The iPhone is finally coming to China, but likely missing a key feature – the Internet. China Mobile wants Apple to strip both 3G and Wi-Fi from the device; a puzzling decision indeed.

Hong Kong’s South China Morning Post cited a report from the Daiwa Institute of Research, saying that both 3G and Wi-Fi would be removed from the iPhone for the Chinese market. Daiwa analyst said that the Taiwan Hon Hai Precision Industry, who assemble iPhones for Apple, is on standby for the official word to ship the phone minus W-CDMA and Wi-Fi.

Speculation is that because China Mobile’s upcoming 3G network will be running on TD-SCDMA, and not W-CDMA. Disabling the function would then discourage users from switching to rival China Telecom’s network.

"Apple shouldn’t customise a model of iPhone for the mainland market, given that it only provides a standardised product to operators around the world," Frederick Wong, a BNP Paribas analyst said to SCMP.

Will Apple acquiesce to China’s request? There’s no telling. After all, the China talks have been on and off, breaking down early in the year, only to resume in July. The dealbreaker, it was said, was Apple’s insistence on revenue sharing but after it backed down on the demand, the iPhone’s launch seemed imminent.

The Chinese market, according to In-Stat, is a potentially lucrative one for Apple. Not just for the huge market (which has yet to reach saturation), but for the trend towards entertainment-oriented mobile content. While the smartphone market in the U.S is more geared towards business users, Chinese mobile users are attracted to multimedia and mobile Internet applications.

Though China Mobile might think this is the smarter way of blocking out the competition, unlocked iPhones are already available on the mainland. What’s to stop enterprising hackers from tweaking the crippled iPhones? And if Chinese users decide they would rather buy grey market, non-crippled versions to use, then both China Mobile and Apple would lose out on potential revenue.

Related:

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Gray market iPhones appearing in Asia

iPod Touch bests iPhone’s internal design, costs $155 to make

Sell Your iPhone 1.0 while you still can, still hot items on eBay and Craigslist

Google Talk now on your iPhone

Entry was posted on Thursday, September 25th, 2008 at 9:52 am under International, iPhone.  Print This Post

Read more entries by Erna Mahyuni.
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