China Mobile Chairman 'Positive' About Reaching iPhone Deal with Apple as iPhone 5S/5C Launch Nears

[MacRumors]

Reuters reports that recent talks between China Mobile and Apple have been progressing smoothly and that the two sides are positive about reaching an possible agreement, according to the company's chairman Xi Guohua. Mr Xi told Reuters that "both sides sounded keen" during recent talks, which have been ongoing since the start of 2011.

Of the three Chinese carriers, China Mobile is the only one to utilize TD-SCDMA technology, a standard developed by the company and not supported by any current iPhone model. The carrier has also been reluctant to commit to the huge cost of marketing and handset subsidies associated with the iPhone. But new chips from Qualcomm now give Apple an opportunity to support China Mobile's network in its upcoming hardware.

Apple is expected to unveil its redesigned iPhone next month and may also release a cheaper, emerging market smartphone. Crucially, it also now has Qualcomm Inc chips that can operate even on China's obscure networks. At the same time, Beijing is expected to grant 4G licenses by the year-end that favor the biggest of its domestic mobile operators.

Apple has so far ducked a deal with China Mobile as this would have required a redesign inside the iPhone to work on the operator's inferior TD-SCDMA 3G technology. For its part, China Mobile has been reluctant to commit to the huge cost of marketing and subsidizing sales of the expensive iPhone.

Beijing is looking to expand 4G networks within China by the end of the year and the licenses are expected to be based on TD-LTE technology, as supposed to the more widely-used FDD-LTE, both of which the new Qualcomm chips expected to be used in the upcoming iPhone 5C and 5S models support.

The report comes after China Mobile, the world's largest mobile network in terms of subscribers, posted healthy Q2 profits that beat the analyst expectations. Net income rose to CNY 35.2 billion ($5.8 billion) for the second quarter from CNY 34.4 billion ($5.62 billion) a year earlier, which surpassed the CNY 33.9 billion average of four analyst expectations, as reported by Bloomberg.

Although a date has yet to be confirmed by Apple, many sources confirm that new iPhone models will be announced on September 10. Recent leaks have provided strong evidence that Apple is developing a lower-cost smartphone, perhaps dubbed the "5C" for developing markets. And with chip technology now allowing Apple to more easily support China Mobile's network, the opportunity is ripe for the company to make a push on the world's largest carrier.

Article Link: China Mobile Chairman 'Positive' About Reaching iPhone Deal with Apple as iPhone 5S/5C Launch Nears

 

[sulpfiction]

Of course. It's the 5C's target market.

 

[ValSalva]

China. Hmmm, this has the potential to be a lucrative deal

 

[SteveJobsLover1]

Lower cost iPhone will cannibalize sales of more expensive iPhone. Expect sub $4 billion profit per quarter while Samsung surpasses $10 billion per quarter.

 

[TWSS37]

I can't see how even a deal with this telecom and a 5c model even would be possible given the income levels in China. Even a subsidized device for $100 would be more than what most people in China make for a few weeks worth of work.

 

[JayJayAbels]

Lower cost iPhone will cannibalize sales of more expensive iPhone. Expect sub $4 billion profit per quarter while Samsung surpasses $10 billion per quarter.

Be prepared to eat your words dude.

 

[SteveJobsLover1]

Be prepared to eat your words dude.

iPad mini and iPad.
Checkmate.

 

[shartypants]

Sounds big, and shipping will be a lot cheaper

----------

iPad mini and iPad.
Checkmate.

Also MacBook Air and MacBook Pro.
Double Checkmate. (oh wait, can't do that, ok Checkmate + pie in the face)

 

[kenetic]

Apple!

I see an opportunity there! Time to expand market share...

 

[iapplelove]

This is a "must" market for apple. Any maybe this will help the North American market not get raped by scalpers selling over seas anyway

 

[Will do good]

Lower cost iPhone will cannibalize sales of more expensive iPhone. Expect sub $4 billion profit per quarter while Samsung surpasses $10 billion per quarter.

Dream on, newbie

----------

Lower cost iPhone will cannibalize sales of more expensive iPhone. Expect sub $4 billion profit per quarter while Samsung surpasses $10 billion per quarter.

So Samsung's PR is working the MR boards now, so sad

 

[Zenb1ldr]

C is for China

Mark my words the iPhone 5C is a China exclusive device. Apple has said repeatedly that China is its next big target market. The C stands for CHINA not cheap or color but CHINA.

 

[justperry]

Mark my words the iPhone 5C is a China exclusive device. Apple has said repeatedly that China is its next big target market. The C stands for CHINA not cheap or color but CHINA.

Dream on, newbie.

^This^

 

[paul4339]

Lower cost iPhone will cannibalize sales of more expensive iPhone. Expect sub $4 billion profit per quarter while Samsung surpasses $10 billion per quarter.

I doubt it... the average selling price (ASP) for the iphone 5,4S, 4 currently sits at $580. With each release of a new iPhone the ASP of the new version is around $650.... so basically it goes down to $580 because of 4/4S sales (which averages from $450-550.

Assuming the "5C" phone is to replace the 4/4S and the 5S becomes the latest gen... the ASP will remain around $550-$580 (this is assuming a rough 1:1 ratio between 5S and 5C sales).

If you change the scenario to 2:1 ratio (where the 5C outsells the 5S) then you still get an ASP around $550. To make up for the $30 drop, they would have to sell about 5.2% more iPhones.

Even if we assume the iPhone 5C will be released at the low end ($450) AND it outsells the 5S by 2:1, it would need to raise sales by about 13.7%.

Some major assumptions, I know, but I would gamble that they will far exceed 13% (and the ASP of the 5C will probably exceed $450 as well) ... in fact, they probably have alot of forward contracts in place already that guarantees most of these sales.

.

 

[gnasher729]

Lower cost iPhone will cannibalize sales of more expensive iPhone. Expect sub $4 billion profit per quarter while Samsung surpasses $10 billion per quarter.

Lower cost iPhone will cannibalise sales of more expensive Samsung phones. Expect $10 billion profit per quarter for Apple, while Samsung profits crumble.

What's the difference between these two statements? Yours is based on the assumption that Apple is run by idiots who don't have a clue about running a business. Mine's based on the opposite. Given that Apple has over $100 bn in the bank, mine is more likely to be right.

 

[Solomani]

Oh fantastic. Now the incidents of "Chinese woman killed because a swarm of poisonous baby snakes burst out of her iPhone! Grieving relatives plan to sue Apple" will more than double because of China Mobile agreement.

 

[gnasher729]

I can't see how even a deal with this telecom and a 5c model even would be possible given the income levels in China. Even a subsidized device for $100 would be more than what most people in China make for a few weeks worth of work.

Less than a week for Foxconn employees.

 

[SteveJobsLover1]

Lower cost iPhone will cannibalise sales of more expensive Samsung phones. Expect $10 billion profit per quarter for Apple, while Samsung profits crumble.

What's the difference between these two statements? Yours is based on the assumption that Apple is run by idiots who don't have a clue about running a business. Mine's based on the opposite. Given that Apple has over $100 bn in the bank, mine is more likely to be right.

Samsung sales are fueled by the anti-Apple group, which is growing daily. They'll gladly pay full price on the newest Samsung phone to give Samsung ammunition against Apple.
People who buy Apple products don't care about quality and features. They just want a phone with an Apple logo on the back. They would gladly trade in their $600 iphone for a cheap, $200 POS from Apple.

The fact that the iPhone 4 and 4S are outselling the iPhone 5 is proof of this.

 

[paul4339]

Samsung sales are fueled by the anti-Apple group, which is growing daily. They'll gladly pay full price on the newest Samsung phone to give Samsung ammunition against Apple.
People who buy Apple products don't care about quality and features. They just want a phone with an Apple logo on the back. They would gladly trade in their $600 iphone for a cheap, $200 POS from Apple.

The fact that the iPhone 4 and 4S are outselling the iPhone 5 is proof of this.

Troll! ;-)
If people didn't care about quality and wanted POS phone with an Apple logo, why not just get a Galaxy SIII and put an Apple sticker on the back? ... then they'll be supporting Samsung and satisfy their ego at the same time...

.

 

[AppleVsAndroid]

Whatever I write is a crap

Your crap won't be heard here on the message board. Go stand outside of the Apple store and shout out to the people that buy Samdung

Guys more we reply to such Crap head, more he will dance around thinking himself great. Ignore this LOSER, yes LOSER BTW how are you taking Icahn tweet on AAPL lol

 

[SteveJobsLover1]

Troll! ;-)
If people didn't care about quality and wanted POS phone with an Apple logo, why not just get a Galaxy SIII and put an Apple sticker on the back? ... then they'll be supporting Samsung and satisfy their ego at the same time...

.

Nice try, but Samsung's phones are actually quite decent. The back "plastic" that you Applesexuals complain about doesn't really feel cheap and it's finely engineered to withstand stains and scratches. 1 year and it still looks like brand new while my cheap, tin-can aluminum from Apple is full of scratches after 3 months of use.

 

[mrhick01]

[...]

People who buy Apple products don't care about quality and features. They just want a phone with an Apple logo on the back. They would gladly trade in their $600 iphone for a cheap, $200 POS from Apple.

The fact that the iPhone 4 and 4S are outselling the iPhone 5 is proof of this.

Really? Is this "performance art" really necessary?

 

[absurdamerica]

Lower cost iPhone will cannibalize sales of more expensive iPhone. Expect sub $4 billion profit per quarter while Samsung surpasses $10 billion per quarter.

You're simply clueless aren't you? If Apple's margins drop but they sell 30 percent more devices, it doesn't matter that they're cannibalizing themselves. The other option is to let Samsung do that for them which is exactly what's been happening so far.

You cite the iPad Mini and iPad as proof but fail to recognize that money in is money in.

You would have advised BMW against buying Mini since high end Mini buyers would then not buy a 3 Series, which is silly since Mini captured a huge swath of the market away from other less interesting cars.

 

[TWSS37]

Less than a week for Foxconn employees.

When you work 70 hours a week, who has time to use a phone?

http://appleinsider.com/articles/13...pplier-foxconn-still-exceeding-work-hour-laws

 

[SteveJobsLover1]

You're simply clueless aren't you? If Apple's margins drop but they sell 30 percent more devices, it doesn't matter that they're cannibalizing themselves. The other option is to let Samsung do that for them which is exactly what's been happening so far.

You cite the iPad Mini and iPad as proof but fail to recognize that money in is money in.

You would have advised BMW against buying Mini since high end Mini buyers would then not buy a 3 Series, which is silly since Mini captured a huge swath of the market away from other less interesting cars.

Do you not know what cannibalization means?
They'll sell a lot of cheap, low-margin 5Cs, but the sales of their high-margin 5S will drop like hell.