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.

India Unveils Prototype $35 Tablet Computer

Associated Press

 

MUMBAI, India (AP) - It looks like an iPad, only it's 1/14th the cost: India has unveiled the prototype of a $35 basic touchscreen tablet aimed at students, which it hopes to bring into production by 2011.

If the government can find a manufacturer, the Linux operating system-based computer would be the latest in a string of "world's cheapest" innovations to hit the market out of India, which is home to the 100,000 rupee ($2,127) compact Nano car, the 749 rupees ($16) water purifier and the $2,000 open-heart surgery.

The tablet can be used for functions like word processing, web browsing and video-conferencing. It has a solar power option too - important for India's energy-starved hinterlands - though that add-on costs extra.

"This is our answer to MIT's $100 computer," human resource development minister Kapil Sibal told the Economic Times when he unveiled the device Thursday.

In 2005, Nicholas Negroponte - co-founder of the Massachusetts Institute of Technology's Media Lab - unveiled a prototype of a $100 laptop for children in the developing world. India rejected that as too expensive and embarked on a multiyear effort to develop a cheaper option of its own.

Negroponte's laptop ended up costing about $200, but in May his nonprofit association, One Laptop Per Child, said it plans to launch a basic tablet computer for $99.

Sibal turned to students and professors at India's elite technical universities to develop the $35 tablet after receiving a "lukewarm" response from private sector players. He hopes to get the cost down to $10 eventually.

Mamta Varma, a ministry spokeswoman, said falling hardware costs and intelligent design make the price tag plausible. The tablet doesn't have a hard disk, but instead uses a memory card, much like a mobile phone. The tablet design cuts hardware costs, and the use of open-source software also adds to savings, she said.

Varma said several global manufacturers, including at least one from Taiwan, have shown interest in making the low-cost device, but no manufacturing or distribution deals have been finalized. She declined to name any of the companies.

India plans to subsidize the cost of the tablet for its students, bringing the purchase price down to around $20.

"Depending on the quality of material they are using, certainly it's plausible," said Sarah Rotman Epps, an analyst at Forrester Research. "The question is, is it good enough for students?"

Profitability is also a question for the $35 machine.

Epps said government subsidies or dual marketing - where higher-priced sales in the developed world are used to subside low-cost sales in markets like India - could convince a manufacturer to come on board.

This and similar efforts - like the Kakai Kno and the Entourage Edge tablets - show that there is global demand for an affordable device to trim high textbook costs, she said.

If it works, Epps predicts the device could send a shiver of cost-consciousness through the industry.

"It puts pressure on all device manufacturers to keep costs down and innovate," she said.

The project is part of an ambitious education technology initiative by the Indian government, which also aims to bring broadband connectivity to India's 25,000 colleges and 504 universities and make study materials available online.

So far nearly 8,500 colleges have been connected and nearly 500 web and video-based courses have been uploaded on YouTube and other portals, the Ministry said.