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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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Bleh
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).




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