Apple Watch Hits Cellular Snag in China
October 19 2017 - 7:13AM
Dow Jones News
BEIJING-- Apple Inc. has another headache in China: this time
with its latest watch.
For the first time, the Apple Watch can have an independent
cellular connection, allowing people to use it to make voice calls,
send and receive text and data even if the watch isn't wirelessly
connected to an iPhone.
But in China, the feature was abruptly cut off for new
subscribers, without explanation, after a brief availability with
one telecom company.
Industry analysts say the suspension likely stemmed from Chinese
government security concerns to do with tracking users of the
device, which uses different technology than standard mobile
phones.
China strictly regulates mobile phones and all three major
telecom service providers are state-owned companies. To get a
SIM--subscriber identity module--card to operate the phone, users
must register under their real names with a network carrier.
The latest Apple Watch poses a challenge to the existing user
identification system, industry analysts said. The watch contains a
new and tiny version of the SIM card, called embedded SIM, or eSIM.
The eSIM is embedded in the watch by Apple, not by carriers.
The benefit of a device carrying an eSIM is that, with software,
users can choose a telecom operator and a communications plan. But
in China, that new system raises the question of how carriers and
regulators can track the device user's identity.
"The eSIM (system) isn't mature enough yet in China," one
analyst said. "The government still needs to figure out how they
can control the eSIM."
When the Apple Watch went on sale Sept. 22, the cellular service
was available exclusively to qualified China Unicom customers. But
after Sept. 28, new cellular subscriptions were cut off without
explanation. Those who had previously registered are so far
unaffected.
In a notice on its website, China Unicom said the cellular
feature had been offered on a trial basis. It gave no information
on when it might resume.
An Apple spokeswoman referred queries to China Unicom.
"We were informed by China Unicom that the new cellular feature
on the Apple Watch Series 3 has been suspended," Apple said in a
statement.
China's regulator, the Ministry of Industry and Information
Technology, didn't respond to requests for comment. China Unicom
and the two other state-owned telecoms didn't respond to requests
for comment.
Ministry officials are likely studying how to resolve the issue
before allowing any broad cellular access to the Apple Watch, which
could take months, said the analysts, who asked not to be
identified.
In August, the Ministry of Industry and Information Technology
approved trial certificates--but not a formal certificate--for
cellular-version Apple Watch devices, documents posted on the
regulator's database showed.
Qiu Tian, 19, who lives in southern China's Guangxi Province,
said he paid $600 for his latest Apple Watch on the debut day and
was disappointed he couldn't use the device to make calls.
"I realized that this function probably wouldn't be fully
supported by domestic carriers, but I didn't expect it would be
halted this soon, said Mr. Qiu.
China is a critical market for Apple, but it has had a series of
setbacks here recently. Its iPhone was once top seller in China,
but its market share has fallen to about 7%, from an estimated
16.5% in late 2014.
Apple was also forced to shut down its iBooks and iTunes Movies
services in China last year under government pressure, and this
summer removed about 400 " virtual private network" apps from its
China App Store that enabled users to circumvent government
internet filters.
The company's iPhone X, now being assembled in China, has been
plagued by manufacturing problems, prompting Apple to set its sales
start date to November--more than a month later than in past
years.
Yang Jie and Yoko Kubota contributed to this article.
(END) Dow Jones Newswires
October 19, 2017 06:58 ET (10:58 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Aug 2024 to Sep 2024
Apple (NASDAQ:AAPL)
Historical Stock Chart
From Sep 2023 to Sep 2024