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TMCNet:  Apple 'signs iPhone agreement with China Mobile'

[December 05, 2013]

Apple 'signs iPhone agreement with China Mobile'

(Guardian (UK) Via Acquire Media NewsEdge) Apple has reportedly signed a deal to sell iPhones on the world's largest mobile phone network, China Mobile, in a move that could dramatically expand its sales.

According to the Wall Street Journal, the long-expected tie-up will be unveiled in two weeks' time and will for the first time make the US firm's phones available on the gigantic network, which has 760 million subscribers, of whom 176 million have 3G connection.

The iPhone will initially only be sold for 4G/LTE connectivity, the reports suggest, as part of the unveiling by the mobile carrier of its new faster connections on 18 December. The Chinese government issued 4G licences this week, and China Mobile is thought to be poised to take a lead over its two smaller rivals, China Telecom and China Unicom, who together have half as many subscribers as the giant company.

In the past year Tim Cook, Apple's chief executive, has made multiple visits to China, where he has met China Mobile bosses, and the inclusion of the 4G service used by China Mobile in the newest iPhone 5C and 5S is seen as key to compatibility with the giant's network.

The move would give Apple a potential customer base three times bigger than the entire US mobile population. That could have a dramatic effect on its handset sales: its share of the overall smartphone market has fallen as that business has grown - though it has still managed to increase sales year-on-year.

Financial analysts estimate that Apple could sell between 10m and 17m extra iPhones in the first year of a deal with China Mobile, generating nearly $9bn in extra revenue. In the past four quarters it has sold 150m iPhones.

China is a key market for Apple because its buyers value premium western brands, and on average, owners replace their smartphones every 13 months, though the replacement cycle is longer on China Mobile. In Apple's most recent financial quarter, revenues from Greater China totalled $5.7bn, or 15% of its total.

(c) 2013 Guardian Newspapers Limited.

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