Is China Mobile’s Network Ready for the iPhone?
Will China Mobile’s (NYSE:CHL) iPhone launch be hampered by technological issues? Although Apple (NASDAQ:AAPL) has yet to confirm any deal with the world’s largest carrier, rumors of a pending distribution deal with China Mobile are continuing to swirl.
Speculation about an upcoming deal between the two companies recently got a boost when the Wall Street Journal cited unnamed sources that said Apple was preparing to ship lower-cost iPhones to China Mobile. The report noted that this iPhone shipment was an indication that a deal had already been made.
However, KGI Securities analyst Ming-Chi Kuo believes that even if a deal has been made, China Mobile may have to delay the release of its versions of Apple’s upcoming iPhone models due to its incomplete TDD-LTE network. In a note to investors via Apple Insider, Kuo estimates that the unfinished network could delay the launch of a China Mobile iPhone by one or two months.
Kuo’s estimated launch date for China Mobile’s iPhone is in line with the November 28 launch date given by China’s First Financial Daily. However, the Chinese news daily cited a regulatory holdup as the reason for China Mobile’s two-month delay.
Reuters reported last month that China Mobile Chairman Xi Guohua stated at a company meeting,“We are actively negotiating and both sides are keen. There are still some commercial and technology issues that need time to resolve.” The “technology issues” that Guohua cited may have been a reference to China Mobile’s unfinished 4G network.
This delay could give China Mobile’s rivals an advantage since some of China’s other carriers use a different mobile technology standard. Kuo also noted that China Mobile is likely to release the flagship iPhone before the lower-cost iPhone for marketing reasons.
“As China Mobile hopes to use iPhone 5S as the flagship model for promoting its TDD-LTE network, it would come as no surprise if the TDD-LTE version of iPhone 5S launches before iPhone 5C,” wrote Kuo via Apple Insider.
Apple’s iPhone 5C is expected to broaden Apple’s footprint in the world’s largest smartphone market. Kuo previously predicted that the iPhone 5C will sell for approximately $400 to $500, pricing it as a mid-range device in China’s smartphone market.
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