China Mobile, as part of a deal that’s been anticipated for years, will begin selling the Apple iPhone 5S and iPhone 5C Jan. 17. Since the iPhones became available for preorder Dec. 25, the carrier has received orders for 1.2 million iPhones, CNBC reported Jan. 15.
“It’s a watershed day for Apple. It’s a huge announcement,” Apple CEO Tim Cook, sitting beside China Mobile Chairman Xi Guohua, said during a CNBC interview that aired Jan. 15.
China Mobile has 760 million customers, making it by far the largest carrier in China—now the world’s leading smartphone market—and the world. (Verizon Wireless has just over 290 million customers.)
“We see this as bringing the world’s best smartphone to the very largest and now the fastest network in China,” Cook said.
While Apple hasn’t shared exact sales numbers, he continued, “We sold more iPhone units last quarter in Greater China than ever before. So we see that momentum, and the announcement with China Mobile today, as being able to continue the momentum that we’ve really been building for the last three or four years or so in China. It is a very key market for us.”
Apple defines Greater China as Mainland China, Hong Kong and Taiwan. Cook has previously said that he anticipates that Greater China will eventually overtake the United States as Apple’s top revenue-generating market.
When asked about reports that Apple could sell between 10 million and 30 million iPhones to China Mobile this year alone, Cook declined to touch the numbers.
“I see this announcement today as being one of those very key milestones in doing great stuff over the long term for our customers and our shareholders and our employees,” he answered.
Xi, however, was less shy about talking numbers.
“Since Dec. 23, when people didn’t know the pricing,” he said through an interpreter, “we’ve had millions of preorders. This is very encouraging.”
China Mobile Deal Long-Time Coming
A large part of what had prevented Apple from taking advantage of China Mobile’s tremendous network sooner was the carrier’s network, which was incompatible with the iPhone. It has very recently made a transition to a 4G TD-LTE.
Ericsson announced in November that it had been selected by China Mobile to deploy the technology in 15 key provinces, covering 63 percent of China’s population, including the top three provinces in terms of gross domestic product, and that the deployment was already underway.
On Jan. 14, emphasizing the progress of China Mobile’s new LTE network, Ericsson announced that the pair had successfully demonstrated the world’s first handover of a voice over LTE (VoLTE) call to a 2G or 3G network.
“This paves the way for the future commercial deployment of VoLTE by China Mobile and underscores the maturity of the VoLTE solution for LTE TDD,” said Ericsson.
U.S. carriers are expected to begin supporting VoLTE—which lets voice calls and data travel together over LTE, opening up the potential for new services—and offering VoLTE-capable devices this year. (MetroPCS deployed VoLTE in 2012, to make better use of its spectrum and improve support for subscribers’ voice calls.)
Pricing has been another issue for Apple, as the high-end company works to penetrate a market where midtier offerings have had the greatest success. The iPhone 5C, which wasn’t priced as low as many anticipated, received a cool reception.
Xi acknowledged that because China Mobile’s deal with Apple is new, its pricing is higher than its competitors’. “But I still believe it’s very attractive,” he told CNBC.
The Wall Street Journal reported Jan. 14 that Apple supplier Foxconn has shipped approximately 1.4 million iPhones to China Mobile. A source told the Journal that it’s unclear, however, what the numbers will be in the future.
“We have limited visibility beyond this month, as Apple hasn’t informed Foxconn of the volume for the next shipment to China Mobile,” said the Journal’s source.