Nation's drive to establish new international standard has led to cell phone users' interests being sacrificed, telecoms experts tell Peng Yining

When it comes to technology, national leaders insist China's sights are fixed firmly on innovation, not imitation. But experts warn that the desire to set global trends rather than follow them has led to consumers' interests being sacrificed for "techno-nationalism".

The claims come amid anger over a government block on the iPhone's Wi-Fi function that analysts claim has frustrated buyers and caused a boom in the gray market for the Apple bestseller.

The decision to disable Wi-Fi - wireless Internet access - on iPhones sold on the mainland was to allow China more time to establish its homegrown standard, WAPI, which plugs gaps in security and protects users, said State telecommunications officials.

"Homegrown standards are necessary for an industry's development. We can't use other countries' standards forever and always let others be proactive," said Qin Zhiqiang, vice-director of the Technical Committee on Wireless Network and Secure Network Access, which runs WAPI.

WAPI was introduced in 2003 but faced resistance from manufacturers abroad. It was the country's first entry into the global standard market and Western nations held strong preconceptions about China's technology, said Qin.

WAPI was finally recognized by the International Organization for Standardization (ISO) last June.

"China didn't recognize Wi-Fi because of its safety loopholes and lack of regulation, not because we had our own homegrown standard," said Qin, who revealed 120 companies have already signed up to work with the committee since 2006.

Kan Kaili, a telecoms expert based in Beijing, disagreed. "China disabled Wi-Fi because of WAPI. In order to promote this so-called national innovation, China disabled Wi-Fi and sacrificed the interests of millions of cell phone users," he told China Daily. "Users can't freely and conveniently access the mobile Web. If they want to, they must take the risk buying a smuggled phone on the gray market."

Although establishing industry standards is important, officials failed to put the consumer first when pushing their WAPI standard, said the professor with the Beijing University of Post and Telecommunications' economics and management school.

"Some standards bring profits, others standardize development. To make the roads safe, all vehicles drive on the left or right side - that's standard, not patent. Wi-Fi is a standard without much economic profit," said Kan. "Some international standards are promoted by government, some grow to meet market demand. Both should put consumers first.

"By persisting with WAPI, Chinese cell phone users have had no legitimate access to Wi-Fi for years. WAPI is no great advancement compared to Wi-Fi."

There are more than 700 million mobile phone users in China and about 181 million regularly use wireless mobile Web services, according to a report by China Internet Network Information Center last October. The Wi-Fi Alliance, a global non-profit organization promoting the adoption of Wi-Fi, also said that 34 percent of all Wi-Fi users access services through cell phones.

"WAPI is safer than Wi-Fi because it prevents data loss and invasions of the network. These safety problems must be solved, but most users don't even realize there are problems," said Xiao Long, chief engineer for IWNCOMM, the major technical supplier and active partner of WAPI.

"Wi-Fi is a standard developed by foreign countries. What if there was political disagreements between China and them? We need WAPI to protect China's information security," he said.

After WAPI was recognized by the ISO, the Ministry of Industry and Information Technology issued a notice to mobile phone manufacturers allowing them to enable Wi-Fi on handsets if they integrate the homegrown standard.

"WAPI is generally the same as Wi-Fi only with extra security protocols to resolve the existing security loopholes in Wi-Fi," Li Mofang, former chief engineer for China Mobile, the nation's largest telecom operator, told China Daily. "WAPI is the Chinese national standard and is strongly supported by the ministry. However, it still isn't in wide use, even in China."

Xiao added that Broadcom, which is based in California and is the largest Wi-Fi chip manufacturer in the world, started updating its products to include WAPI last November.

China Unicom, the country's second largest telecom operator and the only one licensed to sell Apple's iconic iPhone, disabled the Wi-Fi on the first batch of handsets but are in talks with the government and hope to enable the function soon, according to a report released on Dec 29 by NetEase, a popular Chinese news portal.

"The Wi-Fi function is only disabled when the phone is imported in China," said Wang Hongbin, who works in research and development at Motorola China, one of the biggest manufacturers of wireless cell phones.

Integrating the standards is cheap and easy because it only needs a software update, said Wang. Motorola last year introduced two types of mobile phones that integrate WAPI and Wi-Fi.

"Manufactures did not suffer through Wi-Fi being disabled, Chinese consumers did. For a long time they didn't have legal access to mobile Wi-Fi. Even now, consumers have to buy a smuggled iPhone if they wanted to use Wi-Fi," he said.

A poll of those who purchased smuggled third-generation (3G) cell phones discovered 58 percent were attracted by the illegal Wi-Fi function, according to a report on Nov 20 last year by Internet Consuming Research Center, which was founded by Zhongguancun Online, one of China's largest online retailers of electronic goods.

Ge Shaochen, a self-confessed Apple fanatic from Beijing, told China Daily he bought an iPhone on the gray market solely because of the Wi-Fi function.

"This is the only smuggled Apple product I have bought. I didn't want one of those 'castrated' iPhones," said the 23-year-old Web designer. "The iPhone has a big screen and was designed to browse the Internet. Why can't Chinese use mobile Wi-Fi like people abroad?"

Instead of collecting his new, sleek cell phone from one of capital's "bright, spacious and exclusive" licensed Apple stores, Ge instead picked up his new gadget at a bustling digital electronics mall in Tianjin, where stalls sell iPhones shipped from abroad, as well as Hong Kong.

"The packing was a little damaged and opened, but it was OK because the seller is a friend of mine. I would only buy the phone from a friend. There are so many fake and refurbished iPhones on the gray market," he said.

"The seller sold it to me in the name of a procurement agent, who purchased the iPhone in the United States. The iPhone with the Wi-Fi function can be bought all over the world, even Hong Kong. Online shops have made getting a complete iPhone easier, too."

The legal models sold by China Unicom since Oct 30 cost from 5,000 to 7,000 yuan ($730 to $1,000). Ge paid 4,500 yuan for his smuggled iPhone 3G. However, it came with no after-sales service or guarantee, nor quality certifications and network entry permits.

"Compared with buying from China Unicom, I paid less and got more functions," he said.

To connect his smuggled phone to a Chinese network, he used software called Prison Break, which costs up to 100 yuan in digital markets across the country.

"This is the risk a mobile Wi-Fi user must take. At least I bought a real iPhone. Disabling Wi-Fi is an insult to the user. What concerns me more is why China disables a function every other country is using? It is unfair," said Ge.

Jiading, a northwestern district of Shanghai, became China's first "wireless city" project on Jan 1, 2008, with plans for up to 300 Wi-Fi networks. Beijing also established a 100-sq-km wireless zone during the 2008 Olympic Games and expanded it to 625 sq km by the end of last year, according to operators CECT-Chinacomm Communications Co Ltd.

"There are more and more devices supporting Wi-Fi, and network coverage is getting larger and larger," said Guo Qiang, founder of Huoju Network, a website promoting wireless Internet connectivity. "I would like to see China release a homegrown standard, but only if it helps the industry's development."

A report launched by the National Institute of Standardization in 2005 divided the nation's technology standards strategy into two steps: until 2010, China would follow international standards and participate in the research; from 2011 to 2020, China would successfully set standards in important fields, including electronics.

"Independent innovation is more a political slogan than real practice," telecoms expert Kan said. "Homegrown intellectual property rights may bring profits for the country but something is only a success if it is accepted by the customers and markets."

WAPI is not China's first shot at adopting and commercializing a new international standard on a global scale.

EVD - China's rival to DVD - was put into development in 1999. A format to play optical discs containing high-definition material, EVD was intended to help Chinese media producers avoid paying 1 billion yuan a year to foreign DVD patent holders for using the technology.

However, EVD fared poorly upon its released in January 2004. Players sold for 1,900 yuan, more than double the cost of a DVD player, while customers were also disappointed to discover they could only enjoy the high-definition picture of EVD with a high-definition television set.

(Source: China Daily)

2013-07-17