Apple Inc. (NASDAQ:AAPL) has received the green light from Chinese regulators for its iPhone to run on China Mobile Ltd. (NYSE:CHL) (HKG:941)’s network. The news comes on the heels of a report that the company had asked its suppliers to prepare an iPhone shipment for the carrier.
Apple seals a deal with China Mobile?
This latest report is from Paul Mozur at The Wall Street Journal. He saw a notice on the website operated by China’s Telecom Equipment Certification Center. The Chinese regulation agency has apparently issued Apple Inc. (NASDAQ:AAPL) a network access license for a device which resembles the iPhone and operates on China Mobile’s standards for third and fourth generation devices. Apple received other licenses for the technology on China Unicom Ltd. (HKG:0762) and China Telecom Corp. (HKG:0728) as well.
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Mozur reports that many vendors begin selling devices in China within just weeks of receiving the approval of this regulator. Apple said Tuesday when it unveiled the iPhone 5C and iPhone 5S that they would be available for purchase in China starting Sept. 20. That’s the same day they will be available in the U.S. There still has been no official announcement of a deal between Apple and China Mobile.
What a deal with China Mobile means for Apple
With the regulator’s approval of Apple Inc. (NASDAQ:AAPL)’s iPhone, the way is now paved for the company to receive access to the 700 million subscribers on the China Mobile network. The largest mobile network in the U.S. has a subscriber base that’s just a seventh of China Mobile’s subscriber base. If Apple and China Mobile have finally struck a deal, it would put an end to years of talks between them. Apple had previously chosen not to make an iPhone compatible with the carrier’s network because it is rarely used.
Apple strikes a deal with DoCoMo
Apple Inc. (NASDAQ:AAPL) revealed on Tuesday that it did make a deal with Japan’s largest carrier, NTT DoCoMo. The company already holds a 30 percent share in Japan, and UBS analysts note that it makes sense for Apple to move more heavily into Japan because more of the nation’s mobile subscribers can afford the expensive iPhone 5S.
Analysts Steven Milunovich and Peter Christiansen believe that the iPhone 5C, which was supposed to be geared toward the Chinese market, may be too expensive for the market. They believe that a deal with China Mobile will be announced by the end of the year, which would line up with The Wall Street Journal’s report that the iPhone has been cleared for operation on China Mobile’s network.