Amid the swirling EU ‘iPhone must be open’ debate, there’s an angle for everybody. Every proponent, from software developers who want side-loading to payment networks and banks who want open NFC, to EU regulators who want ‘open market’ (yeah right), and especially software ‘security’ companies who want to sell endless fixes for endless security breeches engineered by… you know who, expect a bonanza. iPhone finally released from the Apple walled garden is gonna make everybody rich.
Japanese developers and tech reporter veterans are thankfully more detached and acerbic than passionately hysterical westerners who are more in love with passionate hysteria than clear thinking. Not that they love Apple, Google, Microsoft, etc., or don’t think they should be regulated in some way, they just seem more aware of practical reality. If you want to know what opening iPhone means look no further than this; Everyone’s favorite iPhone will fall prey to shitty antivirus software companies. A world where you throw money away.
Maybe shitty antivirus software companies and shitty bank payment networks will make more money from a heavily regulated and opened iPhone, in the short term, and it will be users who are forced to throw their money away because they don’t understand the complexity being forced on them. As Steve Jobs once said, customers are pay Apple to make those choices and strip away the complexity. Not anymore.
In the new world order there aren’t bundled hardware + software smart devices to choose from, users choose the hardware, then they choose the software. Good luck with that. In the long term, a new world where hardware and software can’t be sold as a closed bundle is going to break a lot of hardware development business models out there, not just Apple’s. All those passionate ‘open’ proponents better be prepared for hard reality when the cut open the iPhone goose that laid golden eggs, and find nothing.
I have to admit I’m a little confused about the brouhaha over the latest Mark Gurman rumor: “Apple is planning a new service that will let businesses accept payments directly on their iPhones without any extra hardware.”
Okay, so what are we talking here? Oh, Apple is adding new Core NFC functions that let any 3rd party app be a POS software backend!
I doubt it.
Maybe PassKit NFC Certificates are going away! Look EU, look Australia…our NFC is open open for business! Anybody can use iPhone now as payment terminal! Anybody with an iPhone can skim payments cards in the wild!
Are you kidding?
You see there is this little thing called EMV c-e-r-t-i-f-i-c-a-t-i-o-n for all payment terminal hardware and separate certification for VISA, Mastercard, etc. Do people really think Apple is going to give those away for free along with a bundled POS app for payment transactions? Think again.
I don’t know about anybody else but I’m way more interested in how Apple would pull off the business software end of this rumor because the hardware end is already a given. And it would never see the light of day in FeliCa land Japan, that’s for sure. Success in America is not guaranteed either. Just ask the App Clips team.
I don’t put much faith in market data from companies selling research to sell their other ‘services’. If you ever observed how the backend research process works, you wouldn’t either. Nevertheless it’s fun to read and compare signposts along the never ending journey. MM Research Institute (MMRI) issued a PR tease for their Japanese smartphone marketshare report covering results for the first half of the Japanese 2021 fiscal year (April~September).
The Keitai Watch site paid for the full report and posted some numbers for the various MMRI breakdowns.
Marketshare ranking (all mobile phones)
FCNT (Fujitsu): 6.7
The category breakdowns show some interesting new developments
Marketshare ranking (smartphones only)
FCNT (Fujitsu): 5.9
The story here is that iPhone was selling well leading up to the iPhone 13 rollout, with the addition of Rakuten Mobile offering deeply discounted iPhone 12 and iPhone SE that could be bought with Rakuten Points certainly helping the most, once again demonstrating the power of the Rakuten Economic Zone.
Marketshare ranking (non-carrier SIM-Free only)
The non-carrier SIM-Free ranking interests me most. OPPO and XIAOMI released some interesting low end FeliCa Osaifu Keitai capable models recently. The surprisingly strong showing tells me that the market wants inexpensive SIM-Free Osaifu Keitai models. If there was a SIM-Free FeliCa/Osaifu Keitai ranking it would probably be Apple, OPPO and XIAOMI. OPPO wins because they deliver 5G and FeliCa for a very low price.
The Japanese Ministry of Internal Affairs and Communications (MIC) has listed 15 dual SIM iPhone models including iPhone 13 as “non-compliant” to government technical standards due to an inability to place emergency calls in certain dual SIM use situations. Apple posted a Japanese only support page on October 23 that acknowledges the emergency call issue when both data only SIM and voice call SIM are installed with a workaround: users need to make sure the SIM number in Mobile Data settings is a voice SIM in order to make emergency calls to 110/118/119 numbers (police, coast guard, ambulance).
Apple needs to fix this issue as quickly as possible. They should have caught it before iOS 15 shipped.
Journalist Tsutsumu Ishikawa posted an interesting article covering the May 17 Ministry of Internal Affairs and Communications (MIC) industry workgroup meeting examining fair competition in the Japanese smartphone market. Specifically it was a review of the effects from the October 2019 rule changes that eliminated JP carrier subsidies.
What other media outlets didn’t pick up was that Ann Rollins, Senior Director of Government Affairs at Apple attended the meeting and gave a presentation. Rollins pointed out that the MIC rule changes eliminating carrier locked devices and 2 year contracts, haven’t helped the industry (Rollin’s comments translated from Ishikawa san’s Japanese article):
Since the October 2019 rule changes, customer MNP switching between carriers has (seriously) declined instead of increasing, contrary to the objective of the rule changes…
While the smartphone penetration rate is rising, the number of shipments is sluggish. This is due to various factors, such as the lengthening of the handset replacement cycle and the use of used handsets, but from the perspective of the new handset market, despite the big event of switching to 5G, the situation is stagnate…
Unfortunately, the penetration of 5G devices accounts for only 3% of the total number of (Japanese) mobile phone subscribers. For example, there is official data that the penetration rate in South Korea is 17%. In order for customers to actually enjoy the benefits of new technologies and services through 5G, the spread of compatible devices is indispensable, but at present, the spread of 5G is generally sluggish…
Infrastructure and devices can be said to be two wheels. No matter how much you build a highway, it doesn’t make sense if you don’t have cars running on it. Now that the separation of mobile carrier contract plans and smartphones has been achieved, it may be necessary to make an exception for 5G purchases from the viewpoint of promoting the growth of 5G smartphones…
Measures are needed to prevent delays in the growth of 5G. What is important for users is the total cost of mobile phones. Now that complete separation has progressed and low-priced plans have appeared, it is desirable to leave what should be left to market competition to market competitively, which can be expected to further reduce total costs. We request that you (MIC) scrutinize the need to maintain a uniform device purchase subsidy and consider exceptions for 5G in order to provide users with a variety of options.
Unfortunately the MIC 2019 rule changes came just in time…for the COVID pandemic. iPhone 12 was not even a upgrade consideration for me because NTT docomo switched to 3 year contracts. My iPhone 11 Pro will be paid off by October 2022. When my partner upgraded his iPhone in December, the docomo representative said a lot of customers were taking a wait and see approach. The 5G network is still building out and there is the Face ID with face mask problem. He went with an iPhone SE2 because of price and the ease of Touch ID, the SE unfortunate success factor. I think lots of people did the same which matches another finding of the MIC workgroup: high-end smartphone upgraders have migrated to the middle range.
While there no guarantee MIC will consider Apple’s suggestion, allowing carriers to discount ‘up to ¥20,000’ would help the 5G transition. The market is still repositioning with recent carrier ‘budget brand’ initiatives like NTT docomo ahamo KDDI povo and Rakuten Mobile gaining 1st tier iPhone carrier status. Things are in flux but Apple asking MIC for 5G carrier subsidies does say something about the state of things.
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