Yesterday, it was reported that China’s second largest carrier, China Telecom, will start offering the iPhone 4S on March 9th. Rumors of Apple offering the iPhone on the largest mobile carrier in the world, China Mobile, has been all over the place. Now, according to Reuters, China Mobile officials are “aggressively negotiating” a deal with Apple, but due to a technical limitation the offering remains a roadblock. China Mobile uses a non-standard unique 3G wireless technology, which is causing the roadblock. The network uses their own 3G technology called TD-SCDMA, which is a technology Apple doesn’t currently support on its iPhones.
With over 600 million subscribers, China Mobile is the largest mobile carrier in the world, which means there is a significant opportunity for Apple. That compares to the 117 million total subscribers at China Telecom, which was announced as a new official iPhone carrier yesterday.
Just to put the opportunity in perspective, the total number of mobile subscribers in China are expected to pass 1 billion this year alone! Last quarter, Tim Cook described China’s demand for the company’s products, particularly the iPhone, as “staggering.”
Last week, it was reported that Apple had once again become the world’s largest smartphone maker. Turns out this was due to the fact that Apple sold 37 million iPhones last quarter alone! Now, Morgan Stanley believes that Apple will partner up with both China Telecom and China Mobile “over the next year” to make its iPhone available on all three Chinese carriers. That may not sound amazing, but what does is the fact that Morgan Stanley believes that the company will be able to sell up to 40M iPhones in China alone in the next calendar year. This means that Apple could soon sell as many iPhones in China as it sells in the rest of the world combined!
Remember, Apple sold 37 million iPhones last quarter worldwide, but this estimate is for one country alone. Analyst Katy Huberty suggested the huge untapped potential for the iPhone in China. According to her, Apple can only possibly reach 10 percent of the 150 million “high-end Chinese subscribers” in the country through its current partnership with China Unicom. Last year, Tim Cook said that Apple was only “scratching the surface” in China. She says that she sees a base case of 26 million incremental iPhone sales in China during the 2013 calendar year with the addition of China Mobile and China Telecom. Her bull case suggests 40 million units for an increase of $10 in earnings per share.
The analyst also suggests that if Apple sees a 20 percent penetration of China Mobile’s subscribers as the company has reached with China Unicom, the iPhone maker would be able to sell 24 million handsets on China Mobile alone next year. Due to the fact that 3G and smartphone penetration in China is “increasing at a fast clip” she believes that the company could sell as many as 36 million units on China Mobile in 2013.
In China, China Mobile is the world’s largest carrier, and offers service to an estimated 120 million high-end subscribers who pay more than 100RMB ($16) a month. The final 10 percent of high-end subscribers are on China Telecom, the third-largest carrier in China.
I’m trying to think of another company that is expected to sell as many phones in China as it sells in the rest of the world combined. Anyone?
In the past, rumors have suggested that Apple was working on making the iPhone available to China Mobile customers. Now, a new report from CapitalVue suggests that Apple has finally closed a deal with China Mobile to launch the iPhone on their network. China Mobile currently has over 600 million customers making it the world’s largest mobile carrier.
The source of the rumor is uncertain since the report indicated to “a company filing” picked up by Chinese-language site ccidcom.com. MacRumors auto translated the article and reports that the report came from the Associated Press. They have been unable to locate such an article.
If ccidcom.com’s report does prove to be true, it suggests that China Mobile will announce the iPhone 4 in October, and then later will be followed by the iPhone 5 and future 4G LTE models based on the carrier’s homegrown TD-LTE standard.
In China, Apple currently offers the iPhone through China Unicom, but has been rumored many times to be trying to strike a deal with China Telecom. Clearly, Apple is getting ready to make the Chinese market a priority and is working on trying convince all of the country’s top carriers to offer the iPhone.
MyDrivers.com has published an image of an iPhone running on China Mobile’s 3G network. The English translation of their article can be read here.
In the picture above, there’s a China Mobile 3G logo in the upper right corner. The phone appears to be running baseband software with version number 06.10.01, which hasn’t been released yet. In addition, it also doesn’t have an IMEI number just like the iPhone 4 prototype. Usually evaluation devices have no IMEI number. MacRumors points out that…
The third digit, a 0, suggests the phone was made in 2010. The next digit, which appears to be a 5, would have the phone manufactured towards the end of that year, in either the 50th, 51st or 52nd week.
Also, the carrier name in the top left corner appears to be China Mobile, written in Chinese text which suggests that a China Mobile compatible iPhone is coming to China Mobile’s 3G network soon. In addition, Apple COO Tim Cook was reportedly spotted at China Mobile’s headquarters. Apple and China Mobile have been rumored to be working together to ensure future iPhones are compatible with China Mobile’s upcoming 4G TD-LTE network.
Also, Shanghai Daily reports the carrier already had 5.6 million iPhone users on its 2G network as of the end of May, with 700,000 of those having been added during that month alone.