Apple, China Mobile reportedly close to a deal
Apple is close to signing a deal to distribute iPhones through China Mobile, a deal that would give the company access to as many as 700 million potential new customers in the world’s most populous country.
"We are still negotiating with Apple, but for now we have nothing new to announce," China Mobile spokeswoman Rainie Lei said, according to Reuters. Apple also declined comment.
For Apple, the deal would provide a dramatic inroad into a market in which it has had trouble establishing a foothold. The company began selling iPhones through China Unicom—the country’s second-largest carrier—only in 2009, and sales were initially slow: Just 100,000 units in the first month, compared to millions in other markets where the phone launched.
Still, as we reported last month, China grew from 2 percent of Apple’s total earnings to 12 percent, although that growth has slowed a bit in 2013. Observers had expected Apple’s most recent generation of iPhones to include a “cheap” iPhone aimed at growing the Chinese market more dramatically. The iPhone 5c, while less expensive than the top-of-the-line 5s, didn't really fill that bill.
Apple and China Mobile have negotiated for years, but final completion of a deal would be a boon to the Cupertino company. “That single-handedly, we estimate, would drive 20 percent higher iPhone sales next year,” Brian Marshall, an analyst with ISI told Macworld.
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