China Mobile-Apple iPhone pact 'very big deal'
World's largest carrier -- over 700M subscribers -- offers huge opportunity for Apple
Computerworld - China Mobile, the world's largest mobile carrier, has finally inked a deal with Apple to sell the iPhone, according to a report by the Wall Street Journal.
On Wednesday, the newspaper (subscription required) cited anonymous sources who said China Mobile, which boasts an estimated 740 million subscribers, will announce iPhone availability later this month, most likely at China Mobile's conference, which begins Dec. 18.
China Mobile is one of the world's few major mobile carriers that has not sold the iPhone. Investors have been waiting years for the China Mobile deal, believing it would significantly increase iPhone sales in the country and boost Apple's stock price.
In early trading Thursday, Apple was up 1.4% to $572.67.
The Wall Street Journal's report follows news yesterday that the Chinese government had issued 4G licenses to China Mobile and other carriers, including China Unicom and China Telecom, both which sell the iPhone. Previously, China Mobile had said it would deal the iPhone only when it could offer it on the faster network.
Earlier this year, Apple's iPhone was granted a license from government authorities to operate on the 4G network protocol China Mobile will use.
"This is a very big deal," said Ben Thompson, an independent analyst based in Taiwan who covers technology on his Stratechery website. "The two pertinent facts about China are that there is tremendous income disparity, and there are a ton of people. So while many Western markets may have a greater percentage of the population that can afford an iPhone, the absolute number of Chinese who are potential customers is very high as well."
In the third quarter, the most recently reported by Apple, China was the firm's third-largest market, after the Americas and Europe, with $5.7 billion in revenue, up 6% year-over-year. For the 2013 fiscal year, which ended in September, the Greater China region -- China, Hong Kong and Taiwan -- generated $25.4 billion in revenue, up 13% from the year before and representing 15% of the company's worldwide total.
But while a China Mobile deal has huge potential for Apple, its iPhone currently has a much smaller share there than just a few years ago, as cheaper Android phones, most of them made by in-country firms, have captured the bulk of the market.
The iPhone 5C, a less-expensive sibling to the flagship iPhone 5S, was expected by some analysts to come in price points competitive with Chinese-made Android smartphones. Instead, Apple stuck to its premium-brand strategy.
Even so, researchers believe that Apple will boost market share and rake in revenue from an expansion in the country. "Thanks to its cooperation with China Mobile and the launch of low-cost iPhone, iOS will see a rapid growth in 2014, and ... its market share [in China will] double that of 2013," market research firm IDC forecast in September.
Apple has paid more attention to China this year, launching the new iPhones in that market in its initial wave for the first time. According to researcher Canalys, the move paid off, as Apple returned to the top-five smartphone maker list in the third quarter.
But when the iPhone debuts on China Mobile, it's inevitable that questions will remain about Apple's ability to grow its share, whether there or globally, said Thompson.
"For several years now any questions about Apple's growth prospects have had a simple answer: just wait until they add NTT Docomo and especially China Mobile," Thompson wrote. "Well, they now have, and the only way forward for significant iPhone growth is the long slog of winning new customers. I certainly think Apple is up to it, but there are no more home runs."
Apple added NTT Docomo, Japan's largest mobile provider with an estimated 61 million customers, to its list of iPhone sellers in September.
Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, or subscribe to Gregg's RSS feed . His email address is email@example.com.>
- Apple's CarPlay vs. MirrorLink: Is there a need for both?
- Apple's CarPlay to spark mobile apps war in your car
- iTunes is almost as big a biz as OEM Windows
- Icahn says 'I can't' and stops $50B fight over Apple stock buyback
- Lenovo-Moto deal's impact on Apple? Zip
- Office 365 turns one, but success is tough to tally
- Everyone bets on bigger iPhone for '14
- Apple's iPod business collapses as revenue becomes a rounding error
- Update: More than 1B smartphones were shipped in 2013
- Cook admits Apple blew the call on the iPhone 5C
Read more about Mobile/Wireless in Computerworld's Mobile/Wireless Topic Center.
- 15 Non-Certified IT Skills Growing in Demand
- How 19 Tech Titans Target Healthcare
- Twitter Suffering From Growing Pains (and Facebook Comparisons)
- Agile Comes to Data Integration
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
- The Critical Role of Support in Your Enterprise Mobility Management Strategy Most business leaders underestimate the importance of tech support when they choose an EMM solution. Here's what to put on your checklist.
- Separating Work and Personal at the Platform Level: How BlackBerry Balance Works BlackBerry® Balance™ separates work from personal on the same mobile device, right at a platform level. Find out how it can work for...
- Protection for Every Enterprise: How BlackBerry Security Works Get an IT-level review of BlackBerry® Security, addressing data leakage protection, certified encryption, containerization and much more.
- Future Focus: What's Coming in Enterprise Mobility Management (EMM) Find out why Enterprise Mobility Management (EMM) solutions that are truly future-ready must be designed to enable Machine-to-Machine (M2M) capabilities and much more.
- Live Webcast On-demand webinar: "Mobility Mayhem: Balancing BYOD with Enterprise Security" Check out this on-demand webinar to hear Sophos senior security expert John Shier deep dive into how BYOD impacts your enterprise security strategy...
- Live Webcast Unmasking the Differences between Consumer and Enterprise File Sync & Share The consumerization of IT combined with the rapid pace of the modern mobile workplace is forcing enterprise IT teams to evaluate file sync...
- Live Webcast Workforce Mobilization for Improved Productivity A mobility research director from Aberdeen discusses reasons for extending legacy applications to mobile devices, and an integration strategist from Attachmate shows how...
- Getting Ready for BlackBerry Enterprise Service 10.2 Find out how BlackBerry® Enterprise Service 10 helps organizations address the full spectrum of EMM challenges, while balancing the needs of both the...
- Containerization Options: How to Choose the Best DLP Solution for Your Organization This webcast outlines a framework for making the right choice when it comes to containerization approaches, along with the pros and cons of... All Mobile/Wireless White Papers | Webcasts