Why the world's biggest telecoms operator missed the iphone

Unicom has, Telecom has, mobile or not

China Mobile and Apple have been in marathon talks for the introduction of the iphone for four years, but the lengthy negotiations continue even after the successful talks between Unicom and telecoms. And the iphone's best-selling, took away the global users, but also the strength of the opponent in the 3G era of competitiveness, China Mobile now has to turn the tide of the Battle of Hope pinned in 4G.

Recently, China Telecom is in the midst of the deployment of the iphone, if there is no accident, consumers will be the fastest in about February 15 to buy a telecommunications version of the contract machine.

Unicom has, Telecom has, the first and Apple to negotiate the introduction of the iphone, China Mobile still empty-handed. Since 2007, China Mobile and Apple have been negotiating for more than 4 years on the introduction of iphones, with no real results so far.

Why is China Mobile, the world's largest telecoms operator, still not getting the right to sell Apple handsets?

(Feng/photo)

No one wants to bow.

In fact, China Mobile has long been eyeing the iphone. At the end of June 2007, the iphone was listed in the US, rage. In November, Chinese mobile Data minister Gorning and others came to Apple headquarters to discuss the introduction of the iphone into China.

But by November 13, mobile chairman Wang, during his participation in the GSMA Mobile Asia Conference, revealed that two companies were divided on specific terms, such as income distribution, without reaching any agreement. According to the precedent of Apple and other telecoms operators, Apple asked for a 20%-30% flow fee split from mobile, which was rejected.

In January 2008, Mobile said it had suspended negotiations with Apple. But five months later, at Apple's Global developer conference, Apple CEO Steve said the 3G iphone is expected to enter the mainland within the year, but it will need to wait for regulatory approval.

In a few days, Mobile chairman Wang said publicly that the obstacles to cooperation with Apple have been resolved, China Mobile has always maintained close ties with Apple, leaving only the work level problems.

The turnaround for the talks, according to people familiar with the matter, is that Apple has yielded to its revenue-sharing model. The two sides resumed negotiations, Apple asked China Mobile to pay each of the iphone 600 dollars, but also to subsidize customers. In addition, Apple on July 10, 2008 released the online store App Store, where users buy apps directly from them without bypassing the operator.

These are very different from the past experience of China's mobile. The contrast is the biggest, in China Mobile platform, SP, CP are only China Mobile lead, the user ordered all the services and content, are China Mobile from the charges in charge, and then divided into.

As a result, Apple's conditions were rejected again. "As a fashion product, the iphone is not the only option for China Mobile," Mr Wang said in October 2008.

Indeed, China's choice of mobile also has Google. At the end of 2007, China Mobile joined the Android Alliance, and Google mobile phone T G1 in September 2008, when the market was looking for a product that could fight the iphone.

But since then, China Mobile has been in the passive position, the Chinese 3G licence issued.

Can't solve the TD-SCDMA knot

January 7, 2009, China's Ministry of Technology officially issued a 3G license to the domestic three telecom operators, China Unicom to obtain WCDMA, telecom CDMA2000, China Mobile is the independent research and development of TD-SCDMA. The former two have a number of operators around the world, the technology is relatively mature, covering a wide range of the latter only one operator of China Mobile.

Apple's new 3G iphone, which supports WCDMA, does not support TD-SCDMA.

In early March 2009, Chang, chairman of China Unicom, led China Unicom's negotiating team to the United States to negotiate with Apple. On August 28, the two sides announced a 3-year contract to sell two 3G iphones in mainland China, and signed an exclusive distribution agreement, with China Unicom becoming the only telecom operator in the mainland authorized to sell the company for a period of a couple of years.

China Mobile to be outdone. Three days later, China Mobile launched a TD-based Smartphone ophone platform, using an open operating system based on Android OMS, Lenovo Mobile, Dopod, Hisense, LG and other manufacturers to push ophone mobile phones, the development of TD terminals.

In addition, China Mobile also began to learn from the Apple App Store practice, August 17, 2009, officially launched the App Store mobile Harsh (MM).

But China Mobile has not really given up on Apple. In March 2010, Mr Wang said in the 2009 China Mobile results Conference that China Mobile was still negotiating with Apple on the introduction of the iphone, and the difficulty was how the homegrown TD-SCDMA was implanted in the iphone.

The fourth-largest U.S. operator, T, has not yet got the iphone's sales rights, but the iphone cannot support its own AWS band, although it uses CDMA.

Supporting the AWS band is not as simple as adding a module, but it may also affect the overall design of the iphone. To be aware, iPhone4 release, the fuselage around the stainless steel frame as a design flaw in the external antenna, the impact of mobile phone signal reception, Apple has brought a credibility crisis.

After all, China Mobile is not equal to T, as the operator of the world's largest users, its weight is not enough to let Apple for a product? But what Apple may be worried about is whether the TD network problem will lead to a bad iphone user experience.

In an interview with Mr Wang in the Davos forum in January 2011, Mr Wang said China Mobile wanted Apple to support TD-SCDMA in the development of a new generation of iphones, but Apple had difficulty in developing too many projects and a process for arranging the development of TD format. Two companies have been negotiating for this, and Apple has made it clear that it will fully support LTE (4G).

How powerful is the iphone?

How big is the iphone's pull on the operator?

In the United States, despite T's push for Android handsets such as Samsung, and the use of special cards and packages for iphone users, 1 million or so of iphone users would rather abandon the 3G Internet feature and stay in T, but at the third quarter of 2011, As the only company that does not have access to the iphone, they have to face the fact that user growth slows down, and even iphone to other operators.

China Unicom has underperformed its profit targets since the introduction of the iphone. 2010 China Unicom Performance report showed that its 2010 revenue of 171.3 billion yuan, an increase of 11.3%, but net profit of only 3.85 billion yuan, down 59.7%, the history of the lowest record. This is blamed by many for too much on the iphone.

2011 years ago Three quarter, China Unicom sales cost of 20.634 billion yuan, increased by 3.524 billion yuan a year earlier, growth 20.6%,3g mobile phone subsidy cost of 4.156 billion yuan, an increase of 2.89 billion yuan.

A Chinese telecoms insider told the southern Weekend correspondent that China Unicom, which subsidizes the iphone on the surface, has established a reputation for unicom in the 3G sector and has pulled 1000-1500-dollar smartphone sales.

At the beginning of 2012 in Shenzhen Huaqiang North Electronics market after a lap, he found that the original largest mobile phone parts distributing center, 60% of the ads and components are related to the iphone.

More importantly, China Unicom through the iphone developed Suning, Gome and other social channels to sell mobile phones, in the first half of 2011, China Unicom's social channel sales accounted for 51%. The iphone also helped China Unicom to dig out a lot of mobile global users, starting from 2010, China Mobile has done most of the promotional activities is to recharge the phone, the purpose is to bind users to a year.

According to this momentum development, and so on smartphone hot up, China Mobile still can maintain the position of the first big operator?

February 7, 2012, China's Ministry of the general engineer Zhu said, as of the end of 2011, the national telephone users reached 1.27 billion households, 3G telephone users reached 128 million households, the current net increase of 81.37 million households. By the end of 2011, China Unicom announced the number of its 3G users 40 million, Mobile said 3G terminals G3 customer number of 51.21 million households. These two numbers include not only 3G handsets, but also 3G data cards, but they are not published in proportion.

Hope LTE

Apple and China Unicom have never disclosed the number of iphone users they know. But since May 2011, China Mobile has made a high-profile announcement about its iphone users.

October 25, 2011, China Mobile, chairman of the ITU World Telecommunication Conference in Geneva, said China Mobile network iphone users reached 10 million. He owes it to Apple's domestic stores.

In fact, China Mobile all over the company also work. November 2011, in the Beijing subway billboard, China Mobile played the global smart phone package ads, the preferred model IPhone4, the highest can enjoy 2800 yuan return. Of course, China Mobile's own channels do not sell iphones, consumers need to buy from elsewhere.

In addition to the iphone package and cutting cards, China Mobile's subsidiaries also promote the iphone through their own channels. A Chinese mobile insider told the southern weekend reporters, the specific way is: to find one or two of the local third-party agents have the strength of the organization sourcing (as long as to ensure that the authentic, some are licensed, some even directly from China Unicom), binding and Unicom similar packages, the gap to fill.

China Mobile 10 million iphone users, although holding high-end equipment, but can only use 2G network calls or text messages, the Internet relies mainly on WLAN or WiFi, after all, not as direct 3G online convenience. How to stabilize these users is also a problem.

For a whole year in 2011, China Mobile has stressed that talks with Apple are continuing. During the year, rumours and clarifications of China Mobile's imminent sale of the iphone were staged.

On June 22, when Apple COO's Tim Cook visited China Mobile and the Chinese Unicom headquarters, the News of China Mobile's September sale of the iphone was immediately spread.

Two months later, at China Mobile's interim results conference, China Mobile chairman Wang said he hopes to reach an agreement with Apple on the iphone as soon as possible, but there is no timetable.

But in November, Bloomberg reported that negotiations between Apple and China Mobile over the TD-SCDMA sector were broken and Apple would not release the TD-SCDMA iphone. The move soon denied the report, saying the talks were still in progress.

Despite Apple's promise to support LTE, no one knows when 4G will arrive. China's 4G band planning has not yet been introduced, in Shanghai, Hangzhou, Nanjing, Guangzhou, Shenzhen, Xiamen, six cities pilot LTE first stage scale test, has just entered the second stage of scale test, is expected to be completed by June 2012.

For China Mobile, 4G is not entirely a good thing, "the faster the 4G comes, the faster the operator dies." "The Faster the network is, the quicker it will be to accelerate the decline of its traditional high-margin business, such as voice and SMS, and accelerate its fate as a conduit," said a Chinese mobile insider to the Southern weekend correspondent.

Although China Mobile is pushing hard to build its platform, ophone and MM have not achieved the expected results, and its nine mobile internet base is just beginning to start.

China Mobile insiders said recently that they have been notified that some of the iphone iOS5.0.1 and mobile SIM card is not compatible with the problem.

(Editor: Lu Guang)