China Mobile-Apple Deal on Dec 18? Could China Mobile Really Live Up to the Promise of Surging Phone Sales for Apple?

By @ibtimesau on

Elsewhere around the world, Dec 18 might just mean another regular, ordinary day. But for the telecom sector, most especially China's telecom sector, it could mean a historic day. Reports are rife that China Mobile may announce on Wednesday its long anticipated deal with Apple Inc. (AAPL).

The announcement on the deal, according to a report by the WSJ, could coincide with China Mobile's roll out of its fourth-generation (4G) wireless network.

A man talks on an iPhone in Beijing in this July 24, 2013 file photo. For all the hype, Apple Inc's long-awaited iPhone agreement with China Mobile Ltd may deliver little more than a fleeting revenue jolt for the U.S. giant. A deal with the world's largest mobile carrier, expected as early as this week, nets Apple 759 million potential new customers that could generate $3 billion in 2014 revenue, or nearly one-quarter of Apple's projected revenue growth in its current fiscal year. REUTERS/Kim Kyung-Hoon/Files

On Monday, the AP reported that China Mobile's Web site was seen taking orders for "Ming Xing," or Bright Star, a mystery phone that looks like iPhone. Pre-orders for the unit actually began Thursday last week. On Dec 5, China Mobile received government regulatory approval to start operating the world's fourth-generation network, effectively laying the marketing groundwork for the mystery phone.

Analysts have been quick to calculate Apple easily stands to gain between 12 million to 15 million phone sales in the first full year alone of its deal with China Mobile.

"They need China Mobile more than China Mobile needs them," Jane Zhang, an analyst with Gartner, told AP.

However, if based on its 3G program, China Mobile really has yet to prove if it can substantially bring in the bacon for Apple.

Compared with China Unicom and China Telecom, China Mobile only has 176 million 3G users, representing a measly 23 per cent from total subscribership. China Unicom and China Telecom holds 40 per cent and 50 per cent 3G penetration, respectively.

"If China Mobile's track record remains consistent, 4G adoption will be an uphill battle," reported.

China Mobile has announced its 4G program will be initially available only at Beijing, Guanzhou and Chongqing during the launch. Shanghai has yet to complete its 4G network construction.

The Chinese telecom firm still has to announce other areas for 4G adoption.

Based on this, it will be a wonder how China Mobile would be able to give the much hyped 12 million to 15 million phone sales to Apple in the deal's first year of implementation.

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