “instrumentality,” as well as by artist and song name.

IFPI said last year that more than 99 percent of all music files distributed in China are pirated, and the country’s total legitimate music market, at $76 million, accounts for less than 1 percent of global recorded music sales.

The new service will attract users away from illegal download sites because the music and service will be of a higher quality, said Warner’s Rutherford.

Downloads of unlicensed music and videos are rampant in China, the world’s biggest Internet market by number of users.

While Google dominates the global web search market, in China Baidu holds more than 60 percent of the market, more than double Google’s share.


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China shuts down 91 Porn Sites

by Admin on January 11, 2009

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A total of 91 sites have been shut down or blocked since Thursday as part of a month-long campaign that the government says is aimed at stamping out online pornography, the Xinhua news agency said.

Distributing pornography is illegal in China and authorities urged law-breakers to turn themselves into police, warning that tougher measures would come in the following days, the report said.

The report gave few details on which sites were shut down.

China’s Ministry of Public Security and six other government agencies launched the drive against sites that post or link to content that “harms public morality” and corrupts the nation’s youth, Xinhua said.

They have included Google, MSN and Baidu, the most popular Chinese search engine.

Companies that ignore government warnings to remove obscene content or links to such material have been threatened with closure.

Google, Baidu and other Internet portals have since issued apologies and moved against online porn.

Google said Wednesday it had deleted all links to vulgar material from its search indexes and would go all-out to prevent such material re-appearing.

“Google is willing to be a law-abiding citizen in China,” it said in a statement.

China has launched Internet crackdowns on pornography, con artists and political activists in the past but officials have warned the latest campaign would include tougher measures, without giving specifics.

China has the world’s largest online population at more that 250 million, according to official figures, and it is growing rapidly as computer use rises along with income levels.

China’s communist rulers generally exercise strict control over the Internet, blocking sites linked to many politically sensitive subjects.


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