Sun, Sep 08, 2013 - Page 13 News List

Apple nears deals with holdouts in China, Japan

BUSTING LOOSE:Apple could tap at least 800 million new customers through China Mobile’s 740 million subscribers and NTT DoCoMo’s 62 million consumers

Bloomberg

Customers look at devices on offer beneath a poster of an iPhone 5 smartphone at an Apple retailer in Beijing, China, on Friday. Apple is expected to announce a deal with China Mobile, the world’s largest mobile carrier.

Photo: EPA

Apple Inc is on the verge of clinching agreements with two of the biggest holdouts to selling its iPhone, China Mobile Ltd (中國移動) and NTT DoCoMo Inc, opening a route to hundreds of millions of new customers.

Ahead of an event on Sept. 10 to unveil new iPhones, Apple and China Mobile are near a deal for the world’s largest wireless carrier to offer the device, said a source, who asked not to be identified citing privacy concerns.

Apple is also close to an agreement to distribute its handset through Japan’s largest mobile carrier, NTT DoCoMo, sources have said.

Any final deals will bust loose at least 800 million new consumers for the iPhone, with China Mobile boasting 740 million subscribers and NTT DoCoMo about 62 million, data released by the carriers show. Those would be welcome customers for Apple, which is combating slowing sales growth for its flagship product amid competition from Samsung Electronics Co and makers of cheaper handsets.

“This is a very big deal for Apple,” said Brian Marshall, an analyst with ISI Group in San Francisco. “Apple’s iPhone growth has really slowed down.”

The agreements would end years of negotiations where the carriers balked at Apple’s terms, including the costs of subsidies needed to make the iPhone affordable for customers. Apple is set to reveal a lower-cost iPhone on Sept. 10, a source said.

Trudy Muller, a spokeswoman for Apple in Cupertino, California, declined to comment on China Mobile on Friday. Zhang Xuan (張軒), a Beijing-based spokesman for China Mobile’s parent company China Mobile Communications, did not answer calls.

“We’re not the source of information and nothing has been decided at this point,” DoCOMo said on Friday.

While Apple is preparing to a ship a lower-cost iPhone to China Mobile, a deal will not be announced at Apple’s Sept. 10 event, or at a follow-up event in Beijing on Sept. 11, a source said. It is unclear if a DoCoMo agreement will be announced on Sept. 10.

China is one of Apple’s largest markets, yet sales there fell 14 percent last quarter as new local smartphone vendors like ZTE Corp (中興) and Xiaomi Corp (小米) took market share by offering lower-cost alternatives to the iPhone.

China is playing an increasingly important role in the global smartphone market, with sales there exceeding combined US and Western Europe sales, said Linda Sui, an analyst with Strategy Analytics.

In the December quarter, China Mobile may order 5 million iPhones, then 40 million more next year, according to Marshall.

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