China Mobile Announces iPhone Deal

China Mobile's customers are about to get the world's most popular smartphone. With the company getting access to China's new 4G network, which is compatible with Apple's phones, announced today that it will begin selling iPhones to its 700 million customers.

The move was widely suspected by observers of the Chinese tech scene, since China Mobile's old 3G network was incompatible with iPhones but yesterday China Mobile, which is the world's largest mobile carrier in terms of number of customers and its two largest competitors got licenses to work with China's newly built 4G network that is set to “turn on” on December 16^th.

The announcement, unsurprisingly, caused Apple's stock to raise 1.5% in pre-trading early Thursday morning and is expected to continue to raise once stocks open in the morning.

China Mobile's main competitors, China Unicom and China Telecom, have been selling iPhones to their customers since 2009 and 2012 respectively. The main reason was that their 3G networks were more compatible and closer in similarity to international networks. China Mobile and Apple also bickered over sale volume guarantees, which further delayed any deal.

It remains to be seen what version of the iPhone will be released for China Mobile's customers, however the iPhone 5S and iPhone 5C are good bets as the Wall Street Journal reported in September that Apple was shipping the two models to China Mobile in a sign that a deal was eminent.

One also has to wonder how many of China Mobile's customers will be able to enjoy their new iPhones, as the 4G network will not be available for the vast majority of them. The 4G network will only be initially available in China's biggest cities and only a fourth of China Mobile's customers are on the company's older 3G network, with the vast majority on an even older network.

While the deal is undoubtedly good business news for both companies, with so few of China Mobile's customers expected to be able to access China's new 4G network should we expect some bumps in the road once the iPhone goes on sale?

Apple has not commented on or confirmed the deal at press time.

[Source]