China Mobile Chairman Xi Guohua said that his company's alliance with Apple will be "broad"

Foxconn has shipped over a million iPhone 5S smartphones to China Mobile ahead of the big launch, and Apple is looking to expand its relationship with the carrier in hopes of seeing continued returns of the same vein.
According to a pair of reports from The Wall Street Journal, Apple is in talks with China Mobile about expanding the relationship between the two. More specifically, China Mobile Chairman Xi Guohua said that his company's alliance with Apple would be "broad" and likely go beyond just working on handsets together. 
Neither Apple nor China Mobile went into specifics on the deal, but Guohua did say that China Mobile plans to offer subsidies for the new iPhones. This would be significant for Apple, as its iPhone 5C and iPhone 5S are much more expensive than many of the Android-powered handsets offered. 
The 16GB iPhone 5S costs 5,288 yuan ($870 USD) while a 16GB iPhone 5C runs CNY4,488 ($738). This is pretty high compared to an Android-based phone with similar hardware from startup Xiaomi Inc., which only costs about $327 USD. 
While Chinese carriers do offer subsidies, they don't match those in the U.S., making smartphones in China much more expensive. The iPhone's high price could ward off many potential customers, so the introduction of iPhone subsidies would be helpful for Apple.


Teaming up with China Mobile and looking to expand the relationship is a smart move on Apple's part, considering the Chinese telecom has over 760 million users. Foxconn, Apple's major iPhone manufacturer, shipped 1.4 million iPhones to China Mobile just last week ahead of the big launch this Friday (January 17). 
The new deal with China Mobile is expected to boost global iPhone sales by 10 million to 30 million this year. In the third quarter of 2013, Apple came in fifth place with a market share of 6 percent in China. 
Gartner reported that Apple's global smartphone market share fell to 12.1 percent in the third quarter behind Samsung's 32.1 percent. 
While Apple still trails behind Samsung, a recent report from Reuters said that Samsung could see a slower 2014 as far as smartphone sales go due to Apple's new deal with China Mobile. Analysts forecast that Samsung's mobile devices business will either grow by a single digit or to "shrink mildly" in 2014. This is considerably slow after the company managed to grow by eight times over the past five years, according to Thomson Reuters' Starmine SmartEstimate. 
But this hardly means Apple is going to march into China and take over. Samsung has been selling its phones through China Mobile for 7 years, and is the country's largest vendor with 70 million units shipped last year, which accounts for 20 percent of its total shipments.
To top it off, technology research and advisory firm Gartner just predicted that devices running Google's Android mobile operating system will achieve 1.1 billion shipments in 2014 -- and Samsung sells the most Android phones out of any other hardware maker. This represents a 26 percent boost from 2013's total.
Apple finally scored the deal with China Mobile in December 2013.

Source: The Wall Street Journal

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