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Apple and China Mobile have finally hammered out a multi-year sales agreement after years of thorny negotiations.
It would enable Apple to sell the iPhone in China and boost its profit and build customer royalty.
Apple’s smartphone is already available in China through two smaller carriers, China Telecom and China Unicom. Although it is popular with well-heeled Chinese consumers, the iPhone is losing market share to lower-priced smartphones from Samsung and local brands.
Analysts doubt the China Mobile breakthrough will prompt Apple Inc. to introduce an extremely cheap iPhone as the Cupertino, Calif., company clings to a higher standard of quality. That approach is likely to ensure that smartphones running Google’s Android software remain the top-selling devices in China.
Even so, investors are pleased to see Apple fill a gaping hole in the iPhone’s sales network. But even with China Mobile Ltd.’s vast state-owned network, marketing power and massive customer base, the iPhone still faces significant hurdles in the world’s most populous nation.
Analysts predict that the China Mobile deal will help Apple sell anywhere from 10 million to 40 million iPhones next year. Those numbers should help Apple increase its iPhone sales volume from 150 million devices in its last fiscal year, but it won’t make that much of dent in overall market share. Now, more than 80 percent of the smartphones sold around the world run Android, compared with 13 percent for the iPhone, according to the research firm International Data Corp. More than 1 billion smartphones were sold in 2013 alone, including 528 million in Asia, according to IDC.
The iPhone 5S and 5C will go on sale in Apple and China Mobile stores beginning Friday, Jan. 17. China Mobile customers can register for phones starting Wednesday.