The long circulating rumors of a low-cost iPhone have some foundation in the need for Apple to be more competitive in specific international markets. There is no bigger marker, nor bigger wireless carrier than China Mobile, LTD. Reuters reports that Qualcomm chips that work on China’s network, combined with 4G licenses by years end suggests a partnership could be in the cards.
China Mobile has 740 million users making them the largest single wireless carrier in the world. That represents a huge opportunity for Apple, so why haven’t they brokered a deal. For one, it would have required changes to iPhone hardware in order work on their network. This no longer becomes an issue with the new chips and 4G on the horizon. China is expected to support TD-LTE, while most markets are opting for FDD-LTE. The Qualcomm chips can operate on both networks.
A longstanding issue has also been price. Apple ships one new iPhone each year and it’s of the premium variant. Building what Apple believes (and many agree) are the absolute best smartphones requires expensive chips, optics and components. Quality phones don’t come cheap. While that’s welcome news to many markets, it’s not the case in China and other countries where they simply cannot afford $650 phones. The iPhone has been available through China Unicom, but still saw sales down 43 percent in the second quarter as compared to last year.
Adding fuel to the fire was a visit from Apple CEO Tim Cook to Bejing, China last month. Cook met with Xi Guohau, Chairman of China Mobile. Anyone want to venture to guess what was discussed?
The iPhone 5S is expected to debut at the iPhone Special Event on September 10th. A number of parts leaks suggest it’ll have company in the form of a plastic iPhone 5C, aimed squarely at value based consumers and markets like China. A cheap iPhone 5C is important for consumers, here in the U.S. and internationally.