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
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,
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.