Earlier today, China released its iPhone 5. However, being the world's biggest smartphone market, Apple (News - Alert), Inc.’s long-term hopes may depend on new technology being tested by China's top telecoms carrier. For four years, California-based Apple, Cupertino, has been in talks about a tie-up with China Mobile.
To improve Apple's distribution in a market of 290 million users, forecasted to double this year, a deal with China's biggest carrier is seen as crucial step forward.
Bringing in around 15 percent of total revenue, Apple's second-largest and fastest-growing market is China. This clearly means the company is missing out on a large number of phone users, should it fail to strike a deal with China Mobile (News - Alert).
Although Apple's sales increase as the China pie grows, however, compared to other brands, it will lose ground at a faster rate without China Mobile.
"In absolute terms, this (iPhone (News - Alert) 5) launch will certainly result in strong sales for Apple in China. However, in relative terms, I don't believe it will move the needle enough in market share," said Shiv Putcha, a global technology consultant and a Mumbai-based analyst at Ovum (News - Alert).
Earlier today, in Shanghai's financial district, just one person was waiting outside the Apple store when its doors opened at 9 a.m., but earlier this year, with the launch of the iPhone 4, rowdy crowds pelted a Beijing store with eggs.
Initially, China Mobile and Apple said the only thing that separated it was a technical issue. The Chinese carrier runs a different 3G network from most of the world, however, and has evolved into a broader and more complex issue of revenue-sharing.
Li Yue, CEO for China Mobile, stated that many issues – such as the business model, articles of cooperation and revenue division – have to be resolved between China Mobile and Apple and it anticipates reaching an agreement soon.
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