Just one week before the iPhone 3G is set to make its debut onto store shelves worldwide, it appears that Apple has finally agreed on a deal with China Mobile. According to a recent article that appeared in Reuters UK , Apple has relinquished its demand for a share of the content fees, while China Mobile has agreed to offer users subsidized rates to purchase the iPhone.
By backing down on its demands for mobile content revenue sharing, it looks like Apple has learned first hand of the strength that China Mobile holds in the telco markets here in China, and that they cannot bully them with revenue sharing and mobile content particulars like they do with operators in the US and in other markets. This is a pretty big concession on the part of Apple to enter the China market, though I wonder if it was necessary.
Since most phones are purchased at retail stores rather than at China Mobile stores, why would Apple even bother striking a deal with the mobile operator to sell in their outlets? I highly doubt the reason is because of the subsidy China Mobile is supposedly offering users because the price of iPhones is actually on par (or even cheaper than) other high end smartphones in China. With the strong sales of smartphones and other high-end phones in China, a significant segment of Chinese consumers have proven they would pay upwards of RMB 4-6k for a mobile phone.
Given so, I suspect that Apple may just be making a deal to get “in”
with China Mobile, to start a positive working relationship until 3G is
rolled out, operator resturcturing is concluded, and the mobile market
becomes more competitive. Down the line, Apple may have more leverage
to negotiate a part of the mobile content revenues into their
partnership.
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