Apple reaches deal to bring iPhone to China Mobile

Apple and China Mobile announced a long-anticipated agreement today to bring the iPhone to the world's biggest phone company.

The deal might help to boost iPhone sales in a market where Apple Inc. Faces intense competition. The iPhone already is available in China through two smaller carriers but the latest deal links it with a bigger network and state-owned China Mobile Ltd.'s marketing power.

The iPhone is popular with Chinese customers who can afford it but it has been eclipsed by lower-priced smartphones from Samsung and local brands.

The iPhone 5S and 5C will go on sale in Apple and China Mobile stores beginning Friday, January 17. China Mobile customers can register for phones starting Wednesday.

The companies didn't announce pricing or the terms of the agreement.

The deal comes a month before China's Lunar New Year holiday in late January, a big gift-buying season. That "will provide an immediate boost to Apple's share in China," said analyst Nicole Peng of Canalys, a research firm.

Forecasts of possible increased iPhone sales under a deal with China Mobile vary widely, from 10 million to 40 million. A key issue is whether it leads to additional sales or only prompts existing users to switch to China Mobile.

The iPhone will help China Mobile promote a new fourth-generation network that received government approval this month. But analysts say Apple needed the agreement more than the Chinese carrier. That gave China Mobile leverage in negotiations over how to split costs, which for the high-priced iPhone usually includes subsidising handset sales.

The iPhone faces tough competition from cheaper smartphones running Google's Android software. Collectively, Android phones far outsell Apple's iPhone.

Apple CEO Tim Cook told the official Xinhua News Agency in January that he expects China to surpass the United States as its biggest market. About 50 million iPhones have been sold in China in the past 2 and a half years, according to analyst estimates.

China Mobile has more than 750 million mobile accounts. However, a survey by Bernstein Research said some China Mobile customers use smaller carriers for data service. Apple already has agreements with China Telecom Ltd. And China Unicom Ltd., which have about 455 million mobile accounts.

Apple's share of China's smartphone sales declined to 6.2 per cent in the third quarter from 7.9 per cent a year earlier, according to Canalys. Samsung's share expanded from 14.1 per cent to 21.2 per cent over the same period.

Post new comment

E-mail ID will not be published
CAPTCHA
This question is for testing whether you are a human visitor and to prevent automated spam submissions.

EDITORIAL OF THE DAY

  • 49 per cent FDI in defence should pave the way for modernisation

    There is one industrial sector in India that has been kept out of the purview of the normal cycle of investment and production — defence.

FC NEWSLETTER

Stay informed on our latest news!

INTERVIEWS

GV Nageswara Rao

MD & CEO, IDBI Federal Life

Timothy Moe

Goldman Sachs

Chander Mohan Sethi

CMD, Reckitt Benckiser India

COLUMNIST

Arun Nigavekar

Necessary yet inadequate boost to education

The finance minister, in the very first minutes of his ...

Zehra Naqvi

We must overcome the fear of death

It is the biggest irony that the only thing that’s ...

Dharmendra Khandal

Jawai leopards and locals can coexist peacefully

At first glance, the Jawai landscape seems like a large ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture