While Apple Inc. (NASDAQ: AAPL) has had relatively smooth going in Europe introducing the iPhone, things are apparently less so in China (and Russia) where it is being reported: China Mobile to Buy Out iPhone in China.
The negotiations between China Mobile Ltd (NYSE: CHL) have led to many compromises on the part of Apple. To get the deal done it agreed to have no more sharing from toll revenues of cooperative carriers, and the Wi-Fi function of the multimedia smartphone is to be deleted.
Although it has been widely reported the Chinese anxiously want to sell iPhones to their hundreds of millions of potential customers -- something Apple has been vigorously pursuing -- it took several rounds of negotiations after which Apple got the short end of the stick.
Just one more company bending to the will of the Chinese. I wonder how long it will be before they reverse engineer the phone using Apple as another pawn in the game of technology transfer? I wonder if there is anything that should or can be done about it?
I'm sure after all is said and done Apple got the best deal it could. I just hope it works out as well as it envisioned.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture & planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I do not own shares of AAPL.











Reader Comments (Page 1 of 1)
9-08-2008 @ 1:23PM
Luc said...
Chinese have to sign a contract with Apple and buy millions of Iphone to reverse engineering it? Couldn't they just buy one?
9-08-2008 @ 1:28PM
MikeF said...
"Just one more company bending to the will of the Chinese. I wonder how long it will be before they reverse engineer the phone using Apple as another pawn in the game of technology transfer? I wonder if there is anything that should or can be done about it?"
The iPhone is built in China, so is the ipod and most of the Macs. The Chinese have all the plans and details, what's all this "reverse engineering?" The vast majority of electronic equipment is built in Asia, many assembled from Asian built off the shelf components, the insides of the iPhone are filled with components which are present in many other devices. The uniqueness of the iPhone is the 'design' i.e how the components are put together and the software.
9-08-2008 @ 1:48PM
boris said...
Oh, sily, silly Apple...The Chinese are masters at
negotiation and bargaining with thousands of years under their belt..And how much negotiating experienc does Apple have...They are virgins who walked into a house of prostitution.
The first mistake when the CHL saw Apple salivating at the prospect of millions of customers as profits...After "reverse engineering" and soaking up all there is to know about iPhones, they will discard Apple like used toilet paper.
I was born in China, I know their inscrutable and devious ways.
9-08-2008 @ 1:51PM
Connie said...
Unbelievable! Come on Jobs, you're smarter than this! Almost makes me want to sell my Apple shares!
9-09-2008 @ 9:59AM
Zoltar said...
@Connie,
Come on Connie, can't you see the guy is clueless?
Maybe Apple has relinquished revenue sharing - and it did that wisely to every carrier except the one sit already had contracts with - but then it demanded upfront orders from them in the millions! That was commercially smart too but first and foremost ensured they would commit to promote and sell the iPhone!
So expect nothing different from any China deal.
And this blogger is clueless because he took off on the title of a rumor article that wanted to be news. There's no news there at all, it's a fabricated article with nothing to add except a manipulating title.
9-09-2008 @ 3:02PM
martin sostre said...
i call it "chickens coming home to roost." How many years have the U.S. done the same thing, and worse to the poorer countries of the world? from flooding the world with slave-produced products (cotton, tobacco,etc.) to invading countries and forcing upon them U.S. corporations and products to control their economy, for example, the Phillippines,Hawaii,Puerto Rico, South
Korea.
9-09-2008 @ 4:19PM
KenC said...
Why do you assume an unsubstantiated report is fact? It seems nonsensical to turn off Wifi. How does it affect China Mobile? Until they announce something, I take the report as bad rumor.