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Apple (Nasdaq: AAPL) is working hard to break into the market for mobile phones in China. The company is reportedly in talks with China Mobile, which has more mobile subscribers than any other company in a world -- a mind-blowing 350 million.
Of course, Apple wants in.
While Apple has previously discussed plans to enter Asian markets in 2008, the company's latest moves came to light after Wang Jianzhou, China Mobile's CEO, spoke to reporters at the GSM Association's Mobile Asia Congress in Macau.
Jianzhou was quoted saying Apple and China Mobile are in preliminary talks, but he also noted that he's not a supporter of Apple's revenue sharing models, wherein carriers pay Apple a portion of monthly subscription fees for its iPhone-using customers.
Jianzhou's position could be for the benefit of public posturing, or he could in fact be locked into his position. Either way, with demand clearly high for Apple's iPhone, it appears quite probable that the iPhone will find a home in China.
Spreading the iPhone Craze
"The China marketplace is one of several international opportunities for Apple. The company is moving very fast, rolling the iPhone out to several new global markets," Jeff Kagan, a wireless and telecommunications industry analyst, told MacNewsWorld.
"I think the opportunities will play out like they have over here. Apple can carve out an initial marketplace for itself and then grow it over the next few years. If they wait, then other cell phone makers will capture the edge in other markets," Kagan added. "If Apple moves quickly, they can play the lead, and others will play catch-up. That's the position they want to be in."
Just this weekend, Apple launched its iPhone in the United Kingdom and Germany, and while reports are still coming in, it appears to have been a successful -- albeit smaller than the U.S. -- launch. T-Mobile reported selling at least 10,000 phones in Germany by the afternoon of its opening day there.
As of mid-October, Apple reported that it sold 1,119,000 iPhones in the fourth fiscal quarter of 2007, with a cumulative total of 1,389,000 for the year.
"I think the opportunities will play out like they have over here. Apple can carve out an initial marketplace for itself and then grow it over the next few years. If they wait, then other cell phone makers will capture the edge in other markets," Kagan added. "If Apple moves quickly, they can play the lead, and others will play catch-up. That's the position they want to be in."
Small Share of a Big Pie
"Most of China is going to buy cheap phones that also manage to provide Internet access," Tony Rizzo, a mobile analyst and director for The 451 Group, told MacNewsWorld.
"I believe Symbian has the best advantage to corner the Chinese market overall -- so look for Nokia to likely dominate. Apple will still be a very premium product, but they will get some share -- as will RIM -- that will provide noticeable top line revenue," he added.
"The market is so large that even a small percentage adds up for all players."
Google's Mobile Moves
With Google (Nasdaq: GOOG) backing its new Open Handset Alliance -- of which China Mobile is a member -- Apple must certainly be feeling some pressure to get into every market it can.
"[Google's] Android is actually most likely to affect Microsoft (Nasdaq: MSFT) and Windows Mobile more than anyone else -- and may put some significant pressure on Win Mobile as a platform that isn't freely available," Rizzo noted.
"Apple will sell on its closed and still-sexy hardware that it can optimize software around ... Apple fanatics are Apple fanatics," he added.
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