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Can Apple Ignore China Mobile's 4G Rollout?

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In a keynote address at the World Mobile Congress in Barcelona China Mobile announced that it would be rolling out its homegrown 4G TD-LTE network to over half a billion people in 100 cities this year.  LG, HTC, Huawei and ZTE will be launching TD-LTE smartphones to support this initative.

While the iPhone 5 does not support TD-LTE you have to expect that Apple has the technology and chips developed to work on China Mobile.  Probably the major issue is can the two companies come to agreement on what price to pay Apple and what levels will subsidies be set.

We have not had an update on how many iPhones are on the China Mobile network since a year ago when the company announced that there were 15 million iPhones on its system.  This was up 5 million from 10 million in September 2011 so Apple is actually doing pretty well with iPhones being used on China Mobile.

The following table outlines Kantar’s market share estimates for various smartphone platforms in Urban China.  Both Apple and Android have been gaining share at Symbian (Nokia) and Windows expense.

Urban China

Sept. 30, '12

Oct. 28, '12

Nov. 25, '12

Dec. 23 '12

Jan. '13

iOS

18.6%

19.9%

19.2%

21.9%

23.2%

Android

65.2%

67.5%

72.2%

72.5%

71.5%

RIM

0.1%

0.1%

0.0%

0.0%

0.0%

Symbian

7.7%

6.2%

4.1%

3.9%

3.5%

Windows

5.7%

4.2%

2.7%

0.9%

1.2%

Bada

0.0%

0.0%

0.0%

0.0%

0.0%

Others

2.7%

2.2%

1.8%

0.9%

0.6%

Total

100.0%

100.1%

100.0%

100.1%

100.0%

Source: Kantar.  Totals may not add to 100.0% due to rounding.

The following table shows that China Mobile has the highest share of wireless customers but the lowest 3G market share.  While I have not seen the churn numbers for these carriers I believe that one of the reasons that China Unicom and China Telecom have higher 3G share is due to carrying the iPhone.

If the iPhone is negatively impacting China Mobile than they will be more likely to come to terms with Apple.  However, if LG, HTC, Huawei, ZTE and others, especially Samsung, can bring lower cost smartphones to market with good enough hardware and applications then it will put more pressure on Apple to come to an agreement.  So far there hasn't been enough pressure on either party to come to an agreement.  China Mobile's 4G rollout could change the landscape enough to get the companies to bring the iPhone to China Mobile's network.

Subscribers

New 3G    January 2013

Total 3G

Total other

Total

3G Share

Total Share

China Mobile

7.1

95.0

620.0

715.0

13%

64%

China Unicom

3.7

80.1

162.8

242.9

33%

22%

China Telecom

3.0

72.1

90.7

162.8

44%

15%

Total

13.7

247.2

873.5

1120.7

22%

100%

Source: Company data

Disclosure: My family and I own Apple shares.