Apple Signs Deal To Sell iPhones Through China Mobile

Apple has finally signed a deal with China Mobile, to sell iPhones in China. The deal had been long expected, and should help Apple out in a fast-growing market where even massive success has left it lagging behind its competitors.

China Mobile customers will be able to buy iPhones from January 17 and can register their interest from Christmas Day, December 25, but prices have not yet been announced. The giant state-owned operator has about 760 million subscribers, and Apple will be hoping a reasonable percentage will plump for iPhone 5C and iPhone 5S devices.

State-backed iPhones

Mobile phones in China are surging in popularity, and Apple devices are available on all the other mobile networks. Indeed, the iPhone 5S has had a great launch there, making up 12 percent of smartphone sales in October, according to reports.

China Mobile is a big coup because it has the best coverage across the world’s largest nation – reaching some 97 percent of the Chinese population.  Without that, Apple has not cashed in on China’s mobile boom. In the third quarter, its shipments there grew by 32 percent – which sounds impressive, but Reuters reports that Lenovo grew by 64 percent.  

The government-run operator has not sold iPhones because they are not compatible with its chosen 3G technology, TD-SCDMA. This has undoubtedly held Apple back, although China Mobile estimates that around  45 million customers are already using  iPhones on its service – even though they can only get very slow 2G data speeds. 

Years of negotiation hasn’t removed that roadblock, but the arrival of 4G has eased things. The state regulator has given China Mobile a 4G licence, along with China Unicom and China Telecom, using the internationally-compatible TD-LTE standard.

As a result, estimates of Apple’s potential sales range from 17 million to 20 million in the first year.

Apple isn’t alone in wanting a share of the lucrative business. European network vendors Ericsson, Alcatel Lucent and Nokia have grabbed a third of the £2 billion contract to build those 4G networks for China Mobile, sharing it with local providers Huawei and ZTE.

The development of local markets is a strategy by China, which has become the leading place to have devices – including Apple’s iPhone – made cheaply, although sometimes in conditions which are criticised by labour organisations.

Tim Cook, CEO of Apple’s statement was a somewhat low-key whoop:  “Apple has enormous respect for China Mobile and we are excited to begin working together. iPhone customers in China are an enthusiastic and rapidly growing group.”

Do we have a quiz about China? Of course we do!