Apple, China Mobile sign long-awaited deal to sell iPhones

China Mobile could gain 17 million new iPhone activations in 2014

A man uses an Apple iPhone in front of China Mobile banners at one of its branches in Beijing. Apple said it has signed a long-awaited agreement with China Mobile Ltd to sell iPhones through the world’s biggest network of mobile phone users. Photographs: Kim Kyung-Hoon/Reuters
A man uses an Apple iPhone in front of China Mobile banners at one of its branches in Beijing. Apple said it has signed a long-awaited agreement with China Mobile Ltd to sell iPhones through the world’s biggest network of mobile phone users. Photographs: Kim Kyung-Hoon/Reuters

Apple Inc said it has signed a long-awaited agreement with China Mobile Ltd to sell iPhones through the world’s biggest network of mobile phone users.

In a deal that could add billions of dollars to its revenue, Apple said its smartphones will be available to China Mobile customers starting January 17th. Pricing and availability details for the iPhone 5S and 5C lines will be disclosed at a later date, it said.

China Mobile, which has about 760 million customers, will begin registering orders for iPhone from December 25th, the company said on its account on the Sina-Weibo micro-blogging service.

The tie-up provides a much-needed boost for Apple in a country where it’s trailing rivals, even though China is its second-largest market after the US. It will also give Apple extra firepower in its intensifying global competition with South Korea’s Samsung Electronics Co Ltd.

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Apple didn’t disclose financial terms of the agreement. Tim Cook, Apple’s chief executive, said that China is an extremely important market for the Cupertino-based company.

In a country where smartphone sales are booming, Apple has trailed its competitors. Shipments of iPhones in the country grew 32 per cent year-on-year for the third quarter, about half of China’s Lenovo Group Ltd, which had the next slowest growth at 64 per cent year-on-year.

China Mobile could gain 17 million new iPhone activations in 2014 alone, according to research firm Forrester – more than the 16.8 million iPhones Apple sold in mainland China for the 12 months ended September, according to Forrester data.

But after an expected initial surge, Apple is likely to find itself back in a costly marketing battle with Samsung Electronics.

The deal has been years in the making, with numerous visits by Apple to the state-owned carrier’s Beijing headquarters. Negotiations have been tricky, in part because of disagreements over details such as revenue-sharing, analysts have said.

China Mobile was the only Chinese carrier not to offer customers the iPhone up to now due to compatibility issues with the carrier’s 3G wireless technology, known as TD-SCDMA.

On December 4th, Chinese regulators awarded 4G wireless licences to China Mobile Ltd, China Unicom Hong Kong Ltd and China Telecom Corp Ltd, removing the final stumbling block to the deal.