iPhone rival to be launched with Microsoft-based software

07 May 2008 / by Daniela Gieseler
iPhone producer Apple is facing challenges on several fronts as a Microsoft-based touch screen phone is about to be launched.

Additionally, Apple's strategy to sell the iPhone through one network per country also seems to be unravelling.

The HTC Diamond, which runs on Microsoft software and, like the Apple iPhone, doubles up as a touch screen phone, digital music player and internet browser, will be going on sale in the UK in June.

It has a distinct advantage over the Apple device as it will be given out free to people who have a contract with the leading network operators. In contrast, users of the iPhone have to fork out an initial £267 to purchase the handset on top of the monthly tariffs starting at £35.

John Wang of HTC is optimistic about the impact of his company's new device: "We have been working on this since long before the iPhone and we are confident the way we use the touch screens is far more intuitive. We are confident that we can take on Apple."

The HTC phone also offers high-speed broadband internet access which highlights one of the iPhone's weaknesses, as the Edge technology it uses to access the internet can be frustratingly slow if users are not in a wireless hotspot.

However, Apple is expected to remedy this with the launch of a new, faster 3G version of the iPhone next month, with a storage capacity of at least 8GB which by far exceeds the HTC Diamond's 4GB.

Meanwhile, Apple's strategy of tying the sale of the iPhone to once provider per country is under fire, as Vodafone and Telecom Italia announced yesterday that both had won a contract to sell the phone in Italy this year.

This might be a sign that the period of nearly one year in which only one mobile phone network operator per country had distribution rights to the phone is coming to an end.

Market experts believe it is quite likely that operators in other countries might revolt against Apple's onerous contract clauses, one of which commits the distributor to share 10 per cent of revenues in return for the exclusive right to sell the iPhone for a two-year period.

Ben Woods, telecoms analyst at CCS Insight, believes Apple might change strategy: "I think Apple has recognised that its exclusive deals with operators pushed more people to unlock iPhones and meet demand from customers on competing networks who wanted Apple's hot product."

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