A long awaited agreement between Apple and China Mobile was announced Monday bringing the iPhone to China Mobile, the worlds largest phone company. The iPhone is currently available in China but is carried by two smaller carriers. After this new deal the smartphone will connect with a larger network and improve the state owned China Mobile Ltd.’s strength in the market.
While the iPhone is very popular in China, it remains overshadowed by more affordable phones from Samsung to other local brands. The Chinese Lunar New Year is in late January and this deal will help in the gift giving season. Nicole Peng, of Canalys research firm considered the U.S. holiday season and the end of the fiscal year in conjunction with the Lunar New Year, and commented, “that will provide an immediate boost to Apple’s share in China.” There has been no announcement from either companies on pricing or the terms of the agreement.
iPhone sales are expected to rise from 10 million to 40 million under the deal, depending on users switching to China Mobile. Tim Cook, Apple’s CEO said he expects China to surpass the United States as it’s biggest market. Analyst’s have estimated 50 million iPhones have been sold in China in just 2 1/2 years.
The iPhone was very popular in China with the 4s model, but with the September’s release of the 5s model, customers weren’t overly impressed saying it had too little to offer with little improvements. Apple’s share of China’s smartphone fell to 6.2 percent in the third quarter. A year earlier it was at 7.9 according to Canalys. Samsung’s went from 14.1 percent to 21.2 percent in the same period.
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