Apple iPhone: Has 3 won it for Australia?

AT&T won the right to offer the hype-worn iPhone in the US and it looks like Spanish-owned operator O2 will get the same chance in the UK -- now the bets are on for which of the operators will bring the Apple handset to Aussie customers.

While there is no confirmed date for when the iPhone will launch in Australia -- save for a vague "early next year" -- as expected, neither Apple or the operators themselves are giving anything away. However, with potentially nine months or so til launch date, negotiations are likely to have started between the Mac maker and its suitors, if not concluded.

So who is in the frame? Telstra is potentially the most obvious frontrunner, having the user base, clout and crucially the technology to be the apple of Apple's eye.

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However, Telstra has previously been dismissive of the device, with the telco's CTO Greg Winn recently telling AAP: "There's an old saying -- stick to your knitting -- and Apple is not a mobile phone manufacturer, that's not their knitting. You can pretty much be assured that Nokia, Motorola, Samsung, Sony Ericsson and ZTE and others will be coming out with devices that have similar functionality."

Robin Simpson, research director, mobile and wireless at Gartner, however, suggests that such a stance may be revised in light of the iPhone's opening weekend. "Greg Winn might have said that before he saw the device and saw how it worked. Most mobile operators would consider 500,000 units a success, which would mean the iPhone is a success in its first weekend."

Another potential sticking point for a Telstra-Apple pairing is the Mac maker's desire to have more control over the retail process than most handset manufacturers do. The two traditionally hard-headed companies might find themselves clashing, with Telstra unwilling to bend to Apple's requests -- it's thought negotiations with Vodafone in the UK broke down for the same reason.

One of the reasons Telstra is thought to be a frontrunner is the question of standards. In its current iteration, the iPhone has no 3G connectivity and is instead compatible with EDGE networks -- and Telstra is currently the only Australian mobile operator to use the technology in question.

The EDGE question is likely to have a short shelf life though -- it's unlikely Apple will launch an iPhone in Europe without 3G. Unlike the US, in Europe's most lucrative and populous markets, 3G is the norm and operators have spent billions on their networks that they're now keen to recoup.

For another hint that a 3G iPhone is on the way, take a look at the UK, soon to get its own iPhone launch. There, only operator Orange has an EDGE network running and so far, its name has not been linked with the iPhone -- unlike EDGE-less rival Vodafone, initially in the frame, and current favourite O2. The former has an EDGE sharing deal with Orange, the latter, perhaps tellingly, does not.

With a 3G iPhone on the market, the choice of operators opens up -- and becomes infinitely more interesting. Gartner's Simpson said despite being a relatively little fish, Hutchison owned 3 could yet prove attractive to Apple by being more open to negotiation than Telstra: "3 is number four in the market but as a smaller player, it means you might be willing to bend a little more," he told ZDNet Australia.

Equally, having seen 500,000 people switch to AT&T to get their hands on an iPhone, the promise of a large block of new subscribers could be a tempting prize for smaller 3.

Jerson Yau, analyst at IDC, said: "Apple and 3 are very much in line. It would give [3] a tremendous boost."

Of the four main operators who vied to carry the iPhone in the UK, the likely winner O2 is the one making the greatest progress in encouraging customers to spend on non-SMS data. Could this be an indication of which way the coin will fall in Oz?

Vodafone has already spent a lot of time and effort on its Vodafone Live! portal, making money by selling both content and data: devices that promote themselves on open Web browsing cut out the content revenues and just leave the data earnings. The iPhone would turn Vodafone into a bit pipe rather than a content vendor, something that may not please the operator.

One operator who has embraced the bit pipe model is 3, with the X-Series -- a recent initiative launched by the operator which offers a slew of Web services, such as Skype and Windows Live Messenger, over 3 phones for a fixed data fee.

The X-Series has been a significant sea-change for 3. For several years, the operator offered a walled-garden approach, only allowing users access to certain optimised sites.

For IDC's Yau, 3's revamped business model could fit well with Apple's view of the mobile market. "It would be a massive win for an operator. The X-Series and Apple could be a very potent combination -- the other carriers would have to respond strongly," he said.