Reuters is carrying a story today suggesting that an imminent deal between
China Mobile has put an advert for the faster 4G mobile network on its website, raising expectations that a long-awaited distribution deal between the world's largest mobile carrier and Apple Inc may be announced as early as next week.
China Mobile's website, on its main page, displayed a cartoon tornado alongside the words "the invasion of 4G" and the dates "November 9-11" (www.10086.cn/1111).
The banner links to a page showing two images of smartphones that resemble iPhones, with the caption: "Special discounts for new handsets? The newest? The biggest discounts?"
My sources tell me that China Mobile's 4G network isn't going to be operative until April, at least that's the most recent date that they had heard. Even then it's only going to be in Beijing and Shanghai at that date. This could be speeded up: the limitation is really how much money China Mobile is willing to firehose at rolling it out.
So, if an Apple deal were announced for 4G it wouldn't have much effect on Apple until the third quarter this financial year.
But it's worth thinking back to what the actual problem is here between the two companies. From China Mobile's side the wariness is in having to sign up to the subsidies on handsets and the marketing expenses that Apple demands. This has long been a bone of contention.
From Apple's side there has been that plus the fact that the company simply didn't make an iPhone that would work on the China Mobile network. That is now fixed with both the iPhone 5s and 5c containing the chipset required to work on China Mobile's upcoming 4G network, based on the TD-LTE technology. Which is fine. But there's more to it than just this.
What Apple would really like is access to those 700 million subscribers to China Mobile's network. And they're not all going to be reached by that 4G network for some time now. So the real deal desired is to gain access to those covered by the TD-SCDMA network, the 3G one. And until the 5s and 5c no iPhone could reach said customers. However, we do actually know that Apple has had the requisite State approvals for iPhones, both a 5c and a 5s, that does indeed work on TD-SCDMA. We even know what the model numbers are.
And that's the deal that would be exciting if it were to come next week (or any other time). An announcement that China Mobile now had agreed on the subsidies issue and that the iPhone 5c and iPhone 5s would now be available, not just for the 4G network, but for the 3G TD-SCDMA one. That might even produce a nice little bump in the Apple stock price.
