China Mobile: Talks Continue with Apple

China Mobile is still in talks with Apple over selling the iPhone, despite a deal with rival Unicom.

China Mobile boss Wang Jianzhou confirmed to reporters at a conference in Dalian last Friday that it was still hopeful of striking a deal with Apple.

China Unicom has announced it would start selling the iPhone from as early as October in a non-exclusive three-year deal with Apple.

Talks between Apple and Mobile, which have been held on and off over the last two years, have fallen down over price. But any deal struck today would have to accommodate China Mobile's ambitions for its new Android-based OPhone series and its just-launched Mobile Markets app store.

Some analysts argue that Apple does not necessarily need China Mobile to tap into the huge mainland market, which has around 700 million mobile subscribers.

Research firm Wedge Partners has predicted that Apple will sign a deal with mainland cellphone retailer Di Xing Tong, which owns hundreds of stores. The chain is owned by Foxconn, the Taiwan-owned contract manufacturer that makes the iPhone and iPod.

But while this would give Apple direct access into the market, retailers will not be able to commit huge sums to handset subsidies as the operators have.

Wang said last week that China Mobile would spend 6 billion yuan ($876 million) on mobile phone subsidies this year, mostly to kick-start demand for its struggling 3G business.