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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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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

"A politician stumbles over himself... Then they pick it out. They edit it. He runs the clip, and then he makes a funny face, and the whole audience has a Pavlovian response." -- Joe Scarborough on John Stewart over Jim Cramer
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