China Mobile Has No News on the iPhone, Yet

 
 
By Michelle Maisto  |  Posted 2013-12-19 Email Print this article Print
 
 
 
 
 
 
 

Dec. 18 passed without China Mobile's expected announcement that it would sell Apple's iPhones. Various parties say the deal will come, eventually.

China Mobile was expected to announce, on Dec. 18, that it would soon sell Apple iPhones. But the day came and went without a word from either party.

With more than 759 million subscribers (in contrast to Verizon Wireless' 101.2 million subscribers), China Mobile is the world's largest carrier. But it has yet to officially sell the iconic smartphone, which its network has been incompatible with. (Several million iPhones have been attached to the network by subscribers, but they're only able to operate at 2G speeds.) With China Mobile's Long Term Evolution (LTE) network rollout under way, however, and updated technology in the iPhone 5S and 5C, all that is expected to change.

The Wall Street Journal reported Nov. 21 that China Mobile planned to introduce a new brand for mobile services this past Wednesday.

But on Wednesday afternoon, on the sidelines of a conference in China, China Mobile Chairman Xi Guohua told reporters that his company had no announcement to make, but that the carrier is still in talks with Apple to sell the iPhone, Reuters reported the same day.

Analyst Ben Reitzes, with investment firm Barclays, called the pending announcement "overhyped" in a Dec. 18 report to investors, but his larger message was to be patient.

 "We have expected a deal to have a gradual phase-in period yielding million of units in channel fill in [the first half of 2014], which still seems quite likely at this point," Reitzes wrote, according to Barron's, which saw a copy of the report.

"Even with today's lack of announcement," Reitzes continued, Apple may be one of the few companies in our space to grow in China in its fiscal 2014 and this still seems to be achievable without China Mobile."

However, within China Mobile, he added, citing a colleague's research, Apple's addressable market could be approximately 80 million units.

China Mobile's Xi, speaking at the conference, said the carrier intends to sell between 190 million and 220 million handsets in 2014, as well as to "step up subsidies to cover the cost of handset sales," after spending approximately $4.5 billion in 2013, Reuters reported.

China is an increasingly critical market for Apple—the company expects it to eventually replace the United States as its largest revenue generator. When it introduced the iPhone 5S and 5C in September, it made an announcement in China the same day, a first for the company.

Still another first was the decision to launch the iPhone 5S and 5C to China September 20—the same day the phones arrived in the United States and a handful of other key markets.

Long before the introduction of the iPhone 5C, the industry anticipated that Apple would introduce a less costly model for markets such as China. The cost of the unsubsidized 5C, however, was still out of reach for many Chinese consumers—who reportedly also found the look of its hole-punched rubber case to be ridiculous.

China Daily reported Sept. 11 that the starting price for a 5C in China is $728, and $858 for the 5S. In an online poll, said the report, 90 percent of respondents said the new iPhones were too expensive and they had no interest in them.

A report the same day from Tech In Asia said that a circulating joke was that the case for the 5C "looks like a potato peeler."

 
 
 
 
 
 
 
 
 
 
 

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