Why you can't buy Apple's new phone

If you've been awaiting the release of Apple's iPhone, take a deep breath. It may be hip and functional, but it isn't available in Canada.

CATHERINE McLEAN

Globe and Mail Update

The most hyped consumer electronics device in years will make its debut on June 29, but Apple Inc.'s iPhone will be conspicuously absent from Canadian store shelves. Sold out? No — just not for sale.

The creator of the iPod and Macintosh is focusing on rolling out its latest gadget, a sleek cellphone, in the United States. Other markets will follow, though Apple hasn't divulged any launch dates.

What's becoming clear is Canadians who want to shell out more than $500 for their own iPhone will have to wait some time for the chance.

A likely supplier in Canada, Rogers Communications Inc. , recently admitted little was happening on that front.

"The truth is we aren't very far with Apple," Bill Linton, Rogers' chief financial officer, told a conference last month. "They're concentrating on this launch and the U.S., and when they decide to turn their mind to other markets, we'll be in line."

The iPhone is the latest example of an emerging trend: expensive "it" cellphones. Wireless devices are no longer relegated to the pages of geek magazines. Instead, designer cellphones are featured in Vogue fashion shoots, sold in luxury stores and have been the target of at least one highway heist.

These are not the cheap and indistinguishable devices found in most people's pockets.

With cellphones quickly becoming a commodity, manufacturers are looking for a way to create buzz around their gadgets.

So they are adding diamonds or teaming up with European fashion houses such as Prada and Dolce & Gabbana to set their cellphones apart.

For now, high-end cellphones are a niche, especially in North America. Unlike the rest of the world, wireless devices are mostly sold exclusively through carriers in Canada and the U.S., reducing the selection.

Even if you purchased a cellphone from abroad, such as an iPhone, there are no guarantees it would work in Canada. There are different network technologies, and the phone's software may need tinkering by the carriers at home.

AT&T Inc., for example, has an exclusive multi-year contract for the iPhone in the U.S. And the Prada phone from LG Electronics hit the markets in Europe and Asia earlier this year, but no decisions have been made on whether it will come to Canada. LG would love to bring it here, but it's also up to Prada and the carriers.

It's all about deciding "if there are enough consumers that would gravitate to the product to justify its existence in the Canadian market," said Frank Lee, a spokesman for LG's Canadian unit.

Another pattern that works against luxury cellphones is that wireless carriers in North America tend to heavily subsidize devices in exchange for customers signing long-term contracts. As a result, consumers aren't used to coughing up large amounts of money for cellphones, limiting demand for the trendiest and costliest models.

"There's a perception mobile phones are free," said Alberto Torres, president of Vertu, Nokia Corp.'s line of handcrafted cellphones that it started making in 2002 and cost from $4,350 (U.S.) to $310,000.

However, Mr. Torres believes hot cellphones like the iPhone, LG's Prada, Motorola's Dolce and Gabbana, and of course Nokia are changing that view.

"These phones are beginning to change the mindset of the North American customer in general about the value of phones," Mr. Torres said in a phone interview. "That's a good sign for the industry. When the North American consumer understands the value of mobile phones, it will open up opportunities for everyone."

Vertu is preparing to relaunch its products in Canada in coming months, starting off in top jewellery stores in Montreal, Toronto, Vancouver and Calgary.

Some high-end cellphones are already selling well in Canada. Holt Renfrew, for example, reports strong demand for the gold-coloured Dolce and Gabbana models from Motorola Inc. that go for $715 (Canadian).

There was even a waiting list at one point. The luxury retailer has also carried high-end Nokia wireless devices. Its customers also want the Prada cellphone.

"We're getting calls about it already," said Lanita Layton, vice-president for Holt Renfrew's men's wear and children's wear. "Customers are asking about it."

While they are exclusive and attractive, what these fashion cellphones aren't about is technological advances and usability, observers said. On the other hand, the buzz around Apple is at least as much about functionality as about style.

This is where the iPhone should set itself apart. Apple's genius is taking technology that already exists, but is hard to understand, and making it easy to use.

The iPhone, for example, has just one button. Users touch the screen to dial, send an e-mail or choose a song. And it integrates its popular iPod device into the cellphone.

"Using an iPhone is going to be a very pleasant experience," said Forrester Research Inc. analyst Charles Golvin, who believes it has wider appeal than fashion cellphones.

But Kaan Yigit, president of consulting firm Solutions Research Group, points out Canadians tend to be more price conscious and the iPhone might not meet with the same success when it eventually crosses the border. In the U.S., it starts at $499 (U.S.).

"If it were introduced at $499, the iPhone would still be a pretty niche product, with many, many more admirers than buyers in Canada," Mr. Yigit said.

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