Print 27 comment(s) - last by XPguy.. on Jan 17 at 9:39 AM

Apple and China Mobile See Red, End Talks

There may have been many heavy hearts in the investor community ever since Apple Inc. and China Mobile called off talks this week of bringing the iPhone to China, effectively killing the chances of the phone reaching what could have been the phones biggest market audience.

China Mobile is the leading phone company in China and has an incredible 350 million subscribers -- more than the entire U.S. population.  Hopes were high as talks survived all the way from early November.  The buzz that the massive provider would pick up the iPhone, raising its user base to a whole new level, was starting to gain support from analysts.

Early on, analysts were far more skeptical and some remained so.  Duncan Clark, chairman of BDA China, a Beijing-based telecoms research consultancy, expected the talks to fall through and explains that it was a war of wills between the firms.  He states, "It's not a surprise. China Mobile doesn't want to share its non-voice revenue.  The two have very strong egos and, as in any relationship, that often doesn't work."

Apple was able to get big cuts of the revenue from telecoms in Britain, France, and Germany.  In China, this is a less respected business practice, and China Mobile was extremely resistant to adopting such measures.  Despite achieving respectable sales success in the U.S., the iPhone would also have to struggle with other technical and censorship issues in approaching the Chinese market.

China Mobile remained cool in its response about the split, with a spokeswoman merely stating, "
Our parent has terminated talks with Apple over the iPhone."

The door remains open for more talks, with China Mobile telling the press that it is willing to participate in possible future talks.  The country's smaller provider,
China Unicom, has also expressed interest in talks with Apple.

Apple is also experiencing resistance in its talks with Japanese telecoms.

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China doesn't need the iPhone
By glenn8 on 1/15/2008 4:06:27 PM , Rating: 2
... China's been riding with the iFone for months now.

RE: China doesn't need the iPhone
By helios220 on 1/15/2008 4:26:14 PM , Rating: 5
Maybe they have been too busy playing their Chintendo Vii and super-sleek 'Winner' to spend too much time on their iFones.

RE: China doesn't need the iPhone
By helios220 on 1/15/2008 4:32:59 PM , Rating: 5
Sorry for the double post... but I couldn't contain my enthusiasm for playing "Fry Egg" on Vii where finally I can fulfill my insatiable need for egg frying without having to eat anything.

Yes, these are the type of people we're dealing with in China.

RE: China doesn't need the iPhone
By PandaBear on 1/15/2008 7:03:09 PM , Rating: 2
Don't forget the "free craps"

RE: China doesn't need the iPhone
By feelingshorter on 1/16/2008 1:13:03 AM , Rating: 2
What an eyesore.

RE: China doesn't need the iPhone
By xti on 1/16/2008 5:56:03 PM , Rating: 2

RE: China doesn't need the iPhone
By glenn8 on 1/15/2008 4:33:05 PM , Rating: 2
What's a "super-sleek Winner"?

By T4RTER S4UCE on 1/16/2008 10:17:58 AM , Rating: 2
They should combine and make the Wiinner

RE: China doesn't need the iPhone
By Cygni on 1/15/2008 5:37:12 PM , Rating: 2
The amount of fake iPhones sold in places like China and India is staggering, and they are absolutely hilarious if you have ever used a true iPhone... which most of the world, obviously, hasn't yet.

RE: China doesn't need the iPhone
By XPguy on 1/17/08, Rating: -1
RE: China doesn't need the iPhone
By xphile on 1/16/2008 3:13:30 AM , Rating: 2
China either is, or will be, making most of, if not all, the iPhones. This ONE company has an active cellular market of more than the ENTIRE United States population. I reiterate these points as it seems to have passed a little over most posters heads. You don't, not even if you are God playing in this market right now, ignore these two factors as in China they are inter-related. China wins on every manufacturing contract. And that is the ethical concept in all negotiations with the West - China must win, not... China will be seen to be screwed like every other country, and doubly so since we even make the damn thing!

Hey Apple - Hey , Hello! We MAKE THESE PHONES, and last time we looked we have more money at your disposal than you can ever imagine, increasing in multiples every single year... think again or give it up to somebody else. We like technology as much as the next man, and good technology as much or more as he does too, but like any business deal, money and volume talks, and you are simply NOT going to find this kind of volume, nor this kind of potential money; not anywhere - even in your wildest dreams.

Maybe not right now, but in terms of profit, ANY other manufacturer following along behind using Apples ideals (lock in contract kick-backs) could kill Apple in profits outright by being THE one to get a deal with the major Chinese telcos at a lesser rate with some other future competing technology. I don't think even Steve Jobs would be arrogant enough to cut off his wallet to spite his ego. Though agreed that's to be seen, but this both already is, and even more importantly for those that do not realise, is rapidly becoming, not just a manufacturing precipice, but an economy than no company either wants to, nor can afford to ignore.

RE: China doesn't need the iPhone
By PandaBear on 1/16/2008 8:12:32 PM , Rating: 2
Apple can do whatever it wants with the iPhone, as long as they pay for the manufacturing costs. China can do whatever it wants with the money it get from manufacturing the iPhone, buying the iPhone or not.

I don't see why people get all emotional about Apple or China. If Chinese want a cheap phone and Apple want a cut of subscription, and they don't work out, what is the big deal? Just grab a cheap phone that has lower profit margin and get over it.

What the fvck is all the emotion about? Don't like it? Don't buy it.

Yes, I am Chinese too.

They will just illegally copy its design anyways.
By EglsFly on 1/15/2008 4:23:16 PM , Rating: 5
I'm sure some company in China will just rip the designs of the iPhone and make their own, since China is one of the worst countries when it comes to Piracy and respecting intellectual property.

Vote me down if you think I am wrong...
Vote me up if you think I am right...

By kamel5547 on 1/15/2008 4:28:31 PM , Rating: 3
While the design may not be a huge issue, the OS and functionality will be a bigger one.

Its ahrd for anyone to create a device that is as integrated as the iPhone, and definitely impossible to tap into one with as big of a media market (i.e. iTunes).

Any copy wouldn't have the same pull as the iPhone.

By HighWing on 1/16/2008 2:42:16 PM , Rating: 1
Its ahrd for anyone to create a device that is as integrated as the iPhone, ...

If you seriously believe that, then you haven't seen or used any other smart phone on the market. Almost all, and I mean ALL the other smart phones can do the same things application wise as an iPhone, plus they can download third-party apps legally and have a qwerty keyboard. the only thing special about the iPhone is it integrates with iTunes, and the special "pinch/flick" touchscreen effects. I'm sure I'll get voted down by all the mac/iPhone users, but that does not change the fact that I am right.

By PandaBear on 1/16/2008 8:15:48 PM , Rating: 2
It is very easy, Apple didn't build any of the parts internally, just buying it and integrating it together.

Good for them
By Suomynona on 1/15/2008 5:01:02 PM , Rating: 5
I think the iPhone is pretty nice, but that doesn't mean Apple is entitled to a bigger share of a mobile carrier's profits. I know it's not the kind of "FU" coming from this company as it would be for a major western carrier, but it's still kind of satisfying.

For all the talk about Apple "changing the game" with the deal they struck with AT&T, it's just transferring control from one evil company to another. The only win for the consumer is a transfer of control from both wireless carriers and cell phone vendors to the consumer. Giving Apple the ability to lock down your phone isn't that much better than giving AT&T or Verizon the ability to lock down your phone.

RE: Good for them
By bhieb on 1/15/2008 5:29:42 PM , Rating: 2
I know it's not the kind of "FU" coming from this company as it would be for a major western carrier, but it's still kind of satisfying.

I don't know I'd say it is a bigger one since this company has more subscribers than every man woman and child in the US. Just because we've not heard of them does not make the FU any less important. This is a huge loss for Apple, I wonder what it was that Jobs just would not do for that kind of business. They probably wanted the OS code or something pretty horrible for Jobs to let that kind of market slip away.

RE: Good for them
By Suomynona on 1/15/2008 6:10:31 PM , Rating: 2
It's a much bigger economic hit to be locked out of such a huge market, but it's not as big of a hit to their reputation.

RE: Good for them
By cochy on 1/15/2008 10:00:55 PM , Rating: 2
I wonder what it was that Jobs just would not do for that kind of business.

From the looks of it, China Mobile didn't want to get into a revenue sharing deal with Apple. Nor should they want to. They have no incentive to unless there's the threat that Apple might partner up with a competitor of China Mobile. However if that's not a possibility, I don't understand why Apple would lose all the potential hardware sales over this impasse. Maybe they are just playing hardball.

Soup Nazi
By christojojo on 1/15/2008 8:51:11 PM , Rating: 2
Jason with a title like "No i-Phone for You" I think Seinfield's Soup Nazi picture would be perfect.

RE: Soup Nazi
By christojojo on 1/15/2008 8:53:54 PM , Rating: 2
The real reason
By Griswold on 1/15/2008 5:21:35 PM , Rating: 3
Jobs wouldnt allow the china mobile delegation to bring a screwdriver to the negotiations.

By GoodBytes on 1/15/2008 4:16:32 PM , Rating: 2
So they can't use the iPhone they produce... interesting...

By Moishe on 1/15/2008 4:59:08 PM , Rating: 2
"Our parent has terminated talks with Apple over the iPhone, instead we've chosen to talk to Apple over landline."

OK lame, but the wording made me think of it that way.

China don't need iPhone
By EclipsedAurora on 1/16/2008 3:15:01 AM , Rating: 2
Actually many mobile phone in China already having same function of iPhone, or even exceeding the features that iPhone can provide.

By DeepBlue1975 on 1/16/2008 7:08:57 AM , Rating: 2
This is worse for apple than it is for China.
They are loosing a huge market just because they think their crappy device is worthy of outstanding profits.

In fact I like the Chinese company's reaction towards Apple, it was time someone put made Apple eat its snobbish ego... It's just another expensive cellphone, one that has far less features than similarly priced smartphones (as a smartphone it can't hold a candle to any HTC device, or the nokia n95, save for screen size and the looks, a point that gets diluted once you see an Iphone with its screen with ugly fingerprints all over the place... oh, yes, and the fact that it is made by Apple which implies high regarding from Apple fanboys).

"If they're going to pirate somebody, we want it to be us rather than somebody else." -- Microsoft Business Group President Jeff Raikes
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