Apple Inc. (NASDAQ:AAPL) chief executive Tim Cook’s visit to China appeared to meet with success as reports of his meetings with the world’s largest mobile carrier China Mobile Ltd. and the Chinese minister for industry and information technology circulated Jan. 9. In his second visit to China in 10 months, Cook hoped to ink a deal with China Mobile that would give Apple (AAPL) access to a massive subscriber base, increasing Cupertino’s market share in the world’s largest smartphone market.
“In the morning, Apple’s CEO Tim Cook visited China Mobile’s headquarters,” China Mobile spokesman Li Jun said in an emailed statement. “China Mobile’s Chairman Xi Guohua and Tim Cook discussed matters of cooperation.”
The statement provided no additional details of the meeting, however, due to a signed confidentiality agreement.
Apple Inc. (NASDAQ:AAPL) currently has deals to sell iPhones with Chinese carriers China Unicom and China Telecom. But China Mobile uses a different 3G network from the rest of the world, and lacking a deal with the carrier has harmed Apple’s revenues in the nation as users have changed to other smartphone brands such as Samsung and Lenovo to sign on with the larger carrier, and Cupertino has slipped from fourth place to sixth in market share.
“They have been too slow to point points of sale,” Shaun Rein, managing director of China Market Research Group in Shanghai told Bloomberg. “We’ve also seen the introduction of tons of cheaper smartphones on Android.”
Should Apple launch a smaller, less-expensive version of the iPhone later this year—as recently speculated—the move could certainly help it gain cash-strapped Chinese customers. A more affordable iPhone would help Apple Inc. take market share from Android and its cheaper models, which made up 75 percent of smartphone shipments in China in the third quarter.
Apple INc. (NASDAQ:AAPL) may wait for China Mobile’s network to be commercially-viable before inking an agreement with the world’ largest carrier to launch the iPhone, however.
“There is a small chance that Apple (AAPL) and China Mobile will reach an agreement within six months, since China Mobile is sticking to a homegrown telecommunications standard that Apple does not support,” Garntner China telecom analyst Sandy Shen told China Daily, adding the issue will likely be resolved once China Mobile rolls out its 4G TD-LTE network.
Currently, Apple has 11 stores in China and Hong Kong—up from six the last time Cook visited the nation. Still, China is Apple’s second-largest market after the U.S. with $5.7 billion in sales for the third quarter of 2011.
“Currently, Apple Inc. (NASDAQ:AAPL) has 11 stores in the Greater China region, as well as many resellers,” Cook told Sina Technology News. “We will continue to expand in China and the number of retail stores we’ll have will exceed 25.”
Cook also met with government officials—including head of the Ministry of Industry and Information Technology Miao Wei—in China, as well as executives at partner China Unicom. Although the details of those meetings remain unknown, Cook later confirmed the cellular version of the iPad mini will launch in China by the end of this month.
Cook acknowledged that devices take longer to arrive in China because of the nation’s longer approval time. But after the cellular models of Apple’s newest tablets received network licenses in December, Wi-Fi only versions of the iPad mini and fourth-generation iPad went on sale in China Dec. 7. Cook told reporters he hopes to shorten the approval time for Apple Inc. (NASDAQ:AAPL)’s products in the future and promised to continue working on the issue.
