China Mobile deal may be Apple’s biggest news of this year - or next
Apple Inc. announced Sunday that it has finalized a deal to sell the iPhone through China Mobile, the world’s largest mobile phone carrier.
The deal has been in the works for years as Apple sought to gain a stronger foothold in this crucial smartphone market. Apple has been selling the iPhone through smaller carriers in China, but the reach of these companies collectively still left Apple as the fifth-largest seller of smartphones in the country
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Although Apple’s new product launches tend to draw the most frenzied attention, analysts have long said a deal with China Mobile was the single most important thing the company could do to re-ignite its rate of growth, which had been slowing over the last year.
“Apple has had the Wall Street monkey on their back to show growth, either expanding their current products via distribution or via a new category product like a watch, TV or convertible,” said Patrick Moorhead, an analyst at Moor Insights & Strategy. “The China Mobile deal is huge for Apple because it provides what they’ve never had: broad distribution in China with the country’s largest carrier.”
The iPhone 5s and iPhone 5c will go on sale Jan. 17 through China Mobile and Apple stores in China. That means the tech giant won’t get a boost from China sales in the current quarter, which ends Dec. 31.
Still, Apple has been steadily losing market share around the world, and specifically in China, to competitors that sell Android-based phones. Apple ranks fifth in China in smartphone sales, trailing Samsung, Huawei, Lenovo and Yulong.
“Apple has enormous respect for China Mobile, and we are excited to begin working together,” Apple Chief Executive Tim Cook said in a news release. “China is an extremely important market for Apple, and our partnership with China Mobile presents us the opportunity to bring iPhone to the customers of the world’s largest network.”
The announcement comes just a couple of days after China Mobile announced the launch of its new, speedier 4G network, though the iPhone will also be available on the company’s older 3G network. Although the company boasts 763 million customers, it has also seen some market share losses to smaller competitors that sell the iPhone.
“Apple’s iPhone is very much loved by millions of customers around the world,” Xi Guohua, China Mobile’s chairman, said in a news release. “We know there are many China Mobile customers and potential new customers who are anxiously awaiting the incredible combination of iPhone on China Mobile’s leading network.”
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