Apple iPhone talks with Chinese carriers gone rocky - reports
Multiple reports this week are suggesting that iPhone talks between Apple and China's two most popular wireless carriers -- China Mobile and China Unicom -- have failed as a result of revenue sharing disputes. China Mobile, however, denies the claim.
The demands by Apple that it receive a percentage of the wireless service revenues generated by would-be users of a localized version of the touch-screen handset have unsurprisingly been met with opposition from both Far Eastern providers.
"Previously, the company intended to cooperate with China Unicom, China's second largest mobile telecoms carrier, but the talks quitted due to the divarication on the sharing proportion of the proceeds," Trading Markets said on Tuesday.
That report was followed Friday by a similar one from the Chinese-language Southern Daily, which stated that negotiations between Apple and China Mobile, China's largest mobile phone operator by subscribers, had failed. The two parties couldn't reach an agreement because of differences over revenue sharing, the paper said.
For its part, however, China Mobile has denied the latest claim, insisting, according to Bloomberg, that it is still in discussions with Apple to offer the iPhone to Chinese consumers sometime in 2008.
Telecom executives familiar with the discussions between the iPhone maker and China Mobile had said earlier in the month that a number of contingencies on Apple's part were likely to prolong the process.
Specifically, there's a precedent among Chinese telecom operators that they do not, under any circumstances, agree to share their revenues with outside parties, as Apple has requested (and achieved) from all of its iPhone partners thus far.
"[O]ur business model does not entail sharing revenue with terminal producers -- we don't share revenue. That's a Chinese rule," one executive told Reuters on condition of anonymity. "All it is right now, on the iPhone and Apple, is that the firm welcomes their approach."
Apple stated earlier this year that it hoped to launch iPhone in Asia during the 2008 calendar year.
The demands by Apple that it receive a percentage of the wireless service revenues generated by would-be users of a localized version of the touch-screen handset have unsurprisingly been met with opposition from both Far Eastern providers.
"Previously, the company intended to cooperate with China Unicom, China's second largest mobile telecoms carrier, but the talks quitted due to the divarication on the sharing proportion of the proceeds," Trading Markets said on Tuesday.
That report was followed Friday by a similar one from the Chinese-language Southern Daily, which stated that negotiations between Apple and China Mobile, China's largest mobile phone operator by subscribers, had failed. The two parties couldn't reach an agreement because of differences over revenue sharing, the paper said.
For its part, however, China Mobile has denied the latest claim, insisting, according to Bloomberg, that it is still in discussions with Apple to offer the iPhone to Chinese consumers sometime in 2008.
Telecom executives familiar with the discussions between the iPhone maker and China Mobile had said earlier in the month that a number of contingencies on Apple's part were likely to prolong the process.
Specifically, there's a precedent among Chinese telecom operators that they do not, under any circumstances, agree to share their revenues with outside parties, as Apple has requested (and achieved) from all of its iPhone partners thus far.
"[O]ur business model does not entail sharing revenue with terminal producers -- we don't share revenue. That's a Chinese rule," one executive told Reuters on condition of anonymity. "All it is right now, on the iPhone and Apple, is that the firm welcomes their approach."
Apple stated earlier this year that it hoped to launch iPhone in Asia during the 2008 calendar year.
Comments
Specifically, there's a precedent among Chinese telecom operators that they do not, under any circumstances, agree to share their revenues with outside parties, as Apple has requested (and achieved) from all of its iPhone partners thus far.
"[O]ur business model does not entail sharing revenue with terminal producers -- we don't share revenue. That's a Chinese rule,"
Talk about arrogant...
One of the first rules in business, be flexible (both parties involved!).
It should be fun to see who dictates what to whom here.
Talk about arrogant...
One of the first rules in business, be flexible (both parties involved!).
It should be fun to see who dictates what to whom here.
The Chinese don't care a whit if Apple enters China or not.
Hey, if the Chinese telcos don't want to share profits, that's fine. It just means Apple will have to make their money entirely from the cost for the handset. So they'll all end up costing the equivalent of $1000 (just like the unlocked iPhones in Europe.)
I completely agree with your comment. No need to fight it out.....
The Chinese don't care a whit if Apple enters China or not.
Heh, yeah, not when they can clone the hardware, copy the software, and their government is too conflicted and corrupt to prosecute! I'm sure talks are continuing, so China Mobile has time to bribe more government officials and Meizu can finish up the clones.
Hey, if the Chinese telcos don't want to share profits, that's fine. It just means Apple will have to make their money entirely from the cost for the handset. So they'll all end up costing the equivalent of $1000 (just like the unlocked iPhones in Europe.)
Sure, but that doesn't work with consumers. People in general do not "see" or "feel" monthly payments like they do initial purchace payments. In the US, if people had to pay the whole amount Apple gets over the life of a 2 year contract to Apple in a lump sum they would not do it--even if the monthly payments were lower and it all worked out the same in the end.
I assume Chinese consumers are similar to American ones in this respect.
Besides, I always assumed the $1000 unlocked phones in Europe were more for regulatory reasons--are many people going to buy those?
Talk about arrogant...
One of the first rules in business, be flexible (both parties involved!).
It should be fun to see who dictates what to whom here.
I've never really heard of Apple being flexible in their business dealings.
I've never really heard of Apple being flexible in their business dealings.
They're flexible all the time. Look at iTunes: songs have DRM Apple doesn't want, as a compromise with the RIAA. (No, DRM isn't there to sell iPods: most music on iPods is DRM-free, from CD.)
Heh, yeah, not when they can clone the hardware, copy the software, and their government is too conflicted and corrupt to prosecute! I'm sure talks are continuing, so China Mobile has time to bribe more government officials and Meizu can finish up the clones.
Meizu has nothing but a photoshop iPhone pic and a piece of paper with ideas how to make a iPhone better, nothing Else.
They're flexible all the time. Look at iTunes: songs have DRM Apple doesn't want, as a compromise with the RIAA. (No, DRM isn't there to sell iPods: most music on iPods is DRM-free, from CD.)
All the time? One example breaks "never" but that's only one example that doesn't make a case for "all the time".
Telecom executives familiar with the discussions between the iPhone maker and China Mobile had said earlier in the month that a number of contingencies on Apple's part were likely to prolong the process.
Specifically, there's a precedent among Chinese telecom operators that they do not, under any circumstances, agree to share their revenues with outside parties, as Apple has requested (and achieved) from all of its iPhone partners thus far.
Let's not forget the other looming precedent...That China Mobile is a member of the OHA! This will certainly have an impact on financial agreements.
http://www.openhandsetalliance.com/oha_members.html
Cory
Sure, but that doesn't work with consumers. People in general do not "see" or "feel" monthly payments like they do initial purchace payments. In the US, if people had to pay the whole amount Apple gets over the life of a 2 year contract to Apple in a lump sum they would not do it--even if the monthly payments were lower and it all worked out the same in the end.
I assume Chinese consumers are similar to American ones in this respect.
Besides, I always assumed the $1000 unlocked phones in Europe were more for regulatory reasons--are many people going to buy those?
If the people balk at the price, then the carriers won't sell many phones. I think customer demand (especially as more of the Chinese see the rest of the world using iPhones) will apply enough back-pressure that either the carriers will back down or the consumers will start saving up to be able to buy the device (resulting in future sales, but nothing short-term.)
And I wouldn't assume Chinese customers to be the same as Americans. Asians in general seem to take a much more long-term view of the world. I would expect a larger percentage of them to be willing to save up for an expensive item. They might even prefer it over a low up-front cost plus higher monthly payments.
All the time? One example breaks "never" but that's only one example that doesn't make a case for "all the time".
Selling iphones unlocked in France without a lawsuit, $100 back to early adopters of the iphone... more?
The Chinese don't care a whit if Apple enters China or not.
yeah that's right! It'll be better if Apple launches iPhone first in Japan and Taiwan. Rather than ChinaPRC. The chinese doesn't even care about Apple.
"under no circumstances"... sounds very snobby to me... also how chinese joint-ventures exploit their foreign counterparts is a slap in the face of every honest and hard trying business partner in china...
i hope the WTO does it's job of making it clear to the commies that this will not be tolerated...
apples pratices are not the issue here... that's a take it or leave it approach... the iphone gets people to those providers they didn't have before... if the chinese are so stupid to pass on that that's their problem... so far every apple GSM partner has been more than happy with the iphones reception... i haven't heard one rumuor that any cell exectuvie is unhappy with the iphone sales, not in the US, not in germany, not in the UK... next is france and switzerland and austria...
The Chinese don't care a whit if Apple enters China or not.
WRONG
Selling iphones unlocked in France without a lawsuit, $100 back to early adopters of the iphone... more?
the unlocked iphones in france and germany are much more expensive than the locked ones...
and the other GSM providers don't have the EDGE coverage nor the visual voicemail infrastructure in place to accommodate the iphones owners!
Hey, if the Chinese telcos don't want to share profits, that's fine. It just means Apple will have to make their money entirely from the cost for the handset. So they'll all end up costing the equivalent of $1000 (just like the unlocked iPhones in Europe.)
Exactly