Are China Mobile and Apple close to a deal?
As many Apple follows know Tim Cook, CEO of Apple made a trip to China last month to meet with Xi Guohua, Chairman of China Mobile. To say the least the trip, Mr. Cook’s second of the year to China has set off speculation fire storm of nearing deal between the two companies.
In the past Apple and China Mobile have resisted in making a deal with China Mobile because iPhone would need to go under a redesign to work on China Mobile’s TD-SCDMA 3G technology, China Mobile has been reluctant to market such an expensive phone.
Has this changed?
The buzz is that Apple will be releasing next evolution of the iPhone and possibly a cheaper version for emerging markets. Speculation is for a redesign in the internal hardware to contain the critical chips from Qualcomm (QCOM, quote) that will allow the phone to run on not only the China Mobiles main stream network but many of the obscure networks within China.
Add into the mix that Beijing officials are expected to release 4G licenses favoring the larger operators by the end of 2013. Here’s the catch …the 4G licenses are expected to be for TD-LTE technology and the more commonly used FDD-LTE technology but this should not cause a problem if Apple indeed is using Qualcomm chips. The Qualcomm technology can handle both types of networks. This would mean Apple only needs to have one design for the next generation making it easier to pen a deal with China Mobile.
If Apple is taking this road and make a deal with China Mobile with a cheaper phone for the emerging markets, Apple would gain access to China Mobile’s 710 million customers (as of December 31, 2012).