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Top Apple, China Mobile execs meet to talk “cooperation”

Erica Ogg — Thu, 10 Jan 2013 14:54:54 +0000

Surprising basically no one, Apple CEO Tim Cook made time on his trip to China to meet Thursday with his company’s most critical non-partner: the chairman of China Mobile. China Mobile is the largest carrier in the world’s largest market for mobile phones: the company counts 650 million subscribers. But while its competitors China Telecom and China Unicom have partnered with Apple to sell the iPhone, China Mobile remains a holdout.

For now, the two appear to just be talking, with no partnership deal announced. A China Mobile spokesman told Reuters: “In the morning, Apple’s CEO Tim Cook visited China Mobile’s headquarters. China Mobile’s Chairman Xi Guohua and Tim Cook discussed matters of cooperation.”

It’s not just a question of whether China Mobile wants to sell the iPhone. Apple would have to make the decision to make a specific variant of the iPhone that supports China Mobile’s unique flavor of 3G. As my colleague, Kevin Fitchard, has written, Apple did this early on with Verizon, a carrier with a customer base one-sixth the size of China Mobile’s. But it has so far held back from doing this for China Mobile; it’s not clear that’s a road Apple wants to go down, or if it would be able to make a device with decent profit margins.

China is crucial not only to Apple’s manufacturing capabilities, but to its future market share and profits: the region represents one of the fastest-growing markets for Apple mobile devices. As the company looks to expand its smartphone customer base, this carrier alone could help it make faster inroads into China.

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The world’s largest mobile operator is playing hard to get with Apple

Erica Ogg — Thu, 06 Dec 2012 00:19:45 +0000

One of the things that’s made Apple so uncannily successful in the mobile phone business has been its insistence on setting the terms with wireless operators. But Apple may have met its match with China Mobile, the largest mobile operator in China — and the world. The operator’s president had a few words to say about why it has yet to offer the iPhone on Wednesday, and as it turns out, it’s not a network compatibility issue that’s keeping the two apart.

According to Unwired View, which covered the China Mobile Worldwide Developers Conference, President Li Yue said of the iPhone:

Technology is not a problem, [it’s] mainly about business model and benefit-sharing issues.

Yue is saying that his company’s 2G GSM network isn’t the barrier to them selling the iPhone. And that’s technically true: there are double-digit millions of China Mobile subscribers who’ve been using the iPhone on the network anyway — similar to how you can technically use the iPhone on T-Mobile in the U.S. But he also may be implying that there’s no “technology” barrier to Apple simply adding the right kind of 3G radio to the iPhone to make the device work on his network for both cellular and data connections. After all, Apple has been forced to design multiple versions of the iPhone, rather than a single global model even here at home in the U.S. If Apple is already making iPhone for AT&T and Verizon’s unique 4G frequency bands, why not make one for the world’s largest carrier, is one way to think about it.

Yue is also saying that he’s not convinced selling the iPhone makes financial sense for his company. Apple does make rather large demands of its carrier partners, requiring them to make big investments in iPhone units up front. And he also appears concerned over Apple’s terms. The iPhone is one of the best-selling smartphones in the world, and Apple clearly has the leverage to command a profit-sharing agreement that is in its own best interests.

However, it does sound like Yue’s comments are very likely a negotiation tactic. China Mobile and Apple have been talking for years about working together. Apple has the second- and third-largest Chinese carriers on board, but China Mobile would be hugely important to Apple’s future growth in the country. That’s why Yue can play hard-to-get.

China only grows more crucial to Apple, so it seems like Apple CEO Tim Cook will at some point want to make a deal — even if the terms aren’t quite as favorable as he’s used to.

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Why Lumia 620 plus 920T equals big opportunity for Nokia

Kevin C. Tofel — Wed, 05 Dec 2012 14:25:27 +0000

Nokia introduced two new smartphones on Wednesday, the Lumia 620 and Lumia 920T. These represent the opposite ends of the spectrum when it comes to handsets: The low-end 620 carries an unsubsidized $249 price tag while the 920T will retail at more than $700 minus any carrier subsidies. Yet, both together represent what may be Nokia’s best chance to gain market share on its peers.

The budget-priced Lumia 620 is aimed at the first-time smartphone buyer and perhaps that’s a good audience to target. Most who have a smartphone have already invested in either iOS or Android apps for their phone, making it a barrier to switch. Some surely will give up their iPhone or Android for a Windows Phone, but so far, relatively few have based on market share and sales figures.

Consider a feature phone owner that hasn’t bought apps tied a platform, however. At $249 retail, a carrier could easily subsidize the cost down to nothing and the new smartphone owner would have a capable, easy to use device with apps and a media ecosystem in Windows Phone.

The device has a 3.8” ClearBlack display with 800×480 resolution, 8 GB of internal storage with expansion up to 64 GB, 5 megapixel auto-focus camera supporting 720p video capture, and a 1 GHz dual-core Snapdragon S4 processor. Also included are radios for NFC, GPS, Bluetooth, and dual-band Wi-Fi.

There’s little here that a first-time smartphone buyer would be missing. And while smartphone penetration in the US and a few other regions is already past the halfway mark, there are plenty of countries where feature phones are still in the majority. It’s here that the Lumia 620 — and Windows Phone — has opportunity.

The other big opportunity is China, the world’s largest smartphone market, and that’s where the Lumia 920T comes in. This is the first Windows Phone 8 device on China Mobile — the nation’s biggest operator with 703 million subscribers — and the first Windows Phone device that supports the TD-SCDMA 3G interface. This alone helps the Lumia 920T stand out as Apple’s iPhone doesn’t yet support this 3G standard.

Nokia’s new Lumia 920T likely shares much of the same parts and functionality of its flagship 920, with the addition of the TD-SCMA support, of course. A dual-core Snapdragon S4 Pro chip with slight variations and a different GPU will power the 920T.

Nokia hasn’t announced any other official specs, but much of what buyers like in the original 920 should be there. That phone has a 4.5-inch 1280 x 768 display, 8.7 megapixel camera with optical image stabilization, Qi wireless charging and every radio or sensor one would want in a modern smartphone. AT&T currently sells the 920 for $99 with contract in the US, but the audience is limited due to the lead in mind share, if not market share, that iOS and Android have. While Android is a big seller in China, the lack of iPhone on China Mobile should help Nokia.

Since Windows Phone and Nokia were both late to the current smartphone era, I see more opportunity now with this strategy of a low-cost Lumia for areas still dominated by feature phones and a China flagship variant that doesn’t yet have to compete with Apple’s iPhone.

If this doesn’t work to build sales momentum, however, I’m not sure where else Nokia can find new Lumia opportunities going forward. And in many respects, that’s a shame because the Lumias are a solid line of smartphones that are plagued more by their timing than their actual features and functions.

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Why Apple needs a more worldly phone soon

Erica Ogg — Mon, 09 Jul 2012 19:02:38 +0000

China is now the biggest smartphone market in the world, tech analyst Charlie Wolf of Needham & Co. reported in a note to clients on Monday. There were 33.1 million units sold in the last quarter alone, and Android is flat-out dominating those sales. With almost 70 percent of China’s smartphone market share, Google’s mobile OS is far ahead of Apple’s nearly 18 percent share. Nokia follows with 11 percent share this quarter. (Hat tip, AppleInsider.)

It should cheer Apple that since last year it has doubled its market share in China: In the same quarter a year ago its share stood just shy of 10 percent. But it’s very obvious that Apple needs to do something about its carrier availability in China — and fast, if it wants to compete with Android there.

The reason the iPhone grew so much in the last year, Wolf points out, is that the iPhone 4S finally became available to China Telecom’s 125 million subscribers in March. Apple also counts China Unicom as a partner, but the biggest mobile carrier in China, which is also the biggest mobile carrier in the world — China Mobile — still does not offer the iPhone.

Apple has to figure this China Mobile situation out, or its chief mobile competitor is going to continue to own China. It’s not an easy solution, however. It’s already been reported/rumored that Apple is planning to make the next iPhone compatible with China Mobile’s TD-SCDMA 3G network, which is different than almost any other 3G network on earth. As you may imagine, there are pretty important technical hurdles to that.

To make it work, Apple would need to add a specific radio to the iPhone just for China Mobile. Will Apple do that? It’s true that the company has been on a China localization binge lately, adding support for Chinese characters, as well as local search and sharing options for the region on iOS and on the Mac. But adding a separate radio is actually a huge deal. My colleague Kevin Fitchard has a really great explanation as to how hard — and expensive — it would be.

So what about localized hardware? Apple could decide to make a separate iPhone that specifically addresses this hugely critical market that runs on TD-SCDMA.

Either option would be totally out of character — Apple doesn’t make products targeted at a specific carrier or region. It’s why T-Mobile is still out in the cold here in the U.S. But with T-Mobile we’re talking about 33.4 million potential customers who might switch an buy an iPhone. With China Mobile we’re talking about 650 million potential customers.

China Mobile is the biggest mobile carrier in the world. The iPhone is Apple’s most important product. Apple has to figure out how to marry the two, especially if it has identified China as its most important market outside the U.S.

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Steve Jobs to get the Sorkin treatment, plus 4 other Apple stories to read today

Erica Ogg — Wed, 16 May 2012 17:35:42 +0000

With so many people writing about Apple, finding the best stories and reports isn’t easy. Here’s our daily pick of stories about the company from around the Web that you shouldn’t miss:

Get ready for snappy, overlapping dialogue and fast-paced walk and talks with Steve Jobs: The movie adaptation of Walter Isaacson’s Jobs biography will officially be penned by The West Wing and The Social Network writer Aaron Sorkin, reports Slash Film. (This is virtually guaranteed to be less awful than the competing Jobs project starring Ashton Kutcher.)
Sprint CEO Dan Hesse did his best Honey Badger impression during Sprint’s earnings call this morning. Despite shareholder concern about the large investment necessary to sell the iPhone and knowing that it won’t be profitable until 2015, Hesse isn’t worried. According to AllThingsD, he said, “We believe in the long term. And over time we will make more money on iPhone customers than we will on other customers.”
You know how Apple and China Mobile have been in talks for years about offering the iPhone on China’s largest mobile carrier? Well, those talks are continuing, according to the carrier’s new chairman, Xi Guohua. “China Mobile and Apple both have the will to strengthen cooperation,” he said at a company meeting Wednesday, without offering any more specific details, Bloomberg reports.
Greenpeace tries to get Apple’s attention on coal-powered server farms with protestors dressed as iPhones and a pod-like capsule that projected protest messages onto Apple’s Cupertino headquarters on Tuesday. Gizmodo has the (bizarre) pictures.
Washington insiders may be miffed that Apple doesn’t follow standard D.C. practice in lining politicians’ pockets with donations, but the company isn’t a stranger to high-ranking officials. Here’s the latest proof: this photo, posted by Fortune, shows Apple CEO Tim Cook meeting with John Boehner, Speaker of the House of Representatives, on Tuesday.

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Nokia’s 1 billion opportunity: A China Lumia launch

Kevin C. Tofel — Fri, 16 Mar 2012 14:47:03 +0000

Nokia is expected to launch its Lumia smartphone line in China on March 28, according to multiple reports. DigiTimes says that China Unicom, China Telecom and China Mobile will all sell Nokia Lumia handsets; combined, these three operators have nearly 1 billion subscribers. That’s a huge opportunity both for Nokia and for Microsoft, which developed the Windows Phone platform Nokia now uses on new smartphones.

DigiTimes says its information has come from industry sources, but its report follows a similar one from Tech In Asia. Nokia CEO, Stephen Elop, told a Chinese news agency that the first Lumia phone would be available on the 28th of this month. Elop didn’t provide any details of which model or models would be available at that time. However, the Lumia 800 and 719C were reviewed and approved for sale in China by the country’s telecom inspection unit, according to Tech In Asia.

Although there hasn’t been an official Lumia launch date provided, it shouldn’t surprise that Nokia will be pushing its product hard in China. As noted yesterday, China is expected to supplant the U.S. as the world leader in smartphone shipments by the end of this year. India and Brazil, too, are moving up the list as mobile broadband infrastructure matures. Given Nokia’s broad global distribution and worldwide brand recognition, I’d expect Lumia handsets to find their way to those countries soon as well.

Launching relatively low-cost but highly capable smartphones in populous countries could be a boon to Nokia, which has faced sales declines and increased competition from the iPhone and Android handsets. But it could bring even more benefit to Microsoft. The company has tried to start over with its mobile platform, launching the first Windows Phone devices in 2010, but hasn’t yet gained much of a foothold in the smartphone market.

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The big theme of MWC: How to live in a connected world

Kevin Fitchard — Fri, 09 Mar 2012 16:55:38 +0000

It has been just over a week since the Fira de Barcelona gates closed on Mobile World Congress 2012, so now is a good time for a retrospective look at the event. The big thing at MWC wasn’t a phone or new network architecture but the much more subtle shift in focus on how we live in a hyperconnected world. This year the industry seemed to move beyond starry-eyed soothsaying about a world of 50 billion connected devices to start talking about how these mammoth networks of objects and appliances would actually work and how they would be managed.

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Apple gets China Telecom, but China Mobile still out of its grasp

Erica Ogg — Tue, 21 Feb 2012 14:28:54 +0000

Apple’s iPhone 4S will arrive very soon on China Telecom, China’s third-largest carrier. The phone will be available for sale starting March 9. It’s an important step for Apple, which has highly prioritized its business in China, but the number of customers it will reach on that network will pale in comparison to the roughly 650 million Apple could reach by striking a deal with China Mobile.

The China Telecom deal has been in the works for a while. Last month it was reported that only the final steps for the phone to be certified to run on the network remained, and that the deal would be finished by the end of February. By offering the iPhone 4S — of which Apple has sold 37 million units in just three months — to China Telecom’s 15 million customers, Apple stands to add to its already impressive tally for number of iPhone 4Ses sold.

But more importantly, by adding yet another carrier, Apple is moving closer to more fully addressing its second-most important market in the world. It already has China Unicom, where one out of every five of the carrier’s subscribers have chosen the iPhone, according to Morgan Stanley’s Katy Huberty.

The big “get,” however, is China Mobile, which has a 70 percent share of mobile customers in China. The two sides have been talking, but there are still some technical hurdles. Considering how important China is to Apple, it seems like Cupertino would find a way to iron those out eventually.

Apple CEO Tim Cook has been very clear about his commitment to the country and has said he’s “never seen a country with as many people rising into the middle class aspiring to buy products that Apple makes. It’s an area of enormous opportunity.”

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Report: China Telecom Will Finally Get The iPhone 4S In February

Ingrid Lunden — Wed, 01 Feb 2012 17:13:24 +0000

Another piece in Apple’s worldwide expansion looks like it might at long last be coming into view: the leading CDMA operator in China, China Telecom, says that it will start to sell the iPhone 4S by the end of this month or early March.

The report, from the English-language China Daily, says that China Telecom released a statement this week that said it was beginning “preparatory work” to launch the iPhone 4S — the first time that China Telecom would offer one of Apple’s smartphones.

China Telecom has been talking of an iPhone launch for some time now, touting Apple’s work on a CDMA-based device even before the company launched its first non-UMTS handset with Verizon last year. It seems that the big holdup has been getting the right operating licenses for the device. There are three, and they have apparently now all been secured.

If China Telecom does indeed get the device in the next month, it will make it the third CDMA operator to carry the iPhone, after Verizon Wireless (NYSE: VZ) and Sprint (NYSE: S) in the U.S.

Pricing details for the device have not been disclosed but given how iPhone-crazy the Chinese public appear to be, this will probably kick-off a price war for the device — although the carriers’ offerings will likely still come at a premium compared to the cheap knock-offs that one can buy in the country.

The race for 3G subscribers is actually quite close in China: At the moment, the only carrier with the official right to sell the iPhone on its network is China Unicom, the second-largest operator after China Mobile; China Telecom ranks third. Among those, China Unicom is the fastest-growing, thanks in part to the success of the iPhone. Among the three of them, China Mobile still has the most 3G subscribers, with 51.2 million; China Unicom has 40 million; China Telecom has 36.3 million.

The move to add China Telecom as a carrier partner will also make a big difference to Apple’s exposure in the country. China Daily, citing figures from Gartner, notes that Apple (NSDQ: AAPL) currently is the fourth-largest smartphone vendor in the country, trailing behind Nokia (NYSE: NOK), Samsung and Huawei.

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China Telecom could offer the iPhone as early as February

Darrell Etherington — Tue, 31 Jan 2012 16:24:00 +0000

China Telecom is getting very near to launching Apple’s iPhone 4S on its network, the carrier said in a press release Tuesday obtained by China Daily. China Telecom subsidiary Beijing Telecom said a CDMA version of the iPhone 4S will likely be available to its customers by the end of February or the beginning of March.

Apple has been taking preparatory steps in advance of a launch with China Telecom, China’s third largest mobile network operator. Earlier in January, Apple secured regulatory approval to sell a device in China that operates using the CDMA2000 network standard, which is the technology China Telecom uses for its 3G network. At the time, the only step remaining for Apple was to get a license from China’s Telecommunications Equipment and Certification Center to begin selling the device, which it gained on Monday this week.

Earlier this week, Morgan Stanley’s Katy Huberty predicted Apple could grow its iPhone sales by as many as 57 million units in China over the next two years if it succeeds in securing partnerships with China Telecom and China Mobile. China Telecom will offer Apple a potential subscriber pool of roughly 15 million high-end subscribers according to Morgan Stanley’s numbers, approximately doubling its current reach through official partner China Unicom.

The deal hasn’t yet been confirmed by Beijing Telecom’s parent company beyond the report from China Daily, and no pricing details have been released, but the pieces are in place, and there’s little reason to suspect Apple wouldn’t want to expand its presence in China as quickly as possible. No doubt a partnership with China Mobile, which reaches 650 million subscribers and has around a 70-percent share of the Chinese mobile market, is also a priority, but technological factors likely precludes official iPhone support until Apple creates a version specifically for China Mobile’s network.

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