Why would China’s state-owned media suddenly be on attack status against Apple and its popular iPhone? Marketwatch scribe Craig Stephen has an interesting theory. He thinks the country’s #1 carrier, China Mobile could definitely benefit from Apple being knocked off of its lofty perch.
…there is another party that could benefit from Apple being taken down a peg or two. Enter China Mobile (HKG:HK:941) (NYSE:CHL) , the world’s largest wireless operator, with 710 million subscribers. These two giants have been reportedly locking horns for some months as they seek to agree to terms for Apple to provide next generation iPhones.
There is no doubt that the iPhone maker is a tough nut to crack, wireless carriers around the world would probably agree that Apple can be hard to deal with, but when you have something everyone wants you can deal from a position of strength. But what if the Cupertino firm could be taken down a few notches while China Mobile was negotiating with them for the iPhone?
China Mobile needs the iPhone, even though it currently has two-thirds of China’s wireless users. The carrier needs the device so it can up the pace of customer upgrades to its newer networks.
China Mobile offers a home-grown version of 3G, known as TD-SCDMA. The government has invested huge amounts of money as well as political capital in its success. Stephen notes that China Mobile was drafted to commercialize this standard. “But while authorities can tell operators what technology standards to use, they can’t yet tell Chinese consumers what handsets to buy,” notes Stephen.
The latest figures show that while China Mobile has reached around 100 million 3G subscribers after three years, its much smaller rival China Unicom, who already has a deal with Apple, had 83.5 million customers and is upgrading them at a faster pace.
China Mobile needs to increase its rate of upgrades as it starts paying for a 4G build-out. If China Mobile can’t get the iPhone, it could start losing customers to other carriers that do offer the popular handset.
It’s true that Apple would obviously want China Mobile as a partner, but China is already Apple’s fastest growing market, even without a deal with the largest wireless carrier.
It’s likely the crucifying of Apple in the Chinese press is due to many factors, but it would give China Mobile an edge, in what are surely tough negotiations, if Apple were brought down a notch or two.
What do you think readers? Could the state-owned Chinese press be beating on Apple in order to give China Mobile a little more leverage in the marketplace? Or, is it simply an attempt to give China’s home-grown cellular phone manufacturers a better chance to compete with Apple? Let us know what you think in the comments section below.