China Mobile says no to iPhone

Stephen Withers
Monday, 14 January 2008 23:56

Your IT - Mobility

Talks between Apple and China Mobile over the official introduction of the iPhone to China have been terminated.

When news of the discussions broke last November, some commentators immediately suggested that Apple's favoured revenue-sharing model would be a sticking point. While a China Mobile spokesperson has confirmed that talks between the companies are off, no explanation was given.

A report on Sina.com citing an source within the company asserted that revenue sharing was indeed the obstacle.

The possibility of reopening negotiations was not ruled out by the China Mobile spokesperson.

With a market share of 70 percent, China Mobile is in a strong bargaining position. There's only one other mobile carrier at present - China Unicom - but according to some reports its future is uncertain, with the possibility of it becoming a part of one of the fixed-line carriers.

Landline carrier China Telecom has its eye on mobile operations through a 3G licence, but that is likely to involve a Chinese-developed technology. Despite the size of the China market, Apple's international focus would seem to rule out such a country-specific version of the iPhone. Furthermore, it is unclear when the Chinese government will begin issuing 3G licences.

While Apple has stated it will start selling the iPhone in Asia this year, there have been no official comments about which countries will see the handset or what the timetable will be - hardly surprising, given the uncertainty introduced by the need to negotiate with carriers.

iPhone sales have been strong in the US, but there have been suggestions that things are not going so well for Apple in Europe (especially the UK) where consumers are used to getting high-end phones at lower prices with mobile service contracts.