Why China Mobile Deal is Gold For Apple

For Apple Inc., it could prove to be a huge breakthrough if the company manages to win a place in the line-up of the largest telecom provider in China, not to mention what a big shakeup it would be for the smartphone market. According to a report that was seen in the Wall Street Journal, an agreement had been reached between China Mobile and Apple for bringing the iPhone to customers in the Chinese smartphone market, which seems to be dominated by low-cost Android smartphones. Unnamed sources were quoted in the Journal about China Mobile Deal that had stated that the two companies had managed to sign an agreement that would add iPhones to the roster of compatible devices of the colossal telecom firm later in this month.

The report was denied by China Mobile. A spokeswoman of the carrier, Raine Lei, stated that the talks between the firm and Apple Inc. were still ongoing and they are cooperating, but there isn’t anything to announce yet. For the iPhone maker, such a deal would prove to be a huge coup because it could aid the company in gaining a beachhead in the most populous nation of the world. As of October 2013, there are more than 750 million subscribers of China Mobile and it was also estimated that despite the lack of a deal between the two firms; there were still 35 to 45 million iPhones on the network.

It was also estimated that around 24 million phones could be sold by Apple Inc. on the China Mobile network in the upcoming year if it managed to join the formal line-up of the network. According to various analysts, it would be a very huge deal if China Mobile and Apple Inc. do get in synch, even though the monthly income of most of the consumers in China is equal to the cost of the iPhone 5C. Others were of the opinion that Apple’s products were greatly admired by Chinese consumers and it was a great opportunity for Apple to tap into the largest carrier of the world.

As a matter of fact, a license was just granted to China Mobile that allows it to upgrade to a new-generation network that would work really well with iPhones. Tim Cook, chief executive of the US tech giant has said that China is indeed a priority for the company and might be traveling to the country for taking part in an announcement later this month at a China Mobile Conference. It has been forecasted by IDC, the industry tracker that smartphone sales in China would reach 360 million by the end of this year and would even top 450 million in 2014 because of the granting of 4G network licenses and iPhones that would be launched on China Mobile.

The three state-owned operators have been granted licenses by the Chinese government for offering services on the better quality and faster speed of the 4G network that would give rise to a new era of competition amongst the mobile phone makers.