Apple is Losing This Battle

China Mobile (NYSE:CHL) said it had been in talks with Apple (NASDAQ:AAPL) to bring the iPhone to its network, but that a deal was far from being finalized. Yue Li, president of what is the world’s largest wireless carrier by number of subscribers, said it was business-related issues rather than technical limitations that had delayed an agreement between the two companies.

“The business model and benefit sharing still need further discussion,” Li said at a conference in Guangzhou on Wednesday. “We look forward to working hand in hand with Apple.”

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China Mobile currently has 703 million subscribers, of whom 79.3 million are on a 3G network. Analysts have said that Apple would need to add China Mobile to its list of partners if it is to keep up with rivals in the world’s quickest growing smartphone market. An IDC report on Thursday said the iPhone maker’s share of the market in China had slipped in the third quarter to the sixth spot from fourth. Apple’s shares slipped substantially on Wednesday after Nokia (NYSE:NOK) announced a new deal with China Mobile.

“Li’s comment suggests that China Mobile has no intention of simply gifting Apple access to its huge subscriber base without extracting a pound of flesh from Apple,” Singapore-based IDC analyst Teck- Zhung Wong told Bloomberg.

The iPhone is currently available on China Unicom (NYSE:CHU) and China Telecom (NYSE:CHA), which will both see the launch of the iPhone 5 next week.

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