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% in the third quarter from 7.9% a year earlier, according to Canalys. Samsung's share expanded from 14.1% to 21.2% over the same period.