Reading more iPhone tea leaves

The forthcoming launch of the LG Vu cell phone in Canada likely means a domestic introduction of Apple’s iPhone is still months away.

What does LG’s iPhone look alike have to do with the real meal deal?

If an iPhone launch in Canada was imminent as many have suggested to this here blogger, Rogers wouldn’t bother launching a lower-cost device that contains many of the same features.

The LG Vu, which has a touchscreen and a QWERTY keyboard not unlike the iPhone, will be sold to the same target market Apple has targeted with its beloved iPhone.

While the carrier often offers multiple products to the same customer segment, Rogers prefers to offer a best-in-class and a device with fatter profit margins such as the BlackBerry or the iPhone first.

Rogers, which will offer LG’s cell phone beginning in May, prefers to promote a best-in-class product like the iPhone first before launching a lower-cost product such as the Vu.

But Apple and Rogers I imagine are locked in a staredown. Apple probably wants to extract a hefty portion of a Rogers iPhone customer contract, say in the 20% to 30% range per year.

Apple has reportedly extracted such terms and conditions out of AT&T in the United States and o2 and T-Mobile in Europe. Apple has leverage with carriers unlike many of its cell phone competitors during negotiations with some carriers as the iPhone has captured the imagination of cell phone lovers worldwide.

This means many carriers are willing to play ball with Apple.

Not Rogers. Rogers, the leading wireless carrier in Canada by subscriber, is pulling away from the pack without the help of Apple. Why change? More to the point, it owns the GSM networks in Canada. The iPhone only runs on GSM networks of course.

This means Apple isn’t likely to have its device introduced in Canada anytime soon. Not unless Apple wants to introduce the iPhone on Rogers terms, an unlikely scenario. So that leaves Apple to focus on larger markets such as Western Europe and Asia-Pacific next.

LG, in contrast, gets favoured nation status with Rogers (Bell & Telus too) of course because it has taken the path of least resistance. In other words, it knows how to play the Canadian carrier relations game - take the terms and conditions offered in order to gain access to the network and distribution channel of The Big Three carriers.

Meantime, Apple and Rogers don’t seem anywhere close to an agreement though only those on the 10th floor of 333 Bloor St. E. in Toronto really know what’s going on with the iPhone.

April 23, 2008 | Filed Under News Items and Commentary