South African consumers fed up with the delay in Apple’s iPhone reaching our shores are paying excessive prices to get their hands on “grey imports”, which are cracked to work on local mobile networks such as MTN, Cell C and Vodacom.
But they might not have to for much longer. Vodacom’s spokesperson, Dot Field, said the mobile operator will make an announcement on the iPhone next week. It seems that the mobile operator might have made a deal with Apple to bring the iPhone into the country.
The Mail & Guardian found iPhones being sold for between R8 000 and R10 000 in back door deals through retailers that import them on the side.
The M&G also interviewed consumers who had imported the iPhones themselves and then used easily available online software to crack their new phones so they could operate on local mobile service providers’ networks.
One consumer said it is easy to get hold of the software to crack the iPhone but that not many consumers know about it, so a clandestine industry has developed where people charge consumers thousands of rands to crack their iPhone for them.
The same consumer said he managed to get the iPhone into South Africa for the equivalent of R4 944, including Fedex costs and customs duty in South Africa.
But the Core Group, which has the licence to distribute Apple hardware in South Africa, said consumers who buy cracked iPhones or cracked the iPhone themselves take huge risks because their warranty will be null and void and there will be no backup support in the country.
“There are a lot of people out there who claim to be selling iPhones officially and are not educating customers about the huge risks,” said Rutger Jan van Spaandonk, a director of the Core Group.
Van Spaandonk said that customers might crack the phone, but when they plug their iPhone into their computer and upgrade software, such as iTunes, the upgrade could cause the phone to be “bricked up” again, which renders it useless.
“It pains me to speak to customers and say I wish I could help you but I don’t have the authority or tools to do so,” said Van Spaandonk.
The iPhone is not available officially in South Africa because Apple has not signed an agreement with a local mobile network.
The sticking point appears to be Apple’s distribution model, which involves signing exclusive deals with a single network operator that then agrees to give Apple a percentage of call revenues.
In the United States Apple distributes the phone through AT&T, which gives Apple 10% of the average revenue per user (ARPU).
It is unclear what the total value is for this 10% of ARPU, but some US media have speculated it could be about $18 per user per month.
With two million iPhone subscribers in the US, this is equivalent to $36-million in revenue a month.
In Europe the percentage of ARPU revenue required by Apple is reported to be even higher, but it is not clear what the exact percentage is.
It appears that local network operators have refused to negotiate such a deal with Apple, which has left South African consumers who want the iPhone high and dry.
“The iPhone is only sold through authorised operators and has a fairly high revenue share model that is paid by the operator directly to Apple,” said MTN’s Brian Seligmann. “MTN has been in discussions with Apple and will potentially sell the iPhone in the future if a mutually beneficial relationship can be negotiated.”
Field said Vodacom always strives to bring the latest products and services to other markets, but at this stage it could not comment further.
What consumers say about the iPhone
“The greatest feature on the iPhone is the touch screen. The quality is incredible,” says Barry Stark.
“The iPhone has a proximity sensor, so when you put the phone to your ear it deactivates the touch screen so you don’t push buttons.”
“The instant-touch screen makes it incredibly quick and easy to use. Screen scrolling, zooming and flicking through menus is super easy and fast rather than having to fuss with buttons,” says Megan MacGarry.
“You always have music on the go, with headphones that have a clicker to allow you to move through songs.
“When you receive a phone call the music pauses and the headphones function as walk-and-talk microphone.
“Once the phone call is over you can return to your music without ever having to remove the phone from your pocket. It also has a speaker so you can play music or chat on loudspeaker. This has been a super awesome feature during load-shedding as it means we always have music, especially since the battery lasts well,” says MacGarry.
“They have opened the iPhone up to third-party developers, so there are literally thousands of applications to download,” says Andrew Wessels.
“The internet is incredible. It’s like full-blown proper internet, not that fiddly internet that most phones have,” says Wessels.