Tuesday, October 19, 2010

Indian Firms in Talks to Get CDMA iPhone

The Wall Street Journal

MUMBAI—Two Indian wireless operators are in talks with Apple Inc. to offer a version of the iPhone based on code division multiple access, or CDMA, technology, people familiar with the matter said.

Apple is in talks with Reliance Communications Ltd. and Tata Teleservices Ltd., whose networks run on CDMA technology. The discussions come amid news that Apple is making a CDMA version of its iPhone that Verizon Wireless will sell early next year in the U.S.

"Tata has been in talks with them [Apple] for four to five months now," one of the people familiar with the negotiations said. It is unclear though when any launch may take place, these people said.
Anand Baskaran, an Apple spokesman for India, declined to comment.

Separately, Apple is adding two more iPhone carriers in Germany. Telefonica SA's O2 and Vodafone Group PLC both said Tuesday they will sell the iPhone 4 within the next weeks in Europe's largest economy, ending the exclusivity of Deutsche Telekom AG ahead of the Christmas holiday season.

In India, Apple's iPhone is currently available through operators Bharti AirTel Ltd. and Vodafone Essar Ltd., a unit of Vodafone, which offer services under the global system for mobile communications, or GSM, technology. Vodafone is also joint owner of Verizon Wireless with Verizon Communications Inc.

Launching a CDMA phone will give Apple access to more customers in the world's fastest-growing telecom market, which is adding around 18 million users a month. India currently has about 670 million wireless users, of which roughly 20% use CDMA phones. GSM phones make up most of the market.

For the two local operators, offering a CDMA iPhone would help them battle shrinking revenues and margins due to intense competition. Currently, the cheapest iPhone in India costs more than $670 and is considered expensive for a country where 42% of the population earns less than $1.25 a day.

Still, analysts say Apple may find it tough to generate significant revenue from a CDMA-based iPhone in India given that it is not as widely used as a GSM phone, and because there is stiff competition for smartphones from companies including Nokia Corp., Motorola Inc., HTC Corp., Samsung Electronics Co. and Research In Motion Ltd.

Moreover, Google Inc. is pushing to its presence in India through little-known Indian handset makers that are poised to launch low-cost devices that include its Android operating system in coming months.

"While the possibility of a CDMA iPhone through Reliance Communications or Tata would help Apple, it is unlikely to generate significant volumes in India," said Daryl Chiam, a senior analyst at research firm Canalys.

Apple accounted for less than 1% of India's smartphone market share in the first half of 2010, said Mr. Chiam, adding that in contrast, Nokia shipped 1.8 million smartphones in India and accounted for 71% of the market during that time.