Apple would love to sell the iPhone to China Mobile’s 628 million subscribers, but there is a hitch to any agreement: the carrier wants a piece of the App Store pie. But a pact isn’t needed, argues one Wall Street watcher, especially since there are already 10 million Apple smartphones on the China network.
In what has become a slow-motion negotiation session, talks may have reached the molasses stage upon hearing China Mobile wants a cut of App Store revenue, a bargaining point the tech giant has never given any of its global carriers. We now see why there is little real reason for Apple to ink any deals: Sterne Agee analyst Shaw Wu tells investors China Mobile has been signing up million of iPhone owners, anyway.
“What many customers are doing is buying unlocked, unsubsidized iPhones in the black and gray markets, as well as directly from Apple,” writes the analyst. Although Apple doesn’t support the home-brewed TD-SCDMA 3G network, China Mobile is enticing iPhone users, offering gift cards for free Wi-Fi service. No 3G? No worries. Seems the current 2G network is just fine.
Turns out, the iPhone is also a big hit in Taiwan and Hong Kong, even further slowing Apple’s roll toward any sudden China Mobile pact.
So, if Apple isn’t steaming toward an actual agreement with China Mobile and there is no slated TD-SCDMA-compatible iPhone in the works, what’s the Cupertino, Calif. company up to? “Effort is being focused on developing 4G TD-LTE models,” Wu writes. Apparently, a China Mobile agreement could coincide with a 4G LTE network.