China Mobile: Merry Christmas, Apple

Customers queue to buy Apple's new iPhone 5c and 5s at the Wangfujing flagship store on September 20, 2013 in Beijing, China. China Mobile, the world's largest mobile carrier, will begin selling iPhones in January.

Just how big a deal is 760 million potential customers? Some are putting it in US terms. "China Mobile by itself is more than seven times larger than the biggest US carrier – AT&T or Verizon," says Philip Elmer-Dewitt, a writer for Fortune, who has been writing about Apple since 1982. "So this is just a huge get for Apple, and I’m sure Steve Jobs would’ve loved to have had it before he died."

But for years, there was hesitation on both sides. Apple didn’t want to modify the iPhone to conform to China Mobile’s nonstandard wireless protocol, and China Mobile didn’t want to budge. But now, with China Mobile losing market share to competitors, the deal was inked on Sunday night in China, and the iPhone will be released on the company’s new 4G network in January.

Some analysts predict Apple will sell as many as thirty million iPhones. Shaun Rein, author of “The End of Cheap China,” thinks it’ll be closer to ten million. Rein says the bulk of China Mobile’s customer base isn’t going to shell out money for a new, fast iPhone. "80% of them are still using the old, outdated 2G network," says Rein, "So it’s going to be very difficult to convince Chinese consumers to leapfrog from 2G to 4G, which is an unproven technology."

Here’s another problem - the iPhone has a fraction of the market share (6%) that the Samsung Galaxy (22%) has in the China market. Apple does have impeccable timing though – China Mobile subscribers will be able to buy their new iPhones in mid-January; Just in time for Chinese New Year.

About the author

Rob Schmitz is Marketplace’s China correspondent in Shanghai.

Comments

I agree to American Public Media's Terms and Conditions.
 
 
With Generous Support From...