China Mobile 'actively talking' to Apple about iPhone cooperation

in iPhone edited January 2014
China Mobile revealed on Wednesday that it is in ongoing negotiations with Apple to bring the iPhone to its network.

Chairman Xi Guohua said during a shareholders meeting that the company is "actively talking to Apple" on how the two companies can cooperate, Reuters reports.

"I can't give you too many details, but I'd like to repeat that both sides do hope to boost our cooperation," he added

Xi was responding to questions about when the world's largest carrier would begin offering the iPhone to its subscribers. As of earlier this year, China Mobile, which had 667 million subscribers as of March, is now the only carrier in China not selling Apple's handset.

Demand for the iPhone on China Mobile is expected to be quite high. Despite the lack of official sales of the device, the company has more than 15 million iPhone users on its network. One analyst projected earlier this year that China Unicom could sell 24 million iPhones in 2013.

Estimated China Mobile iPhone distribution
Credit: Morgan Stanley

Rival China Unicom was Apple's first carrier partner in the country. The second-place wireless operator began selling the iPhone 3GS in 2009. Though sales got off to a slow start, the company said in March that its partnership with Apple is now producing "better-than-expected results." China Telecom initiated sales of the iPhone 4S in March, attracting 200,000 preorders.

Even without China Mobile, Apple is seeing spectacular growth in iPhone sales throughout Greater China. Unit sales of the smartphone in the March 2012 quarter were five times those of the previous year.

According to one report from February, China Mobile officials are "aggressively negotiating" with Apple. One of the key obstacles, however, is the fact that the carrier operates a home-grown 3G wireless network that would require a separate device.

Financial analysts have speculated that Apple could wait until its next-generation iPhone to sign on with China Mobile. Morgan Stanley's Katy Huberty believes Apple is likely to make use of a Qualcomm quad-mode baseband chip that could make the iPhone compatible with "all 3G and LTE network flavors." For its part, China Mobile is in the midst of tests for its own TD-LTE network. Initial testing of the 4G has been completed, and the carrier expects to wrap up the next stage of tests by June 2013.


  • Reply 1 of 5
    dickprinterdickprinter Posts: 1,060member

    This would be sweet, that's a lot of iPhones, which equates to this-->

  • Reply 2 of 5
    red oakred oak Posts: 663member
    Should read "China Mobile could sell 24 million..."

    The 24 million is for 2013. Look three to five years out and the opportunity is closer to 50-75 million iPhones a year. If not more

    The other outstanding issue being China Mobile wanting a cut of content and app sales, similar to what Google does (although these revenues are very small for Android). Apple should hold its ground and not make an exception. ITunes and the App Store are run at breakeven due to the long tail cloud nature (users can download multiple times and om multiple devices per purchase). No deal here
  • Reply 3 of 5
    reveriereverie Posts: 66member
    Apple needs this deal with China Mobile, as well as one with NTT Docomo, to keep their yearly growth rate above 75 % for 2013 as well. They already have distribution channels to 90 % of the postpaid customers in the world and after the phenomenal success with adding Verizon, Sprint and KDDI au last year, there will be no more boosts from adding carriers in the future, besides these two big holdouts.

    The iPhone can still grow 30 % per year or so for several years on these existing carriers and existing prices, but why be content with that? Sooner or later Apple will want to release a phone that is even cheaper than the 3GS to keep up hyper growth. In real prices the cheapest iPhone today costs $375, and for Apple there are still so many sales and so much revenue to be found at $299, $249 and eventually (several years from now) even $199 without contract.

    They can quadruple their unit sales and more than double their profits by hitting these mid-market price points over the years, of course always with Apple-like margins, offering the premium alternative to Android at every given feature set. I think Apple are on that road, with the 3GS just the first step, and they'll eventually have 30 % of the total phone market worldwide (today it's 8 %).

    If China Mobile and Docomo are coming on board, they can wait with a cheaper model until late 2013. Otherwise they should do it in late 2012, or risk that their growth rates will fall below 50 % next year.
  • Reply 4 of 5
    gprovidagprovida Posts: 247member

    I on claim special knowledge, but it is my understanding that the bigger obstacles is not technical, but rather China Mobile wants a piece of App Store business and more control on the user experience.  They do not want to be a "dumb" pipe provider, but their realization that they are at risk of loosing their strongest and most profitable current and future customers due to lack of iPhone.  Hhhmmm sounds like Verizon all over again.  

  • Reply 5 of 5
    gprovidagprovida Posts: 247member

    I on claim special knowledge - Opps I do NOT claim special knowledge

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