China Mobile says iPhone deal with Apple is not final

China Mobile said it has not yet finalized a deal with Apple (NASDAQ:AAPL) to support the company's iPhones on its network, seeming to undercut a Wall Street Journal article from earlier this week that said a deal had been struck after years of wrangling.  

"We are still negotiating with Apple, but for now we have nothing new to announce," China Mobile spokeswoman Rainie Lei told Reuters, declining to elaborate. Apple declined to comment, according to Reuters.

The Journal report, citing unnamed sources familiar with the matter, said that the iPhone launch is expected to start later this month, around a Dec. 18 China Mobile event. Previous Chinese media reports have pegged Dec. 18 as a launch date for China Mobile's TD-LTE service.

At the Dec. 18 event, China Mobile is expected to announce a brand for its TD-LTE service. China Mobile executives have said they would only begin to sell the iPhone after introducing TD-LTE service, the Journal reported. On Wednesday, China's Ministry of Industry and Information Technology issued licenses for the TD-LTE standard to the country's three carriers, China Mobile, China Telecom and China Unicom.

Although China Mobile has not announced the deal, it seems likely that one is in the offing given the developments surrounding China Mobile's TD-LTE launch and the fact that Apple's new iPhone 5s and 5c support China Mobile's TD-LTE standard.

Analysts have started speculating how many iPhones China Mobile, with its 740 million subscribers, could sell once a deal is formalized. Research firm Trefis said China Mobile could sell about 1.5 million iPhones per month, which would mean almost 20 million additional iPhone activations for Apple in 2014, according to the Journal.

Meanwhile, Piper Jaffray analyst Gene Munster estimates that Apple could sell 17 million total iPhones on China Mobile next year, which would be around 10 percent of the carrier's 3G subscriber base, according to AllThingsD. The high price of the new iPhones could crimp adoption, Munster noted, adding that the average unsubsidized cost of a smartphone on China Mobile is about $270, much lower than the $718 and $846 unsubsidized prices of the iPhone 5c and 5s, respectively.

Cantor Fitzgerald analyst Brian White is estimating 2014 China Mobile iPhone sales of 20 million to 24 million units. Wedge Partners analyst Brian Blair is predicting sales of 18 million to 20 million.  Blair said he thinks the true test of iPhone's success in China will come down to marketing.

"We expect a strong marketing push to follow the official announcement, and that is what is critical," Blair told AllThingsD. "It's Apple's job to turn the Chinese consumer away from entrenched brands like Samsung."

For more:
- see this Reuters article
- see this AllThingsD article
- see this AppleInsider article

Related Articles:
Report: Apple finally strikes iPhone deal with China Mobile
China grants TD-LTE licenses, clearing the way for iPhone on China Mobile
China Mobile confirms TD-LTE suppliers, as iPhone goes live
Apple nears clearance for China Mobile's TD-LTE network
Rumor Mill: China to be among first markets for iPhone 5S/iPhone 5C

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