Apple Inc. (AAPL) is offering its newest iPhones through China’s smaller wireless carriers and has yet to announce a deal with China Mobile Ltd. (941), which has a customer base more than twice the size of the U.S. population.
The two new devices, the iPhones 5S and 5C, are both being released in versions for the networks of China Unicom (Hong Kong) Ltd. (762) and China Telecom Corp. (728) starting this month, Apple said on its China website after the handsets were unveiled by Apple Chief Executive Officer Tim Cook. China Unicom, the second-largest domestic carrier, and No. 3 China Telecom already sell Apple handsets, with both operators dwarfed by China Mobile.
The agreements will make Apple’s new smartphones available to about 37 percent of the nation’s 1.2 billion wireless subscribers as it competes with local rivals including Lenovo Group Ltd. (992), ZTE Corp. (763) and Xiaomi Corp. Smartphone makers offering handsets for as low as $100 helped erode Apple’s market share to 5 percent in the second quarter from about 9 percent a year earlier.
“The iPhone will still be a premium product in China,” Anand Ramachandran, a Hong Kong-based analyst with Barclays Plc., wrote in a report yesterday. “China Unicom and China Telecom’s strategies have moved to harness higher mass-market smartphone adoption and usage momentum rather than fighting for premium share alone.”
Xiaomi Handsets
The lower cost iPhone 5C that can run on the networks of China Unicom and China Telecom will be priced between 4,488 yuan ($733) and 5,288 yuan, Apple said on its website. Xiaomi’s newest handset costs 1,999 yuan. Lenovo’s flagship K900 IdeaPhone sells for 3,299 yuan.
The iPhone 5S for both carriers will cost between 5,288 yuan and 6,888 yuan, according to the site.
The Cupertino, California-based company is close to securing a deal with China Mobile and is preparing to ship iPhones to the carrier, a person with knowledge of the matter said last week.
Apple unveiled its new products at an event in Beijing today, the first time China has been included in a global product release by Apple. The event featured only a rebroadcast of the earlier U.S. event with Chinese translation, no questions were taken and Apple spokeswoman Carolyn Wu declined to comment on the status of talks with China Mobile.
Rural Markets
Calls to the press office of China Mobile in Beijing and spokesman Zhang Xuan’s mobile phone weren’t returned. Zhang and Hong Kong-based China Mobile spokeswoman Rainie Lei didn’t respond to e-mailed requests for comment.
Shares of China Mobile fell 1.4 percent to HK$86.60 as of the trading break in Hong Kong. China Unicom was unchanged and China Telecom fell 1.7 percent.
China is one of Apple’s largest markets, generating about $25 billion in the past four quarters, yet sales there fell 14 percent last quarter. A low-cost handset will help the company boost sales in rural areas, where more than 650 million people live, according to government data.
China Mobile’s 745 million wireless subscribers accounted for 63 percent of the nation’s users as of the end of July, according to data compiled by Bloomberg. China Unicom trailed with 266 million subscribers, while China Telecom had 177 million.
China Unicom began offering the iPhone in November 2009, and China Telecom followed in March 2012.
Making the iPhone available through China Mobile will be critical for Apple’s campaign to regain market share, said Jan Dawson, chief telecommunications analyst with the New York office of London-based researcher Ovum. Samsung Electronics Co. (005930) is the top smartphone seller in China, followed by Lenovo, researcher Canalys said.
“It’s key for Apple to be able to find ways to drive growth at a higher rate again,” Dawson said in an e-mail before the announcement. “Getting China’s biggest carrier on board and launching a cheaper version of the iPhone are both key to doing that.”
To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net
To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net
China Mobile Store
Tomohiro Ohsumi/Bloomberg
A pedestrian walks past a monitor showing phone numbers for sale outside a China Mobile Ltd. store in Dalian, China.
A pedestrian walks past a monitor showing phone numbers for sale outside a China Mobile Ltd. store in Dalian, China. Photographer: Tomohiro Ohsumi/Bloomberg
Sept. 10 (Bloomberg) -- Tim Cook, chief executive officer of Apple Inc., and Phil Schiller, senior vice president, speak about the new iPhone 5C, which will start selling at $99 with a two-year contract and come in five colors. They speak at Apple's headquarters in Cupertino, California. (This is an excerpt from the event. Source: Bloomberg)
via apple - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNE1erixULYPWCRNnWuTFNug8k4G4w&url=http://www.bloomberg.com/news/2013-09-10/apple-offers-new-iphones-for-china-s-two-smaller-carrers.html
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