According to multiple reports, Apple has agreed to a long-simmering deal with China Mobile, the largest mobile phone carrier in the world's most desirable burgeoning market – just in time for Chinese New Year.
Come January 17, China Mobile will begin selling Apple's iPhone 5S and 5C models with its 4G & 3G networks. According to recently monthly subscriber counts, China Mobile has 763 million total subscribers, which is up 8 per cent from the year before. It's not growing as quickly as its competitors, but the relative immobility is the curse of being the king – something Apple knows all about.
This year, the formerly unimpeachable Cupertino champ struggled more than ever in the face of South Korean competitor Samsung. Even though they were shipping more iPhones, the rapidly expanding market (up 46 percent, or almost 80 million units) in places like China – and Apple's lack of a meaningful toehold in it – meant that it actually lost international market share.
Obviously, getting significant inroads to the Chinese marketplace is a huge deal for Apple, and some experts estimate this could mean as many as 30 million more sales from China next year alone and could represent as much as a $3 billion bump in 2014 revenue.
Indeed, this is a move that will undoubtedly take a big bite out of Samsung's major momentum-building year. Samsung had Chinese inroads of its own, as it is the largest smartphone provider in China with a 21 percent market share in the third quarter compared to Apple's 6, and many see this as setting up China as a prime battleground for smartphone supremacy.
Samsung does have the advantage in marketing dollars – it devotes 5.4 per cent (around $14 billion) of its revenue on advertising, compared to Apple's 0.6. And it remains to be seen whether Apple can understand the Chinese market, which is a different beast than the American one: the Android app market is far more active there than it is in North America, and Chinese consumers prefer cheaper handsets, according to the Financial Review. Android phones have been selling for as much as one-seventh of the price of the cheapest iPhone.
Nevertheless, Apple CEO Tim Cook had this to say after the long-considered deal was finally struck:
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. IPhone customers in China are an enthusiastic and rapidly growing group, and we can’t think of a better way to welcome in the Chinese New Year than getting an iPhone into the hands of every China Mobile customer who wants one.
This article is from the archive of our partner The Wire.
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