Apple and China Mobile signs a distribution deal which could be worth billions of dollars in extra iPhone revenues

December 22
7:13 PM 2013

A much-awaited distribution deal was finally agreed upon between Apple and China Mobile, the Financial Times reported. The tie-up is worth extra iPhone revenues to the tune of billions of dollars as the biggest mobile market is finally opened to the most valuable technology firm in the world, the report said.

For the first time, Apple's two latest releases, the iPhone 5s and 5c will be available in the retail stores of China Mobile on January 17. Pricing for the iPhone or the release dates for the iPad was not given.

The report said the agreement was expected after the Chinese government gave 4G network licenses to its three main telecoms carriers which helped make the iPhone more compatible with the networks of China Mobile. Apple shares have risen over 20% in the past three months in anticipation of the deal.

In the past few weeks, China Mobile has been teasing the iPhone's launch, with preorders of 4G phones being offered by a website of its Beijing branch. With over 750 million customers, the Chinese firm is the biggest mobile carrier in the world.

A previous attempt at a partnership between Apple and China Mobile failed after the latter adopted, at the behest of Beijing, a home grown 3G standard that was not compatible with Apple's iPhones, the report said. Because of the iPhone's poor performance on China Mobile's network, users went to China Unicom and China Telecom, the smaller rivals of China Mobile which used a 3G standard that was compatible internationally.

RBC Capital Markets Analysts have predicted that the tie-up could increase the annual revenues of Apple by $10 billion. Morgan Stanley has also suggested that in the current financial year, Apple could also sell 12 million extra iPhones. The agreement also at a time when Apple has gotten back on its feet in China after it lost some market share to rival Samsung and domestic smartphone firms in China, the report said.

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