Does China Mobile want the iPhone?

Posted Nov 13th 2007 4:37AM by Douglas McIntyre
Filed under: Deals, Consumer Experience, Apple Inc (AAPL), China, iPhone, China Mobile Limited (CHL)

The head of China Mobile (NYSE: CHL), by far the largest cellular carrier in the world, indicated that he is talking with Apple (NASDAQ: AAPL) about marketing the iPhone. MarketWatch reports that the two companies "would have to iron out differences over revenue sharing."

China Mobile currently has about 350 million subscribers, so a deal with Apple could boost the consumer electronics company's stock to even higher levels than its recent record peak. But a deal with China Mobile might bear very different results from those in the U.S. and Europe.

With the iPhone priced at just below $400, it may be an item that users in the West can afford. It remains to be seen whether the expensive handset's appeal would be strong in China. But there is a large middle class in the country, and that could drive demand.

Apple will open its first retail store in China soon. It does have modest sales for iPods and Macs there. One of the things that could undercut the company's effort to sell iPhones is that counterfeiters have already created their own versions, which are much less expensive than the real thing.

But, knowing Apple, the financial onus for selling the handset will be on China Mobile, with the U.S. company getting a cut of the calling plan revenue. So Apple has very little to lose.

Douglas A. McIntyre is an editor at 247wallst.com.

Tags: AAPL, Apple, China Mobile, ChinaMobile, CHL, iPhone, iPod, Mac

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Reader Comments (Page 1 of 1)

11-14-2007 @ 7:53AM

wayne said...

I have invested over $300,000 dollars in china mobile.Do you think this was wise

11-13-2007 @ 7:55AM

Jamar said...

"So, Apple has very little to lose."

Hardly. Here in China unlocked and jailbroken iPhones are sold almost everywhere that sells phones. They're apparently the hot new thing, even though they cost more than iPhones in the US (about $450-600, depending on where you go and how your haggling skills are). China Mobile still makes money off of users of these phones (well, maybe Unicom depending on personal preference). Apple does not. I'd say that China Mobile is in the position of power here.

Oh, and if they tried selling iPhones with that stupid activation requirement, they'd absolutely flop. Unless the price is on the scale of one of those cheap counterfeits, people here will pay more for less hassle.