Is Apple's iPhone Finally Coming To China Mobile? (AAPL, CHL)
According to Reuters, China Mobile Chairman Xi Guohua told reporters that the company is "actively negotiating and both sides are keen."
"There are still some commercial and technology issues that need time to resolve," he said.
Those "commercial" issues could be App Store revenue.
In November 2011, reports claimed that while China Mobile wanted to add the iPhone to its lineup, it would not do so without a cut Apple's App Store revenue.
Apple has yet to grant anyone a piece of the App Store pie, so many wondered if a China Mobile deal would ever be possible.
Even without an official offering, China Mobile still acquired 10 million iPhone users by October 2011. This year, that number is likely much higher.
Since the carrier does not officially offer the device, consumers have been purchasing unlocked iPhones from other stores. This could inspire China Mobile to rethink its stance on App Store revenue.
China Mobile may also be persuaded by the low-cost iPhone, which is reportedly due for release alongside the iPhone 5S this fall. Both devices are expected to be unveiled on September 10.
Reuters also reported that the new iPhones will contain chips from Qualcomm (NASDAQ: QCOM) that will allow the handsets to operate on a greater number of networks. This includes China's "obscure" networks, which differ from those in most other nations.
By offering a worldly iPhone that is diverse enough to run on virtually any carrier, Apple could ultimately reduce its manufacturing expenses. The company may spend more initially, but this could prevent Apple from having to develop different iPhones for each market that it serves.
Many analysts believe that Apple must sign a deal with China Mobile, the world's largest mobile carrier, in order to grow. China Mobile currently serves more than 720 million customers -- up from 600 million just two years ago.
Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at 248-636-1322 or louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.