It’s official: Apple and China Mobile are besties now. China Mobile, China’s largest mobile carrier and one of the last major global carriers to hold out on the iPhone, has signed a deal to start offering iPhones to its subscribers. The news comes shortly after China Mobile quietly began to take pre-orders for the iPhone.
The deal will do big things for Apple’s worldwide market share, which fell to 12% in the third quarter from 14.3% last year. Currently, Samsung holds the lead in global market share with 32.1%.
Samsung is also the largest smartphone player in China, accounting for 21% of the market. Meanwhile, Apple was languishing as the seventh most popular smartphone maker in China, but has since clawed its way up to fifth place. It still only accounts for 6% of the Chinese market, according to Canalys. Nevertheless, China remains Apple’s third largest market.
With the launch of the iPhone 5S and 5C, Apple made significant strides to put emphasis on the Chinese market—even holding a separate Beijing unveiling event. And for the first time, China was listed in the first batch of countries that would get the new iPhones. Consequently, iPhone shipments to China grew by 32% in the third quarter.
China Mobile accounts for 70% of the mobile services market in China and reaches more rural Chinese consumers than its competitors do. China Mobile currently has some 759 million subscribers. That’s seven-times the size of Verizon’s subscriber base.
Many speculated that a deal was on the horizon when China Mobile was recently granted a 4G license. Apple had reportedly been reluctant to entrust its iPhones to the carrier’s previous 3G network. China Mobile’s smaller rivals China Unicom Hong Kong Ltd. and China Telecom Corp. have been selling iPhones since 2009 and 2012, respectively, using different 3G technology.
UBS has forecasted that Apple could sell 17 million iPhones through China Mobile next year, two-thirds of which would be iPhone 5C.
Meanwhile, research firm Trefis believes Apple could potentially sell 1.5 million iPhones per month in China, adding up to some 20 million new iPhones in China in 2014.
Rumors of a deal have been mounting for months. Tim Cook met with China Mobile Chairman Xi Guohua in July, and Apple’s been posting a bevy of job openings in China on LinkedIn. Apple is also reportedly making plans for an engineering and R&D center in Taiwan.
While there have been concerns over the iPhone 5C’s relatively high price point in China, where iPhones aren’t subsidized, a recent survey by Morgan Stanley and AlphaWise found that Chinese consumers would be prepared to pay as much as Rmb 4,000 ($653) for an iPhone 5C.
Apple shares were up 1.53% Thursday morning to $573.
Image source: jana.com