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Apple, China Mobile break off iPhone talks

updated 09:40 am EST, Mon January 14, 2008

Apple, China Mobile split

Apple and China Mobile have broken off all talks over the latter carrying the iPhone, Reuters reports. The iPhone is thus unlikely to ship to China in the foreseeable future, and unless the companies reconcile their differences, Apple will also be denied access to the 350 million subscribers China Mobile can provide. No reason for the split has been given; it has been suspected, though, that as hinted in earlier reports, China Mobile stood up to Apple demands for revenue sharing. Apple has traditionally insisted on collecting a portion of the income from each iPhone, as well as subscription fees.

"It's not a surprise, China Mobile doesn't want to share its non-voice revenue," says Duncan Clark, chairman of the telecom research firm BDA China. "The two have very strong egos and, as in any relationship, that often doesn't work." Revenue sharing is also generally said to be a foreign to the Chinese marketplace, which may work against Apple if it attempts to negotiate with China's other wireless carrier, China Unicorn.

Apple faces still greater problems in that the American iPhone costs $399, more than the average Chinese worker makes in a month. The market is also already being saturated with imitation iPhones, which lack some of the signature features yet are cheaper and cosmetically similar. The most prominent of these may be the Meizu M8, although it has yet to go on sale. Finally, Apple's locked SIM cards may be incompatible with Chinese networks.




by MacNN Staff

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Comments

  1. Ikon

    Joined: Dec 1969

    0

    Ship to China?

    Hmm, I thought they shipped from China. :-)

  1. ZinkDifferent

    Joined: Dec 1969

    0

    odd...

    the Chinese original article appears to not imply negotiation are broken off - then again, if that were the case, the key is not to look into a deal with a competitor, but rather with Taiwan or any other regional telecoms that China considers 'inferior' to their own 'might'.

    Mainland Chinese companies and their leaders are mostly peasant-like morons who enjoy the illusion if being catered to by the West. The key is to pull that rug out from underneath them, and threaten to have them lose face by falling on theirs ... Or by simply paying the right person tea money.

  1. mgpalma

    Joined: Dec 1969

    0

    re:I thought they shipped

    "I thought they shipped from China"

    Good catch! I don't know for sure, but all my Macs have shipped from China, so why not the iPhone.

  1. unity@mac.com

    Joined: Dec 1969

    0

    Shipping

    My iPhone says "Assembled in China". But my iMac says Ireland? Hmmm...

  1. Smurfman

    Joined: Dec 1969

    0

    China...

    Man... I am so sick of everything being made in China. America needs to cut off 50% or more of the imports from them. 90% of the stuff is junk anyway.

    However, economically, China is a big player and I'm sure there's fear of reducing imports.

    Oh well, I guess we'll probably see more and more junk shipping into our country, year after year until China becomes so big, we'll have no choice whatsoever.

  1. thebiggfrogg

    Joined: Dec 1969

    0

    China Unicorn?

    I've lived in China for the past three years and just want to let the editors know it is China Unicom (proofreading anyone?) I hope China Leprechaun will be offering the iPhone soon though.

    As for Chinese "junk"--the same thing was said about Japanese products in the 1960s and 1970s. Only a matter of time before the Chinese move from being copycats and purveyors of cheap stuff to making quality stuff of their own. Besides it wouldn't be shipped to the ol' US of A if we wouldn't buy (re: Lowest Prices, Always).

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