China Mobile president: technology and 'business model' hurdles to carrying iPhone
With more than seven hundred million subscribers, China Mobile as a carrier is practically a nation unto itself. In fact, China Mobile has enough subscribers that it'd be the third most populous nation on the planet, with approximately half of China's residents as subscribers and more than twice as many people than reside within the borders of the United States. As such, it's a tempting target for anybody considering worldwide smartphone domination. There's just one problem: China Mobile's network is built on TD-SCDMA technologies, and TD-SCDMA is only used by China Mobile (China Telecom uses regular CDMA and China Unicom is on UMTS).
Standards and protocols are problems that can be overcome with technology. As it stands right now, Apple's iPhone has yet to gain support for TD-SCDMA, though the iPhone 5 supports just about every other widespread form of wireless network, including the global mess of LTE networks (so long as they deem it worthy), though not yet China Mobile's unqiue TD-LTE. Considering the multitude of wireless networks supported in a single device, it seems perfectly reasonable to expect that Apple could produce an iPhone with support for TD-SCDMA, but first they need reason to do so (though the millions of iPhone users on China Mobile anyway might have something to say about that).
The relationship between China Mobile and Apple has been a strange one to watch unfold over the years. According to c114, China Mobile president Li Yue recently spoke about his company's ongoing talks with Apple, which he said have been going on since 2009, and have become "more intimate" in the last year (the same talks were confirmed back in May of this year). While the technology stumbling block would be acknowledged by anybody involved, Li says that it's not just technology that's holding things up - there's the whole issue of money too.
"Technology is a problem, but it isn't the entire problem; there's also mainly the issue of business model and mutual benefits."
What exactly Mr. Li meant by business model and mutual benefits isn't entirely clear, though it's safe to assume it's probably some mixture of revenue sharing and carrier subsidies. And therein lies the problem - Apple is used to demanding and receiving high subsidies from carriers to carry the iPhone - China Mobile is not. And while China Mobile is used to demanding and receiving a revenue sharing agreement for transactions completed on devices using their network, Apple is most decidedly not in favor of such an agreement.
This is what an impasse looks like. With 700 million subscribers, China Mobile is very much used to getting their way. Apple, too, is used to getting their way - just look at a Verizon iPhone for any hints of the carrier's checkmark logo that bedecks other smartphones in Big Red's stable. Immovable object, meet unstoppable force.