Apple strikes multi-year deal with China MobilePosted: December 22, 2013
The long-awaited deal will see Apple sell its iPhones in the world’s largest smartphone market via China Mobile’s retail stores on January 17 for the first time
Rebecca Clancy writes: Apple has announced a long-awaited distribution deal with China Mobile, the world’s biggest phone carrier, which could generate billions in revenue for the world’s most valuable tech company.
Demand for iPhones, once hugely popular in China, have slumped there as lower-priced rival smartphones from Samsung and Chinese companies entered the market.
The financial terms of the deal were not announced, nor were the details of pricing and availability for its latest iPhone, the 5S and 5C lines, which Apple said would be available at a later date.
The phones will go on sale in China Mobile’s retail stores on January 17 for the first time, but customers will be able to pre-order from December 25.
The phones for China Mobile’s network will also be available in Apple’s retail stores in China under the multi-year deal.
Tim Cook, Apple’s chief executive, said: “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 tie-up with China Mobile had been rumoured for some months, with the launch of the iPhone 5C in September seen as a cheaper handset aimed at the Chinese markets.
Apple had just 5pc of China’s $80bn smartphone market in September, according to figures from analysis firm IDC, significantly lower than rivals Samsung.
Apple will be looking to increase that share through China Mobile, the largest mobile operator in China and the world with more than 760 million customers.
A deal between the companies had previously been delayed after China Mobile adoption of home-grown 3G, which hasn’t been adopted by any other carrier globally, and which Apple had been reluctant to support.
However, at the start of December, China Mobile was awarded a 4G licence that will be compatible with Apple’s iPhone 5C and 5S.
At the moment Samsung dominates the Chinese markets and Apple will be looking to make up ground with this new deal.
The South Korean firm is better established within the country, opening its first Beijing office in 1985. Conversely, California-based Apple only started making significant headway into the lucrative market since the launch of the first iPhone in 2007.
Apple is seeking new customers for its devices amid signs of saturation in the market for high-end handsets. CEO Tim Cook is under pressure to reignite growth and maintain the margins of the world’s most valuable technology company.
In October, Apple forecast gross margins that missed analysts’ projections amid higher costs to introduce new iPhones and iPads ahead of the holiday shopping season. The company expects revenue in the December quarter to be $55 billion to $58 billion, the company’s first single-digit sales rise for the holiday period since 2008.