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Opinion: Delayed New Zealand iPhone 4S launch shows the perils of drawing Apple's ire


Although it missed out on getting the original iPhone, New Zealand was the first country on Earth to sell the iPhone 3G. Unfortunately that wasn't the only way NZ distinguished itself during the iPhone 3G launch; thanks to local telco Vodafone NZ, the country also featured some of the highest handset prices and most expensive plans anywhere in the world. New Zealand lost its "first kids on the block with the iPhone" crown in 2009, as the iPhone 3GS came out in NZ just under a month after its launch in the United States. Although a year had passed, nothing had changed on the pricing front; Vodafone's handset subsidies remained pitifully lacking compared to other countries, and plan prices remained staggeringly high compared to what Kiwis were getting for their money.

In 2010, the iPhone 4 once again launched in New Zealand a little over a month after its US debut, but the NZ launch was an unmitigated disaster. Even on the day of the launch, conflicting reports from Vodafone NZ made it unclear whether the iPhone would launch in New Zealand at all. No official numbers were ever released on the number of iPhone 4 units available on launch day, but I know my local retailer received perhaps a dozen units before it sold out -- that's 12 iPhone 4 handsets in a city of over 80,000 people.

Nothing has ever been conclusively proven, but the most popular (and most likely to be true) theory is that last-minute pricing disputes between Vodafone and Apple resulted in Apple threatening to cancel the New Zealand launch if Vodafone didn't agree to offer customers lower handset prices. Vodafone reportedly capitulated at first, and handset subsidies for the iPhone 4 were initially much more generous (a relative term) compared to earlier iPhone launches. Vodafone NZ turned around and raised iPhone 4 handset prices anyway several months later.

Apple has to have taken notice of these shenanigans, and the proof is in the now greatly delayed New Zealand launch of the iPhone 4S. While our neighbors across the Tasman will see the iPhone 4S reach Australian stores on October 14, with 22 more countries following two weeks later, New Zealand won't see the iPhone 4S until December at the earliest. For those keeping score, this means that in only three years New Zealand has gone from being first in the world to see a new iPhone to being lumped in with the "70 more countries" category, also known as Apple's "Meh, whenever we get around to it," tier for iPhone launches. Even when the iPhone 4S does finally make it here, there's every reason to suspect the NZ launch will be just as big of a bungled debacle as it was last year.

It's my suspicion that NZ's newfound low-priority status for the iPhone 4S launch comes as a direct result of Vodafone NZ's inflated handset prices -- or looking at it the other way, its terrible handset subsidies -- and the company's inflexibility in negotiations with Apple. Representatives from Vodafone NZ consistently take a "blame Apple" approach when called to task for things like high handset prices and fumbled launches, but their sister company handles launches with aplomb in Australia and manages to offer handsets at a fair price for the market.

To be fair, Apple is not entirely blameless here either. The prices Apple charges for its gear in New Zealand approach extortionate levels when compared to other countries' pricing, even after accounting for taxes and import duties. Apple still offers unlocked iPhone 4 units at a starting price of NZ$899, roughly comparable to what I expect the price for an unlocked iPhone 4S to be in the United States. Apple's continued refusal to establish any official retail presence in a nation of four million potential customers, while simultaneously opening stores in sparsely-populated markets like Alaska, is also profoundly baffling. However, I believe most of the blame for the delayed iPhone 4S launch falls to Vodafone NZ's attitude toward both Apple and its own customers; in the end, it's those customers who are paying the price, in more ways than one.

Given its position as the number one smartphone vendor in the world, Apple can afford to play hardball with virtually any wireless carrier. If my appraisal of the situation between Apple and Vodafone NZ is even close to being accurate, then it should serve as a cautionary example for other carriers. The carriers need Apple far more than Apple needs them -- Sprint dropping 20 billion dollars on an iPhone deal is proof enough of how badly carriers need Apple, but Apple kicking Vodafone NZ to the bottom of the iPhone 4S availability ladder is just as much proof of how little Apple needs the carriers. Wireless providers play hard to get with Apple at their own peril... but, sadly, also at the peril of their customers.

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