Apple iPhone Is Finally Headed to China Mobile
Apple is finally bringing its iconic iPhones to China Mobile and its hundreds of millions of customers next month. Pre-orders start Dec. 25 on the China Mobile Website and customer service hotline.
The companies announced Dec. 22 that they've "entered into a multi-year agreement to bring iPhone to the world's largest mobile network." China Mobile has a massive customer base of more than 760 million subscribers, many of whom Apple hopes will soon make the switch to its smartphones.
Apple will start selling the iPhone 5S and 5C to China Mobile customers Jan. 17, 2014.
"China is an extremely important market for Apple and our partnership with China Mobile presents us the opportunity to bring iPhone to the customers of the world's largest network," Apple CEO Tim Cook said in a statement.
The iPhone 5S has already been a hot seller for Apple. During its opening weekend, the company sold a combined total of 9 million iPhone 5S and 5C handsets, with analysts estimating that the pricier 5S model outsold the colorful 5C model by a ratio of three to one. The iPhone 5S features a finger print reader, a 64-bit A7 microprocessor (versus the 32-bit A6 processor in the 5C) and is available in a gold version, which has been the subject of intense demand.
Describing iPhone buyers in China as "an enthusiastic and rapidly growing group," Cook added that the Cupertino, Calif.-based device maker "can't think of a better way to welcome in the Chinese New Year than getting an iPhone into the hands of every China Mobile customer who wants one."
The news arrived a few days later than industry watchers were anticipating.
The Wall Street Journal had originally reported that China Mobile was planning to introduce the iPhone Dec. 18. As the day came and went without an announcement, Reuters reported that the carrier was still in negotiations with Apple, according to China Mobile Chairman Xi Guohua.
The talks have apparently been fruitful, if not a bit delayed. "We know there are many China Mobile customers and potential new customers who are anxiously awaiting the incredible combination of iPhone on China Mobile's leading network," Guohua said in a statement.
iPhones are currently compatible with the telecom provider's network, but are limited to relatively pokey 2G speeds. That will soon change.
Guohua said his company is "delighted that iPhone on China Mobile will support our 4G/TD-LTE and 3G/TD-SCDMA networks, providing customers with high-speed mobile service." China Mobile's network spans over "over 1.2 million 2G/GSM, 3G/TD-SCDMA, 4G/TD-LTE base stations" and is in the midst of "rolling out the world's largest 4G network," according to the companies.
Projected to be complete by the end of 2014, the rollout will encompass 340 cities with 4G service provided by over 500,000 base stations. "The collaboration between Apple and China Mobile will give a big boost to the development of China's homegrown 4G/TD-LTE technology," said the companies in press remarks.
The iPhones are pricey by China's standards, but there is still considerable interest in the country for the devices, according to Forrester Research analyst Frank Gillett. In a post on the analyst firm's blog, Gillett noted that in the fourth quarters than ended in September, Apple sold more than 16.8 million iPhones in China, and he estimates that the company will be able to sell 17 million new iPhones to China Mobile users in the first 12 months. Other estimates have been as high as 15 million to 30 million devices, he said.
"With this deal, we’ll finally find out how far Apple can get in China without offering products that match the prices of market leaders Samsung, Lenovo, and Huawei, or innovator Xiaomi," Gillett wrote, adding that if Forrester's sales estimates are correct, Apple will increase iPhone sales by more than 10 percent.
China Mobile's interest in the iPhone stems from its desire to protect its customer based from rivals China Telecom and China Unicom. For Apple, the China Mobile deal is a significant win, but it also will force the company to make some decisions, he said.
"The result [of the China Mobile deal] will be similar to Apple’s success elsewhere: The iPhone will do very well among influential and valuable customers and even a broader audience, but the iPhone won’t gain dominant share," Gillett wrote. "With the last large group of untapped iPhones customers now tapped, Apple won’t be able to dramatically expand iPhone share further without some change to pricing, subsidies, or experience."