Saturday, April 26, 2008

Canadian debut may be set for Apple's iPhone



Business Reporter

The stars finally seem to be aligned for a Canadian launch of Apple's popular iPhone nearly a year after it was first unveiled to lineups of gadget-crazed consumers in the United States.

There have been no official confirmations, but industry sources say that Rogers Communications Inc., the only Canadian carrier with a compatible GSM network, was hoping to include the iPhone as part of a campaign that focuses on "touch screen" phones, to be rolled out between May and July.

That would put one of the world's most talked-about devices in the pockets of Canadians right around the time that Apple Inc. is expected to roll out an updated version of the iPhone that runs on so-called third generation, or "3G," networks.

It could also mean that the iPhone will be available in rival smartphone-maker Research In Motion Ltd.'s backyard before it is able to unveil its response: a 3G version of its popular BlackBerry email device for GSM carriers that is being dubbed "Meteor."

Shares of Waterloo-based RIM fell nearly 3 per cent or $3.52 to close at $122.25 on the Toronto Stock Exchange yesterday amid reports the anticipated June launch of a new BlackBerry has been pushed back to August.

"Reasons appear to be battery life, voice quality and other issues," said Mike Abramsky, an analyst at RBC Capital Markets, in a note to clients yesterday that cited sources "confirming" the rumours.

A RIM spokesperson declined to comment.

As for the iPhone's arrival in Canada, a source said Rogers Wireless executives believed they were "close" to inking an agreement earlier this year with Apple, which has used its clout to force significant changes to the standard industry relationship between wireless carriers and handset makers.

That includes the way the iPhone is marketed and sold, as well as a sizeable cut of subscribers' monthly bills.

However, it's still unclear whether a deal has actually been reached because neither side is talking.

"We believe it is a phenomenal device and we look forward to being able to offer it to our customers if and when the device becomes available in Canada," said Elizabeth Hamilton, a Rogers spokesperson.

An Apple spokesperson declined to comment.

While Rogers initially said it planned to offer the iPhone in Canada, the carrier was later forced to backtrack after it admitted it didn't actually have a deal with the Cupertino, Calif.-based maker of iPods and computers.

It has been widely speculated that the stumbling block was Rogers' wireless data plans, which typically cost more than those offered by carriers in Europe and the United States – a disparity that critics blame on a lack of Canadian wireless competition.

As well, most of Rogers' wireless data plans have usage caps, with users charged by the megabyte if they go over their allotment.

"We're not fans of unlimited plans," Rob Bruce, president of Rogers' wireless division, told analysts during a February conference call.

Apple, by contrast, emphasizes the consumer experience of its products and is said to be adamant that the iPhone be offered with unlimited data plans. That way, subscribers don't have to worry their mobile Web browsing habits will put a crater in their wallets.

In return, carriers offering the iPhone can expect to woo new customers and coax more of their customer base onto higher-priced wireless data plans. AT&T Inc., which has an exclusive deal with Apple in the U.S., this week reported a 57 per cent year-over-year increase in its wireless data revenues, which was attributed in part to the iPhone and its focus on mobile email and Web browsing.

Apple also demands a portion of subscribers' monthly bills. That's bound to be a sticking point with Rogers, which has little incentive to bow to all of Apple's demands since there's little risk the iPhone will wind up in a competitor's hands.

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