According to a report from the Wall Street Journal, Apple has begun shipping iPhones to China Mobile, suggesting that an agreement between the two is imminent and would allow the carrier to offer the new low-cost iPhone 5C. Much of the reasoning behind Apple’s move to offer a cheap iPhone, was in order to be more competitive internationally, specifically in China. The two companies have been in negotiations for years, but haven’t been able to finalize a deal. The expected launch of the iPhone 5C likely was the difference maker. As for Apple, the significance of a partnership with China Mobile cannot be understated. They are the largest wireless carrier in China with 740 million users. To put things in perspective, China Mobile is seven times the size of Verizon, the largest U.S. carrier.
Apple hasn’t fared well in China holding just a 5% market share, while Samsung is the leading carrier with an 18% market share. If and when China Mobile begins offering the iPhone 5C, it should have a profound effect on their market share.
Earlier this month, we had heard that new Qualcomm chips would work on China’s existing networks which are considered ‘obscure’. China is expected to grant 4G licenses by years end, so technology hurdles that existed in the past are no longer.
In July, Tim Cook visited the China Mobile’s Chairman, Xi Guohau. If Apple has started shipping iPhones to China Mobile, one would suspect that a deal is imminent. If so, there is no bigger stage than Tuesday in Cupertino.