Talks between Apple and China Mobile squelched... or are they?

Barely a fortnight after Apple began talking with China Mobile about getting the iPhone into the ginormous Chinese market, it seems that negotiations are off -- or still on, or something. Yesterday, Nanfang Daily reported that China Mobile's CEO felt that the "iPhone model was not suitable for China," but unnamed reporters suggested that the real reason behind the call-off was the inability for both entities to agree on -- surprise, surprise -- a revenue sharing model. Today, however, a report over at Bloomberg notes that Apple has in fact not ended discussions with China Mobile, and moreover, it was said to have "denied newspaper reports" claiming otherwise. 'Course, we've got two sides of the story here, and while Apple may feel that there's still room to negotiate, China Mobile may see things quite differently. Time will tell, we guess.

[Via Macworld]
Read - Nanfang Daily report
Read - Bloomberg report

[Ireland @ Nov 30th 2007 8:15PM]

Wow, slow news day. We think this, we think that. You decide with no real evidence, lol.

[BenRich @ Nov 30th 2007 11:41PM]

I guess the Chinese will have to stick with the virtual iphone http://vphone.red-rome.com too bad it only comes in English.

[Tonja @ Dec 1st 2007 1:42AM]

Well, i think it is all a waste of time.. there are so many superior phones coming out of China these days... by the time it does come out, they will have to cut its price in half to stay competitive.

Several new models have the "shake" control function... The DigitalRise D99i and The D69i are hot in Asia right now.. Check out the YouTube Vid:

http://www.chinagrabber.com/index.asp?PageAction=VIEWPROD&ProdID=1403

BR

[crow610 @ Dec 1st 2007 1:59PM]

They claim it's better the the iPhone.
1GB storage ?
Movie stops when rotating?
Will songs change while you are running?

[Carlos @ Nov 30th 2007 8:25PM]

I wonder what the real market is for a $500 smart phone in China - I know there are a lot of people in China but how many can afford this phone?

[Tony @ Nov 30th 2007 9:08PM]

Probably a lot more people than here. Are you suggesting Chinese people are poor?

[Carlos @ Nov 30th 2007 10:19PM]

Yes thats exactly what I am suggesting - its a known fact that people make less money in China - average annual income per person in the US is $40k where the average income in China is $1k. Its also a fact that about 150 million people in China live on less than $1 a day.

So while there may be a huge population in China only a fraction of that population would be in the market for a luxury item such as an iPhone.

[Alberto @ Nov 30th 2007 10:36PM]

I remember reading an article recently about the huge gray market for iPhones in China. It's become a status symbol there.

[IndiaTech @ Nov 30th 2007 11:50PM]

@ Tony...

Nopes. But they have Meizu :)

[Ricck @ Dec 1st 2007 2:30AM]

Trust me.. In China we have more than 400 million wireless subscribers. At least a third of them own a phone that costs more than 500$, and about one fourth of them are planning to replace their old phones in the following three to four years

[jilie @ Nov 30th 2007 8:25PM]

WOW! THE IPHONE!

[Delvis343 @ Nov 30th 2007 8:33PM]

Apple should be pushing harder to get their product into China, there is a huge market there.

[Barry @ Nov 30th 2007 8:34PM]

Probably only 0.01 percent of the population of China is in the market for an iPhone.

Of course, that's 13 million people, and Apple says they're only hoping to sell 10 million iPhones. So yeah, it's worth it to go into China.

[Jake @ Nov 30th 2007 9:06PM]

Too bad they already have the miniOne...
I have no clue why they would want this. The miniOne has a truckload more features than the iPhone does anyways.
Oddly enough, Firefox doesn't recognize the word "iPhone" as spelled correctly. Oh well.

[Tony @ Nov 30th 2007 9:10PM]

What's odd about it? It checks for improperly spelled words.

iPhone is not a word.

[The Grand Master @ Nov 30th 2007 9:22PM]

Incase you hadn't noticed the M8/MiniOne doesn't actually exist yet...

[Jamar @ Nov 30th 2007 9:10PM]

China Mobile has the upper hand in this negotiation. With the iPhone market as it is in China they're still getting revenue from iPhone users while Apple's getting nothing. If China Mobile's not happy with Apple's revenue sharing plans, then they can just push the whole thing out of the way and let the free market do the work.

[3rdsun @ Nov 30th 2007 9:19PM]

The Chinese have plenty iphone and other top notch knockoffs. Apple is not gonna succeed in a market where photocopiers are always running

[benjasmine @ Nov 30th 2007 9:19PM]

In China, there are no such thing as 1 year or 2 year contracts, or revenue sharing with mobile phone operators. That is the rule in Chinese market, and I don't think iPhone will get any special treatments on this. Apple will have to follow the China's rule, which I like. But, Chinese are willing to spend lots of money on a phone, especially the young generation who are in their 20s, 30s. A $500 phone is considered pretty cheap over there, even tho that's like how much they make every month. Chinese market is huge and definitely will help Apple's goal of selling 10 million phones by the end of 2008.

[ray @ Dec 1st 2007 9:28AM]

true, locked phone doesn't work for China, and there is no need to release iphone there, coz it's already all over the places, they prob have more resellers than the no. of Apple stores in the US. that's why there is no official PSP in China.

[David @ Nov 30th 2007 10:51PM]

Remember that there are no service contracts in China for cell phones, it's all Pay-as-you-go. All phones are unlocked, and once you have a phone, you purchase a China Mobile (or China Unicom, etc) sim card for the equivalent of $1.35. You add money to the sim card, and people mostly use text messages (each text message costs the equivalent of 1.35 US cents).

I'm not sure how Apple would get revenue sharing in such an "open" system.

As for a $500 phone, that's not that bad. Average cell phone costs are $130 to $300 (remember, no service contracts and therefore no subsidized cell phones). When I was over there, I remember seeing the Nokia 8800 for over $1000 USD equivalent!

[Jamar @ Dec 1st 2007 12:43AM]

Yes, there are service contracts. You have to be Chinese to get one, though. Subsidies work on a sliding scale- get the $5/month plan and don't expect a whole lot. Get the $70/month plan and that 8800 will be nearly free. Subsidies exist in prepaid too- start your account with 1.8x the value of your phone in prepaid credit and you get the phone free. Once you know how this works you will be able to save even more money than you do now on cellphones in China.

[tamoghno @ Dec 1st 2007 12:28AM]

most of the people of china cant afford iPhone ,
BUT
if 10% of people can afford it then its probably bigger than most European country.

AND YES, contract , or service wont work in china. they just dont used to that.

[Alonski @ Dec 1st 2007 3:44AM]

I think that their are already enough phones in that market. Personally I don't like the iPhone.

My favorite site:
www.talkvideogames.com

[Harry @ Dec 1st 2007 5:42AM]

Just so you know, the Ministry of Information Industry of China prohibits cell phone communication over WiFi. That means no personal mobile communication terminals in China are allowed to have WiFi functionality.

Apple will have to disable or remove its WiFi chip to comply with the regulation.

(get it out first: WTF!!! Blatant iPhone rip-off!!Vaporware!!)
Oh, by the way, presumably, that's what causes the delay on MiniOne/Meizu M8.

[Jamar @ Dec 1st 2007 9:56AM]

Like heck it will. Nokia released its Wi-fi capable phones intact in China (unlike in America, where Nokia had to remove Wi-fi to cater to AT&T's whims). So, for that matter, has Samung, and every other company that makes smartphones/cell-enabled Pocket PCs. Don't know where you found that info, but it's not true. That, or it's true, but it's not enforced because it has the potential to bring the Chinese smartphone market to a grinding halt. I personally think it's not true.

[Jose @ Dec 1st 2007 7:47AM]

But maybe Japan and Taiwan will be a better choice. Macs in Japan has about 50% of marketshare. Everybody in Japan is CRAZY for the iPhone!! and, I heard that most of the chinese companies which earns a lot of $$ are all Taiwanese. Even the biggest company of tecnology in ChinaPRC are from TaiwanROC. Remember, iPhone is mounted by a Taiwanese company.

The Chinese doesn't care if they have an "REAL" iPhone!~

[Jamar @ Dec 1st 2007 10:04AM]

Japan has no GSM-based 2G. Their 2G is essentially TDMA with a few differences(compare Japanese 2G phones with American TDMA phones- yeah, we got the REALLY short end of the stick). So without a 3G iPhone they can't sell in Japan. Taiwan would work, though.

[Jose @ Dec 1st 2007 9:09PM]

so does it mean that there will be an new 3G iPhone next year at MacWorld 2008??! Just a few months away! If it is true, that'll be great!+

[Lawrence Sheed @ Dec 1st 2007 9:59AM]

Given that iPhones are already widely available here, it doesn't really matter if they sell them or not. I know at least 8 people that have them here in Shanghai.

Phones are a status symbol here, and being seen with an old phone is only something a foreigner would do.

The iPhone here usually retails at about 4000RMB for the 8G model (although it has gone up slightly to 4300ish since the 1.2 update).

Thats about 2 months salary for your average white collar staff. Given most people here live at home way past the age they would in other countries, that leaves a lot of discretionary income available for things like the iPhone.

@Harry, yes, technically true, but in reality everything is available.
eg e61i (with wifi), iPhone (with wifi) etc...

[benjasmine @ Dec 1st 2007 6:07PM]

very ture, you can buy like everything in China nowadays. Even tho things like iphone, PSP, PS3 and many other electronics gadgets are not officially available in China, but they have been secretly imported (smuggled) mostly from Hong Kong to Shenzhen, then they will distribute the goods to all major cities in China. There is a whole industry doing this. They can even help you ship the things back to Hong Kong to get warranty service, if the product has problems. Even if iphone will be officially available in China, it will be more expensive, thus will not be able to compete against the unofficial ones.

[whot @ Dec 1st 2007 11:46AM]

gee, but when is it coming to singapore?

[Constable Odo @ Dec 1st 2007 2:12PM]

Heck, even if the Chinese can afford an iPhone, what the heck are they gonna hook it up to. Do they even use computers? Do they even have computers? Do most people there even have electricity to run computers? I can hardly picture some dude riding his camel in the Gobi Desert dialing up on his iPhone.

Apple will be lucky to sell a thousand iPhones in China with those crazy telecom companies trying to dictate no revenue sharing. They need a lesson in capitalism and American greed. They'll be sorry for passing up the iPhone when the Chinese masses start picketing and rioting for not being allowed to have iPhones. It's their loss.

[Hotwings @ Dec 2nd 2007 1:44PM]

I would think it's because they already have too many iPhone knockoffs like Meizu and they don't want Apple to know about it.

[whot @ Dec 2nd 2007 10:15PM]

@constable Odo

what a great display of ignorance. travel sometimes, dude

[M. Butt @ Dec 2nd 2007 11:26PM]

@constable Odo

I have never seen such horribly ignorant comments, are you from Mars? China mobile is one of Fortune global 500, its revenue is US$31.40 Billion in 2005 and US$34.80 Billion in 2006. In 2006, China mobile has 301.2 million subscribers. Concerning iphone, frankly, I think apple needs China mobile much more than China mobile needs Apple. The reason is simple, Chinese mobile service market is not an open market. There are only two major service providers, China mobile and China unicom, both of which are huge size companies. Even China mobile has no iphone, the cell phone users have to use their service anyway. A better strategy for apple is to directly sell iphone in retail stores. I would never doubt young people who are enthusiast to stylish stuff are willing to pay $500, even probably that is his/her one month income, to own a high tech toy. I will never say ALL Chinese cell phone users can afford it, but I will say many of them afford it and are willing to buy it. Don't forget the huge number of population, even a small percentage is a big market.

[michelle @ Dec 8th 2007 7:40PM]

China knock out some great phones, I brought a Kebaote K915 a few weeks ago off a supplier on Ebay, it's got a built in tv and fm tuner so I can now watch tv on the move completely for free - great! I'm not disappointed at all, it was half the price of the N95 and is much more entertaining.

[stephen @ Dec 23rd 2007 3:31AM]

the two are marked as "黑吃黑，狗咬狗" in China now,
so no contract is quite normal