An Apple store in Hong Kong. (Photo/Emily Chen)
China Mobile, the world's largest telecom carrier by subscriber numbers, and Apple are likely to work together on Apple's next generation of low-cost iPhones, reports Shanghai's First Financial Daily.
According to foreign media reports, Apple may adopt Qualcomm's chipset with the TD-SCDMA that supports China Mobile's system for its next handheld device — removing previous obstacles in the path of working with the Chinese telecom giant. The two companies had previously failed to reach an agreement because the chipset Apple was using did not support China Mobile's wireless mode.
The iPhone 5S with a suggested retail price of 5,599 yuan (US$915) and iPhone 5C for 3,399 yuan (US$555) are scheduled to be rolled out in China on Nov. 28. The Chinese launch date is scheduled two months after the official global launch because the device has yet to pass a verification procedure conducted by the country's Ministry of Industry and Information Technology.
Kuo Mingchi, an analyst at KGI Securities, predicted that China Mobile's version of the iPhone 5S and iPhone 5C would account for 25% and 35%, respectively, of the total shipments, which would stimulate the supply chain.
An overseas tech website reported that suppliers had begun to ship to Apple's retail channels. A spokesperson from Apple's contract manufacturer Foxconn confirmed that Apple's supply chain had started shipping the devices and that plants were recruiting to process the shipments, the paper said.
When rival China Unicom's version of the iPhone 3GS was introduced in 2009, the market was abuzz with speculation that China Mobile and Apple had entered into negotiations. However, the two sides were unable to reach an agreement.
Based on a speech delivered by China Mobile chairman Xi Guohua and Apple CEO Tim Cook during his recent visit to China, insiders began to speculate that the two sides would announce a deal soon. Last week, Xi said that negotiations between the two companies had gone very well, adding that they would indeed team up. It is expected that the next iPhone will support both China Unicom's and China Mobile's standards.
Meanwhile, Apple has made concessions in subsidizing its service plans. Yan Zhanmeng, a senior analyst at IDC, told the paper that shipments for smartphones running on Apple's iOS platform were projected to be lackluster in China during the middle of the year due to growing competition and shrinking subsidies from operators.
IDC figures showed that Apple's market share last year dropped to 21.8% from 23% a year ago, trailing Samsung, which topped the global smartphone market with a 29% market share last year, up from 22.5% from 2011. It is therefore critical for Apple to collaborate with China's largest telecom operator, the paper said.