China Mobile Offers $919 Discount on Samsung to Sony Phones

China Mobile Ltd. (941) is offering smartphone discounts of as much as $919 and early access to “star models” while advertising its fourth-generation wireless service on a website featuring a picture of a stylized apple.

The world’s biggest phone company, which has yet to announce an agreement to offer Apple Inc.’s iPhone, is relying on popular handsets such as Samsung Electronics Co. (005930)’s Galaxy Note II to lure users. China Mobile received regulatory approval on Dec. 4 to start commercial service on the world’s largest 4G mobile network, after three years of trials, as it tries to attract smartphone users seeking faster downloads.

In an advertising blitz on billboards at bus stops and subway stations across Beijing, smartphones from Samsung, Sony Corp. (6758), HTC Corp. (2498) are prominently featured. Domestic vendors in China Mobile’s first wave of eight 4G handsets include ZTE Corp. (763), Huawei Technologies Co., and the Coolpad brand of China Wireless Technologies Ltd.

“The subsidy levels of these first wave, mid-high-end 4G handsets are good,” Nicole Peng, the China research director for Canalys, wrote in an e-mail. “At this time of the year, operators usually push harder the high-end devices, as December and January is an important gifting season. And for China Mobile from now till the next six months is a crucial time for them to get ahead of competitors in acquiring 4G users.”

Two-Year Commitment

To receive the maximum handset discount of 5,580 yuan ($919), users are required to make a two-year commitment to a 488-yuan monthly service plan, according to promotion materials available at China Mobile outlets. At that level, the user could chose any of the eight devices for free, as the most expensive of the group is the HTC 8088 priced at 4,821 yuan.

The Sony M35T, the least costly of the foreign brands, is priced at 2,999 yuan and requires a monthly plan of 258 yuan for a free handset. The Samsung N7108D costs 4,201 yuan, requiring a monthly plan of at least 388 yuan.

ZTE’s U9815 device costs 3,800 yuan and is free with a monthly plan of at least 328 yuan.

China Mobile rose 0.4 percent to close at HK$81.30 in Hong Kong trading. The stock has dropped 9.9 percent this year compared with a 2.6 percent advance for the benchmark Hang Seng Index.

China Mobile’s Beijing branch is also running a promotion for its 4G service that offers registrants priority access to unnamed “star models.” The web page features a picture of an apple, without making any reference to Cupertino, California-based Apple, or the iPhone. The page doesn’t say which handset will be offered, or when. More than 29,000 registrants have applied since the site went up yesterday, according to a counter displayed on the page.

China Mobile spokeswoman Rainie Lei and Beijing-based Apple spokeswoman Carolyn Wu both declined to comment on the Apple imagery in the 4G promotion, or to provide any update on the status of talks between the two sides.

To contact Bloomberg News staff for this story: Edmond Lococo in Beijing at elococo@bloomberg.net

To contact the editor responsible for this story: Michael Tighe at mtighe4@bloomberg.net

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