Coveted iPhone deal more important to China Mobile than Apple

“The weekend deal between Apple Inc. and China Mobile Ltd. has been generally interpreted as a boost for Apple — and it is,” Paul Ausick writes for 24/7 Wall St. “While the deal was important for Apple, it was probably more important to China Mobile, a company that is majority-owned by another company that is wholly owned by the Chinese government.”

“The reason for the lack of iPhones on China Mobile’s network has long been the carrier’s slow adoption of a compatible 3G network. Of China Mobile’s 763 million customers, only 181 million were 3G subscribers at the end of November,” Ausick writes. “That means 582 million subscribers were on the company’s 2G networks. Does anyone in the United States or Europe remember the 2G network? Didn’t think so.”

“The agreement between Apple and China Mobile was delayed by this lack of network structure. Apple needed a commitment from the Chinese firm that it would build out its 4G network before iPhones would be available,” Ausick writes. “pple honchos, likely led by the late Steve Jobs, did not want to sell iPhones on a network that either could not support them or would make them look bad and not worth the premium price.”

Read more in the full article here.

Related articles:
Apple shares jump on China Mobile deal – December 23, 2013
It’s official: China Mobile and Apple bring iPhone to China Mobile networks on January 17th – December 22, 2013


    1. It is baffling to me to see so many misinformed neophyte iPhone users who blame their iPhone for such pathetic piss poor carrier connectivity. News FLASH! Your iPhone is NOT the problem. The carriers ARE the problem.

  1. i’m not one of those misinformed but i am one of the uninformed. i was curious …does anyone know if any critical components of the iPhone are not made in china ..or, maybe, i should ask like this; do we in the west make any components that aren’t currently or can’t be produced anywhere else that are critical to the iPhone’s function besides iOS. does anyone know what i’m trying to ask. i can’t seem to divine the right sequence of nouns, articles, verbs, etc. in other words, this is ridiculously hypothetical, but could the chinese government cut apple out of the loop if the political environment over there got a fever. and please don’t tell me i’m stupid. i already know that.

    1. If you’re asking whether the Chinese government will use China Mobile to spy on its citizens—or anyone using the network—over iPhone, you’d be hard pressed to find anyone to convince you otherwise.

      Our own FBI spends millions of dollars and recruits notorious hackers to ensure they can dismantle the security of any electronics device and the Chinese make the FBI look like high schoolers, where hacking is concerned.

    2. The A7 system chips in the iPhone 5s are manufactured at a Samsung fab in Austin, Texas. The same may be true of the A6 in the iPhone 5c. There are currently no facilities in China capable of making these chips.

  2. I’m happy Apple’s share price went up but I’m certain that if any other smartphone maker cut a deal with China Mobile the share price would have probably gone up at least 5%. Apple shareholders are going to have to fight Wall Street for every little share price increase.

  3. When iPhone was first released EVERYONE was using 2G and Apple wasn’t going to wait for the carriers to finish upgrading to 3G, so we made due with 2.5G… enter iPhone 3G.

    760-million customers? US carrier’s would suck a dick for that kind of revenue pool. All US carriers combined might add up to 300-million customers so how is this not a tsunami of consumers for iTunes Store and iCloud?

    Listen, you can hear a giant sucking sound of bandwidth being consumed!

    Android, are you listening?

  4. Apple is not the only supplier for 3G and 4G phones in China. Most Chinese use smartphones but not 3G, 4G network, and it is not because lack of iPhones in China. Apple’s market share in China is shrinking. It does not and can not push China’s 3G/4g network moving forward faster. The deal is a boost for Apple, not much for China Mobile. The real misinformed here are those who take this as an ‘intelligence analysis’ because they saw it fits their imagination and taste.

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