Apple CEO Tim Cook meets with China Mobile, world's largest carrier

Posted:
in iPhone edited January 2014
While in China, Apple Chief Executive Tim Cook gave an interview with local media, in which he revealed that he met with China Mobile, the world's largest wireless carrier.

Cook declined to say in his interview with Sina Tech what came of his meeting. Rumors of the iPhone becoming available on China Mobile have persisted for years, but no deal has been struck yet.

A spokesman for China Mobile confirmed to CNBC that the talks took place, and said the two sides discussed "matters of cooperation." No further details were given, as a confidentiality agreement was reportedly signed.

Currently, the iPhone is available on carriers China Unicom and China Telecom. China Mobile's president confirmed a month ago that talks with Apple were ongoing, but a deal had not been reached.

Tim Cook


Analyst Amit Daryanani of RBC Capital Markets believes Apple could earn 13 percent of China Mobile's 75.6 million high-speed 3G subscribers. That doesn't include the nearly 700 million total subscribers the carrier has, some of which could switch to smartphone plans for the iPhone.

Daryanani predicted in November that a potential deal with China Mobile could add about $3 to Apple's annual earnings per share, and $45 to the company's stock price.

The number of 3G subscribers in China grew 88 percent year over year in 2012 to 222 million. China Mobile is the only major carrier in the country that does not have a deal for Apple's iPhone, which market watchers believe has helped to stifle the carrier's smartphone adoption rates.

Also while in China, Tim Cook visited an Apple reseller with marketing chief Phil Schiller. The two were spotted by AppleInsider reader Anthony while they spoke with the staff at Dragonstar, an Authorized Apple Reseller at China World Shopping Mall.
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Comments

  • Reply 1 of 41
    rogifanrogifan Posts: 10,669member
    AAPL way up pre market. :lol: Seems to me Cook's visit to China the same week as CES isn't a coincidence.
  • Reply 2 of 41
    blackbookblackbook Posts: 1,361member
    I think the rumored "low cost" iPhone (iPhone Mini) is going to be a major focus of the China Mobile deal.
  • Reply 3 of 41

    Quote:

    Originally Posted by blackbook View Post



    I think the rumored "low cost" iPhone (iPhone Mini) is going to be a major focus of the China Mobile deal.




    I don't think so. I think the major focus is whether China Mobile is going to subsidise iphones or not.


    Because if they don't, that could really become a problem for apple because of the premium price they demand for the iphone and the fact that not many people are able or willing to spend so much money for a smartphone.

  • Reply 4 of 41
    After the "coordinated" hammering in the press recently it would seem that a few funds wanted Apple down and are now starting to buy...?
  • Reply 5 of 41
    jblongzjblongz Posts: 154member
    Why can't these billionaires fix their TEETH!?
  • Reply 6 of 41
    Can a Chinese language only low-end Apple iPhone cannibalize US sales?
  • Reply 7 of 41
    ksecksec Posts: 1,568member


    When Apple are going to launch the next iPhone this coming summer or later. It will include, for the first time a Baseband and Amps that works with TDS-CDMA. The 3G standard currently being used in China Mobile.


     


    It probably doesn't matter then whether China Mobile will provide iPhone with a price plan at lower subsidised cost. People will be rushing to buy the new iPhone anyway. Those who are already on the China Mobile Network would want to upgrade. Those are are still waiting for a China Mobile 3G compatible iPhone will also go to buy.


     


    Assuming there is no design changes for iPhone5s, this is a good thing as the spike level for iPhone S is generally much lower then a redesign. China Mobile TDS-CDMA could help to push the demand higher then usual iPhone S level.

  • Reply 8 of 41


    Originally Posted by changeover View Post

    …that could really become a problem for apple because of the premium price they demand for the iPhone and the fact that not many people are able or not willing to spend so much money for a smartphone.


     


    It's the best-selling phone on the planet. Why would you even say this nonsense?

  • Reply 9 of 41

    Quote:

    Originally Posted by Tallest Skil View Post


     


    It's the best-selling phone on the planet. Why would you even say this nonsense?



     


    Because china is not like the west. And in china the spending capacity is probably not the same as in the US or Europe.


    I'm guessing that most of the people in china are on a different level in the hierarchy of need (Maslow) so the focus might not be on a phone that you need to save money for months. This has nothing to do whether it's the best-selling phone on the planet.


    China is not the planet. ..

  • Reply 10 of 41


    Originally Posted by changeover View Post

    Because china is not like the west.


     


    They've been scarfing up the iPhone as it is…

  • Reply 11 of 41

    Quote:

    Originally Posted by Tallest Skil View Post


     


    They've been scarfing up the iPhone as it is…





    But not in the same relation as the west. And that's the only point I'm making.


    Look at the iphone 5 first weekend sales numbers. They sold over five million the first weekend to US, Australia, Canada, France, Germany, Hong Kong, Japan, Singapore and the UK (together they have a population as about the same as china mobile has users... 700 million something)


    The first weekend in china they sold over two million.


    Twice as many people, half the sales.


     


    My only point is this. The iphone 5 might be too expensive to the majority of chinese, if china mobile decides not to subsidise the iphone 5.

  • Reply 12 of 41


    Originally Posted by changeover View Post

    But not in the same relation as the west.


     


    Because they're not on all the carriers!

  • Reply 13 of 41

    Quote:

    Originally Posted by Tallest Skil View Post


     


    Because they're not on all the carriers!



    And in said countries they are on all carriers? How about t-mobile?


     


    China mobile already hosts many iphone subscribers. Just because they don't sell the phone doesn't mean you're not able to have one.


    If they are on all carriers or not has nothing to do with the "population-sales" relation.


    Especially not in china where, as I have read, it is not common to subsidise phones. If you pay full price either way you can buy an unlocked phone and choose the carrier afterwards.

  • Reply 14 of 41
    xsuxsu Posts: 401member

    Quote:

    Originally Posted by changeover View Post




    I don't think so. I think the major focus is whether China Mobile is going to subsidise iphones or not.


    Because if they don't, that could really become a problem for apple because of the premium price they demand for the iphone and the fact that not many people are able or willing to spend so much money for a smartphone.



     


    Are you kidding?  Just a couple of years ago, none of the Chinese carriers were subsidizing iPhone, and the 3G connection doesn't work, still there were millions of iPhones on their network.  The iPhone's price is not barrier to Chinese people.  It's true that not every Chinese can afford the full price iPhone, however, the small percentage of Chinese people that can is still a larger number than a lot of market's total population.

  • Reply 15 of 41
    jfc1138jfc1138 Posts: 3,090member


    What are service costs in China? Remember the "cost" of a cellphone is a sum of the hardware and the service cost over the life of the phone: and the service cost is always the one that dwarfs the hardware: subsidy or not. So China Mobile deciding to pass on more of the hardware cost to it's customers might not move the dial all that much.

  • Reply 16 of 41
    Service costs are quite low in China, unless you insist on gigabytes. A voice/SMS + 300 MB plan runs me about US$8 per month on China Unicom.
  • Reply 17 of 41

    Quote:

    Originally Posted by xsu View Post


     


    Are you kidding?  Just a couple of years ago, none of the Chinese carriers were subsidizing iPhone, and the 3G connection doesn't work, still there were millions of iPhones on their network.  The iPhone's price is not barrier to Chinese people.  It's true that not every Chinese can afford the full price iPhone, however, the small percentage of Chinese people that can is still a larger number than a lot of market's total population.





    Yes a small percentage of Chinese people is a large number of customers. That's the point. If apple would lower the price the more chinese would be able and willing to buy an iphone. One percent more people = 13 Millions of possible iphone sales. Even if you lower the margin for that, you would still make a whole lot of money.


    It's not about market share and it's not about margins. It's about profit.


    Why should apple not take advantage of this situation and make a cheaper product? Cheaper product = more customers. More customers = more profit even with lesser margins.

  • Reply 18 of 41

    Quote:

    Originally Posted by changeover View Post


    And in said countries they are on all carriers? How about t-mobile?


     


    China mobile already hosts many iphone subscribers. Just because they don't sell the phone doesn't mean you're not able to have one.


    If they are on all carriers or not has nothing to do with the "population-sales" relation.


    Especially not in china where, as I have read, it is not common to subsidise phones. If you pay full price either way you can buy an unlocked phone and choose the carrier afterwards.



    Stop being obtuse. T-Mobile is a piddling carrier in the US. Apple is signed up with the major carriers in every market you mentioned.


     


    In China, Apple still lacks the largest carrier, on top of which, 3G penetration is still only 10% - 20% of the market. If you look at (i) sales as a proportion of the addressable market, and (ii) the rapidly increasing availability of 3G, China could well end up as the single biggest market for iPhones in a few years. The growth opportunities are tremendous.


     


    Let's check back in a couple of years, shall we?

  • Reply 19 of 41


    Originally Posted by changeover View Post

    If apple would lower the price the more chinese would be able and willing to buy an iphone.


     


    Maybe Apple should make the iPhone free off-contract. Or maybe they should have a business model that works, since they'd not only lose billions, they couldn't make enough, destroying their reputation.

  • Reply 20 of 41

    Quote:

    Originally Posted by anantksundaram View Post


    Stop being obtuse. T-Mobile is a piddling carrier in the US. Apple is signed up with the major carriers in every market you mentioned.


     


    In China, Apple still lacks the largest carrier, on top of which, 3G penetration is still only 10% - 20% of the market. If you look at (i) sales as a proportion of the addressable market, and (ii) the rapidly increasing availability of 3G, China could well end up as the single biggest market for iPhones in a few years. The growth opportunities are tremendous.


     


    Let's check back in a couple of years, shall we?



     


    Maybe tmobile isn't as big as AT&T or Verizon. But calling a company with over 30 million customers 'piddling' is questionable. So is calling me obtuse.


    I totally agree on the growth opportunities China represents. I just think that the potential for Apple to grow in that market would be much bigger if either China Mobile subsidises the iphone or apple makes another less expensive one. That's all I said.

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