Knockoff models of popular cellphones such as the iPhone are selling well in China, suggesting Apple may have a more difficult time penetrating the market than expected. The New York Times reports that knockoff, known as shanzhai, phones account for more than 20 percent of sales in China, while the government has done little to stop the proliferation of the fakes. Part of the problem, the report suggests, is the lower price of the knockoffs, made possible by technological advancements that make the fakes very cheap to produce, and by the manufacturers’ evasion of taxes, regulatory fees, and safety checks. “We’re being severely hurt by shanzhai phones,” says Chen Zhao, a sales director at Konka, a Chinese cellphone maker. “Legal cellphone makers should pay 17 percent of their revenue as value-added tax, but shanzhai makers, of course, won’t pay it.” China’s Ministry of Industry and Information Technology recently warned consumers about the hazards of shanzhai phones, saying “their radiation usually exceeds the limit.”
Fake iPhones—like the Meizu M8—are particularly popular, partially due to the fact that the phone isn’t officially available in China, except in Hong Kong, pushing the street price of imports out of reach for many. “I saw iPhone pictures on the Web; it’s so cool. But it costs over $500 — too expensive,” said Yang Guibin, 30, an office worker from Chongqing. “So I decided to buy a shanzhai iPhone. I bought it in a digital market here; it looked exactly like the iPhone.” Interestingly, even the manufacturers admit their business is less than reputable. “We are a kind of illegal producer,” said Zhang Feiyang, whose company, Yuanyang, makes an iPhone clone. “In Shenzhen there are many small mills, hidden. Basically, we can make any type of cellphone.” Apple has been linked to both China Mobile and China Unicom as potential partners for an iPhone launch in China, however, no official announcement has been made by either company.
Apple has released the fourth beta version of iPhone OS 3.0 to developers, along with an updated version of the iPhone software development kit (SDK), and a pre-release version of iTunes 8.2, which is required to activate iPhone OS 3.0. It is currently unclear what changes might have been made to the SDK, OS, or iTunes with this release; however, legal language referring to Blu-Ray data from Gracenote has been spotted in iTunes, suggesting Apple is working on Blu-ray playback/support for the media jukebox. The updated SDK weighs in at 2.13GB, and is listed as build 9M2734, while the iPhone OS 3.0 beta 4 is listed as build 7A300g.
Developers can download iPhone OS 3.0 Beta 4, iTunes 8.2 pre-release, and the accompanying updated SDK from Apple’s iPhone Dev Center.
Apple is working on two new iPhone-like devices which may be offered by Verizon Wireless, according to a new report. Citing two people “familiar with the matter,” BusinessWeek reports that one of the devices is a smaller, less expensive calling device described by one of the sources as an “iPhone lite,” while the other device is a touchscreen media pad that would allow users to listen to music, watch high definition video, view photos, and make calls via a Wi-Fi connection. According to the report, one of the devices may be introduced as early as this summer. Verizon Wireless CEO Lowell McAdam recently confirmed talks with Apple, telling BusinessWeek that “In the last six months, I have talked to Steve Jobs;” however, it is unclear whether Apple’s current exclusivity contract with AT&T would block the introduction of a new iPhone model on a competing carrier, and whether the information was leaked to provide leverage for ongoing future exclusivity negotiations between Apple and AT&T. USA Today recently reported that Verizon and Apple were discussing the development of a CDMA-based iPhone for introduction next year.
Apple’s iPhone is spurring demand for location-based services, according to Ted Morgan, founder and CEO of Skyhook Wireless. “Thanks to the popularity of iPhone, we are seeing more and more apps using geo-data,” Morgan said in an interview with GigaOM. “The iPhone has unleashed location-based creativity.” Skyhook provides the technology for the Wi-Fi location positioning feature of the iPhone OS, and also offers its services to other mobile device manufacturers and mobile app developers. According to GigaOM, the number of location-aware mobile apps has grown in the past year from a few dozen to 2,000, with five times as many location-aware apps expected by next year.
Verizon and Apple are formally discussing the possibility of introducing a Verizon-compatible iPhone next year, according to a new report. Citing “people familiar with the situation,” USA Today reports that the two companies entered into “high-level” discussions months ago while Steve Jobs was still overseeing day-to-day business at Apple. While the article states that the phone would be built to run on Verizon’s current CDMA wireless network, Verizon plans to begin commercial use of its next-generation Long Term Evolution (LTE) 4G network in 2010, suggesting that the negotiations may instead be targeting this more advanced network platform. AT&T is expected to launch a commercial LTE network in mid-2011, leaving Verizon a brief window of 4G exclusivity in which it could take advantage of a 4G iPhone. In addition, Verizon CEO Ivan Seidenberg recently commented that Apple would be more likely to offer the iPhone to Verizon once it had transitioned to a LTE network. USA Today claims that AT&T has exclusive U.S. iPhone distribution rights into 2010—though it is said to be seeking an extension through 2011—and would likely continue to offer the iPhone even if Verizon were to offer it as well.
Announcing its first quarter fiscal results, U.S. iPhone carrier AT&T has revealed that it activated more than 1.6 million iPhone 3G units during the period. Of the 1.6 million iPhone 3G activations, over 40 percent were customers who were new to AT&T; the Q1 activation total compares with 1.9 million iPhone 3Gs activated by AT&T during the previous holiday shopping quarter—impressive given the typical post-holiday sales downtick—and brings the total number of U.S. iPhone 3G activations to over 5.9 million. Overall AT&T saw a net gain of 1.2 million total wireless subscribers in Q1, to reach 78.2 million total, and also saw the fifth consecutive quarter with a year-over-year increase in average revenue per subscriber, up 2.1 percent versus the year-earlier quarter to $59.21.
More evidence pointing to the possibility of a voice control feature in iPhone OS 3.0 has been found in the latest beta version of the software. Citing anonymous sources, Ars Technica reports that a number of references to classes and methods related to the code name “Jibbler” have been discovered in the software, which appear to suggest support for both voice synthesis and voice recognition. References to Jibbler, which appears to be an enhancement to the iPhone’s home page SpringBoard application, include VSSpeechSynthesizer, VSRecognitionSession, SBVoiceControlDisableHandlerActions, SBSensitiveJibblerEnabled, and SBVoiceControlSoundCompletion. Ars adds that SB refers to SpringBoard, and VS likely refers to voice services; the report also suggests that the feature may be activated by the in-line button on the headset, and could be used for voice-controlled dialing, along with iPod nano 4G and iPod shuffle 3G-style audio feedback. Prior screenshots of the upcoming OS update showed a Voice Control menu option in the Settings app.
AT&T has cut its price on refurbished 16GB iPhone 3G units, dropping the price by $50 to $150, or a savings of $150 off a new unit. In February, AT&T lowered its pricing on refurbished iPhone 3Gs to $99 (from $149) for 8GB models and $199 (from $249) for 16GB units; the pricing on 8GB models remains unchanged from this prior drop. As with new iPhone 3Gs, the refurbished units require a two-year contract, and AT&T notes that all refurbished iPhones carry a warranty of 90 days or more and may have “minor scratches.” [via Dealmac]
Apple’s iPhone and iPod touch are becoming the electronic handheld devices of choice for U.S. military overseas, according to a new report. Newsweek reports that the iPod touch, and to a lesser extent the iPhone, are gaining popularity thanks to their relatively low cost compared to custom-designed mil-spec devices, their ruggedness when sheathed in protective cases, and their versatility. Since both devices can run a myriad of different apps, many government agencies are funding development of new software. The Pentagon is funding the technology behind an app that would allow a soldier to take a picture of a street sign and quickly receive intelligence on the local area, while the U.S. Marine Corps is funding an application that would allow soldiers to upload photos of detained suspects to a centralized, biometric database, which could then be used to match faces and make it easier to track suspects once they’ve been released. Other software includes an app that would display aerial video from drones, a bomb-disposal robot remote control app, the ballistics calculator BulletFlight, currently in use by snipers in Iraq and Afghanistan, and Vcommunicator, a spoken and written translator. An iPod “may be all that [soldiers] need,” says Lt. Col. Jim Ross, director of the Army’s intelligence, electronic warfare and sensors operations in Fort Monmouth, New Jersey. The Pentagon has not disclosed how many Apple devices are currently deployed.
Speaking in an interview with Total Telecom, Verizon CEO Ivan Seidenberg made several comments regarding the iPhone in relation to his company’s network. According to the article, Seidenberg said Apple never really considered making a CDMA version of the iPhone, because it didn’t have as wide a distribution opportunity, adding that he thought Apple would be more likely to bring the iPhone to Verizon in the U.S. once both it and AT&T had transitioned to Long Term Evolution (LTE), also known as 4G, networks. Seidenberg also used the interview as an opportunity to lash out at rival Sprint Nextel, which plans to offer the iPhone rival Palm Pre, and has been offering $50 and $100 unlimited service plans under its Boost mobile and Sprint brands. “I don’t know what Sprint thinks it is,” Seidenberg said, claiming that it would eventually “self-destruct” as the need for capital investment in the network increases.
A new Apple patent application suggests the company is working on ways to make the iPhone OS interface more usable during activities. Titled “Variable Device Graphical User Interface,” the patent describes a method of sensing when the device is in motion, such as during a workout or other physical activity, and adjusting the graphical interface accordingly. Interface adjustments could potentially include enlarging user interface elements, such as items in a contact list, or icons on the home screen. Interestingly, illustrations included with the patent also depict what appears to be a forward-facing camera module at the top near the ear speaker—labeled 180—with the iPhone’s ambient light sensor moved to the bottom of its face to make room for the camera. Nothing in the patent text directly references a forward-facing camera, only one that could be “located on the back surface of the mobile device.” A forward-facing camera would potentially allow future iPhone models to offer video chat functionality, possibly through an iPhone-specific version of Apple’s iChat AV software. As with all Apple patents, this filing does not necessarily represent any future product release from Apple, but offers evidence of the company’s research in this area. [via Mac Rumors]
U.S. carrier AT&T is seeking to extend its iPhone exclusivity deal with Apple through 2011, according to a new report. Citing people familiar with the matter, the Wall Street Journal reports that AT&T’s current iPhone deal expires next year, and that current AT&T CEO Randall Stephenson is now in discussions with Apple to extend it another year. The article goes on to reveal that Stephenson had his technology staff create a custom iPhone application so he can read his internal AT&T financial reports; a stark contrast to his predecessor Ed Whitacre who didn’t even keep a computer on his desk. Stephenson told the WSJ that with or without the iPhone, the company is planning to invest heavily in new infrastructure to handle new, more bandwidth-hungry services and devices. “This business cycle is going to cycle,” Mr. Stephenson said. “You got to make sure that you’re positioned when it cycles back out to be the leader in the industry, and to do that you have to be the leader in mobility, first and foremost.”
Apple has released the third beta version of iPhone OS 3.0 to developers, along with an updated version of the iPhone SDK. According to Apple’s release notes, a number of changes have been made to Xcode, Interface Builder, and Dashcode in the SDK; the notes also say that applications targeted for prior versions of the iPhone OS cannot be tested in this new version. The updated SDK weighs in at 2.13GB, and is listed as build 9M2728.
Developers can download iPhone OS 3.0 Beta 3, and the accompanying updated SDK, from Apple’s iPhone Dev Center.
Online retailer Buy.com has begun sales of “never-locked” iPhone 3G units, although it is unclear exactly where the units are from or whether they are protected by Apple’s standard one-year warranty. The units, which are listed as 16GB models but without any color specification, are priced at $800 each; a video accompanying the listing says the iPhones come from “overseas,” and may include instructions and other materials printed in Italian or some other non-English language. Confusingly, though both the video and the top portion of the listing indicate that the phones include the “Apple guarantee,” a separate block of text farther down the page indicates the phone “can only be returned to the distributor under” a “30 Day Limited Warranty.” Finally, although the page states that the phone can be used with T-Mobile in the U.S., T-Mobile’s 3G network operates on a different frequency than those supported by the iPhone 3G, meaning the device would be limited to standard EDGE connectivity when using T-Mobile’s network.
Apple has placed orders for four million units of new iPhone models, with delivery expected by the end of this quarter, according to a China Times report (Translated Link). The report goes on to state that Apple may introduce three distinct iPhone models, including a new 2.75G (EDGE) model, a new 3G model, and a third model created especially for the Chinese market. All three models are said to be similar in design to the current iPhone, and the report states that the introduction of a third, smaller model—often referred to as the iPhone nano—is unlikely. Prior reports have indicated that a future iPhone model would include an improved, 3.2 megapixel camera, 802.11n wireless network support, and video recording features; Apple is expected to reveal at least one new iPhone model at this year’s WWDC event, scheduled for June 8-12 in San Francisco. [via Mac Rumors]
A number of iPhone users are reporting intermittent problems with Wi-Fi after installing iPhone OS 2.2.1, which have since been linked to a battery issue by one intrepid user. According to an Apple Discussions thread, affected units randomly drop Wi-Fi signals, refusing to reconnect to any network for a period of time. Originally, many of the users believed the problem to be heat-related, as some users reported success after putting their phone in the refrigerator or freezer—a process we would warn against, as it could result in water damage or a water damage indicator being triggered from condensation, thus voiding any remaining warranty.
Scottish user ScottieWil physically opened his iPhone, discovering that Wi-Fi immediately returned when the relevant chip was touched with a Nitrogen stick to quickly cool it down. Upon further inspection, however, he found that the issue appears to be directly linked to the percentage of battery charge—his Wi-Fi seemed to work consistently no matter what the temperature as long as the battery charge was less than 50%—and suggested that the battery is “very sensitive to temperature,” which would explain why the freezer trick worked for a short period. Despite ScottieWil’s efforts, there appears to be no immediate fix for the issue. One user wrote that an Apple representative made an appointment for him to get a replacement phone without 2.2.1 installed, suggesting Apple is aware of the problem, if currently unable to provide a solution. [via The Register]
Apple has launched a new Billion App Countdown promotion to celebrate the one-billionth app downloaded from the App Store, with a single combined prize of a $10,000 iTunes Gift Card, a 32GB iPod touch, a Time Capsule, and a 17-inch MacBook Pro. The prize will be awarded for the entry (either through an app download or through a non-purchase online entry) sent immediately following the download of the 999,999,999th app. The winners will be listed online within 10 days following the one-billionth download. Regardless of which method of entry is used to enter the Promotion, only 25 entries per person and/or iTunes account and/or email address, per day will be granted; an entrant must be 13 years of age or older at the time of entry, and must also be a legal resident of the United States, Australia, Austria, Belgium, Canada (excluding the Province of Quebec), Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, or the United Kingdom. Apple held a similar promotion during the time leading up to the one billionth song sold via the iTunes Store in 2006.
Editors’ Note: At the current estimated rate of App Store downloads, roughly 5 million per day, the countdown would last for roughly 15 days before someone wins. However, the pace of downloads will likely continue to accelerate as it has throughout the Store’s growth, meaning that a winner should be picked in less than two weeks’ time.
Fido, the Canadian cellular provider owned by Rogers Wireless, has begun selling “refreshed” iPhone 3G units to eligible customers. According to MoblieSyrup, the “refreshed” phones differ from normal refurbished units in that they are not rebuilt or reconditioned by Apple, instead being brought back to Fido during the 15-day return/exchange window, and carry only a six month warranty. The refreshed units can only be purchased by existing Fido customers, who must currently be on a price plan dated before November 4th, 2008 or on a retention/loyalty plan. 8GB refreshed units sell for $149 on a three-year plan, while 16GB models sell for $249.
Talks between Apple and China Unicom to bring the iPhone to China have come to a halt over demands by Apple, according to a new report. SinoCast reports that Apple was said to have asked Unicom to help pay for the costs of building special Apple storefronts across the country, after China Unicom agreed to a profit-sharing plan proposed by the iPhone maker. Executives at China Unicom would say that negotiations were ongoing, but refused to give any specific details. China Unicom is expected to launch its 3G network on May 17, and is said to want the deal with Apple finalized by April 15.
Google has launched significant upgrades to its Gmail and Calendar web applications for the iPhone, iPod touch, and Android-powered devices. According to the company’s Mobile blog, the team behind the apps has completely re-architected the code to offer more consistent performance, and refreshed the user interface to make it easier to perform batch actions, along with laying the groundwork for future improvements. Other improvements include easier to read labels that are more in-line with their desktop counterparts, a relocated search menu, and the ability to open recently read messages and to compose new emails over a “flaky, or non-existent, network connection.” The improved interface requires iPhone OS 2.2.1 or later, and can be accessed now by visiting gmail.com from an iPhone or iPod touch.