Apple Courts China Mobile, Faces Branding Challenges

Apple is reportedly inching closer to a deal with China Mobile to sell its iPhones to the carrier's estimated 740 million subscribers, with a rumored low-price handset coming later this year potentially the key to such a deal.

Cupertino is expected to unveil its next-generation iPhones on Sept. 10. Included in the mix, rumor has it, will be a lower-priced version of the handset that doesn't include the Siri voice assistant and which uses a Qualcomm chipset compatible with China Mobile's TD-SCDMA 3G network.

Since Apple's pre-iPhone 5 handsets don't work with the TD-SCDMA protocol, the company doesn't do business with China Mobile, which has nearly 65 percent of China's cell service subscribers. But that could soon change, according to Reuters.

China's two other state-run telecoms, China Telecom and China Unicom, both sell Apple's iPhones.

Reuters said the availability of a TD-SCMA-compatible iPhone as well as the expected rollout of a TD-LTE-based network for 4G service in China means that the "stars may be aligning for a long-awaited deal between Apple and China Mobile."

Courting the world's biggest carrier could be more important for Apple than ever. The iPhone is now lagging behind Apple rival Samsung's smartphones in China in market share and some key customer awareness metrics.

Earlier this year, reports suggested that Apple is seriously lagging behind rival Samsung in China, with smartphone market share in the single digits compared with Samsung's nearly 25 percent share of the China market.

Meanwhile, branding researcher TrendForce's most recent survey found that Samsung's products have eclipsed the iPhone as the "most anticipated smartphone purchase" in Chinese consumers' eyes, a metric Cupertino owned just a few quarters ago. Apple also came in second to its South Korean rival in "most used smartphone brand," while edging a rapidly climbing Samsung by just 1 percent in overall brand recognition among those polled by TrendForce.

Apple is now "vastly behind the Korean giant" in Chinese consumer preference metrics "and reveals a continuously declining popularity," the research firm said.

Striking a deal with China Mobile at long last could potentially tip some of those metrics back in Apple's favor. And the iPhone maker has certainly been trying to come to an agreement with the carrier in recent months, according to reports.

Apple CEO Tim Cook reportedly met with China Mobile chairman Xi Guohua in Beijing last month to discuss a partnership with the only major Chinese carrier that doesn't offer the iPhone.

Cook and Xi met at China Mobile's Beijing headquarters on July 30, according to Bloomberg. It was the second meeting between the two men this year.

Cook and Xi last met in January to discuss a possible partnership. The two executives discussed "matters of cooperation" at the Jan. 10 meeting, a China Mobile spokesman said at the time, but no deal was struck.

Though Apple now has a foothold in China thanks to its deals with China Telecom and China Unicom, the bulk of the country's estimated 988 million mobile users will remain tantalizingly off limits for Cupertino until an agreement with China Mobile is reached.