China Mobile, the largest carrier in China and what would be the crown jewel for Apple, might be suffering by not offering the iPhone to customers, an analyst claims.
In a note to investors, Evercore Partners analyst Rob Cihra said that he believes "China Mobile could be starting to need the iPhone more." He pointed out that China Mobile's 3G market share was down 7 percent year over year to end 2012 at 37 percent. The company's chief competitors, China Telecom and China Unicom, combined for a 7 percent gain to land at 63 percent.
"China Unicom alone has added nearly 2 million more 3G subs than China Mobile year-to-date despite being almost 1/3 the size, and overall share losses look to correlate with introduction of the iPhone in Mainland China," Cihra said in the note, which was obtained and first reported on by All Things Digital.
Apple has for years been trying to woo China Mobile. The carrier currently has approximately 700 million subscribers across China, dwarfing its closest competitor, China Unicom, which has 236 million subscribers, and creating a potentially huge opportunity for Apple. However, China Mobile and Apple have been unable to come to terms. It's believed that China Mobile has held out for better terms, citing its massive size as the main reason Apple must play ball.
Last month, China Mobile President Li Yue confirmed that his company has been in talks with Apple since 2009. Li said that a snag in making the deal happen is that China Mobile uses a TD-SCDMA network that's incompatible with the iPhone 4S and iPhone 5. And although that issue can be overcome somewhat easily, Li said that "the business model and benefit sharing still need further discussion" before they can sign a deal.
Li didn't elaborate on what kind of "benefit sharing" his company is seeking, but it's been rumored that China Mobile wants a cut of the revenue Apple generates through its App Store on all China Mobile customers. Apple has never offered such a deal to other carriers.
Still, if Cihra is correct, China Mobile might have no choice but to temper its terms.