Apple considering China Partnership

China Mobile CEO Wang Jiangzhou has revealed that Apple and China Mobile are seeking an exclusive partnership to launch Apple to the Chinese masses.

Apple cannot ignore China which is estimated to reach 600 million mobile subscribers, making it by far the biggest market in the world.

However, Apple and China companies disagree over the profit sharing concept that Apple has been able to push on to other mobile companies like AT&T or O2.

There are several reasons for that :

(a) The Average Revenue Per User for Chinese users is already lower than in Europe or the US and if Apple take a share of it, it will dent the profits of Chinese mobile companies

(b) The cost of the iPhone as it stands is prohibitively high which means that the level of penetration is expected to be low

(c) Psychological barriers: As one executive told Reuters, it is a Chinese rule not to share revenue

(d) Why go to the iPhone when Chinese firms have been copying, duplicating and churning out so many iPhone clones for much cheaper and without profit sharing.

China Mobile alone is worth nearly 350 million users with Unicom a distant second with nearly 160 million subscribers and although both do not have any immediate plans to debut the iPhone, they have both diplomatically announced that they remain opened to the idea.

Alleyinsider has analysed the financial impact that a potential Chinese partnership could have on Apple's revenues and found out that this could add at least USD 600m per annum in the worst case scenario.

Apple has yet to launch the iPhone in other parts on Asia. There have been rumours of a launch in neighbouring India but nothing concrete has emerged.