China Mobile president: technology and 'business model' hurdles to carrying iPhone

China Mobile president: technology and 'business model' hurdles to carrying iPahone

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.

Source: c114 (translated); via Engadget

Derek Kessler

Managing Editor of Mobile Nations, Army musician, armchair pundit, and professional ranter.

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There are 5 comments. Add yours.

Carioca32 says:

With 700 million users, just imagine if Nokia/Microsoft manages to get its foothold there. They just won't need the rest of the world, and will still be one of the world top players, if not the very top.

For Apple, it is their way or the highway, China Mobile has no reason to change anything with other platforms to chose from who are not so picky in terms of technology and profit. And the highway would throw away all the expected growh Apple stockholders have been expecting. For Samsung, Google and Nokia, this is the perfect batteground to beat Apple.

greasyspoon says:

Remember, Apple was the hero everywhere else because they broke the carrier stranglehold on bloatware, software updates and design. This carrier is the only one left who can tell customers and vendors to go firetruck themselves.

But, the fact that they acknowledged the Apple issue, shows the cracks in the foundation.

green_ember says:

Apple's problem is that China Mobile doesn't need them nearly as bad as Apple needs China Mobile

greasyspoon says:

Apple doesn't need china mobile. They only have slightly less money than God. China mobile doesn't want to do its customers a solid and find a way to let them get iPhone's.

Carioca32 says:

China Mobile alone has almost seven times the number of worldwide active iPhone users.

Trust me, Apple needs China Mobile.