Apple negotiations with Chinese carriers on iPhone off to rocky start
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Alfredo Padilla Published on November 30, 2007 Comment on this |
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Reports from several sources have indicated that attempts to bring Apple's iPhone to the Chinese market have encountered some obstacles. The biggest stumbling block seems to be Apple's insistence on receiving a portion of iPhone user's subscription fees. Apple has signed deals with several carriers worldwide that provide them with up to $18 per month per subscriber in income on top of any profit arising from the sale of the iPhone. Chinese carriers have been very reluctant to agree to such a revenue sharing deal, with one Chinese executive telling Reuters that: "[O]ur business model does not entail sharing revenue with terminal producers -- we don't share revenue. That's a Chinese rule,".When Apple initially announced the iPhone and their partnership with AT&T it was a shock to many in the industry that the carrier had agreed to share subscriber fees with Apple. Buoyed by the initial success of the iPhone in the United States Apple has gone on to sign similar deals with carriers in Europe. iPhone launches in Europe have yet to replicate the initial success seen in the United States however. The challenges the iPhone has faced with launches in the UK and Germany may be giving Chinese mobile operators some pause when considering whether to enter into what is an unorthodox partnership in the mobile industry.
China is the largest mobile market in the world, and it is yet to be seen whether the allure of entering such a market will overwhelm Apple's insistence on receiving a share of subscriber revenues. Apple has stated that they plan on entering Asian markets sometime in 2008.
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