Apple may be nearing an iPhone deal with China Mobile

Apple (NASDAQ:AAPL) and China Mobile have spent months trying to work out some way for the Chinese carrier to offer its customers the iPhone, and it appears the two may finally be closing in on a deal.

Apple CEO Tim Cook has been to China twice this year and last month met with China Mobile Chairman Xi Guohua in Beijing, according to Reuters. Last week, Xi told reporters after announcing China Mobile's half-year results that the carrier is in active negotiations with Apple. "There are still some commercial and technology issues that need time to resolve," Xi said.

Apple has been reticent about reworking the iPhone to support China Mobile's homegrown TD-SCDMA 3G technology, while the carrier has taken issue with the marketing and subsidization costs it would incur to promote the iPhone in China, where regional smartphone producers rule the market.

Apple's TD-SCDMA issue may be solved through the use of new chips from Qualcomm (NASDAQ:QCOM) that support the technology, Reuters suggested. Qualcomm also offers chips that support FDD-LTE and TD-LTE, with the latter being China Mobile's chosen next-generation mobile technology.

More than 100 devices are already being developed for China Mobile's planned TD-LTE network, said CEO Li Yue, who was quoted by Bloomberg.

China Mobile has 740 million users, or 63 percent of China's mobile market. Apple's iPhone is carried by second-ranked China Unicom and China Telecom, the third-ranked carrier.

South Korea's Samsung led the smartphone market in China during the second quarter with an 18 percent market share and was followed by five Chinese handset makers, according to research firm Canalys. Apple is ranked seventh in the market, with a 5 percent share.

Apple is expected to introduce its latest iPhone on Sept. 10 and is widely rumored to be planning a cheaper model for sale in emerging markets.

For more:
- see this Reuters article
- see this Bloomberg article
- see this WSJ article (sub. req.)
- see this CNET article
- see this PC Mag article

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