In news that has all the markings of a cloak-and-dagger tale, Chinese media are saying that Apple (Nasdaq: AAPL) COO Tim Cook came calling this week on China’s dominant mobile carrier, China Mobile (NYSE: CHL; HKEx: 941), in a report that featured a blurry photo of a potentially Western-looking man viewed from the back walking briskly through the lobby of a Chinese company. (Chinese article) China Mobile announced nearly a year ago that it was in talks with Apple to develop a model of its wildly popular iPhone that could run on the telco’s problematic 3G network, based on a homegrown technology standard known as TD-SCDMA. China Mobile has given few substative updates on that plan since the initial disclosure, but I suspect the arrival of such a high-level Apple executive, if true, means an official announcement could be near. The roll-out of such a model would mark a huge development for China Mobile, which has steadily lost market share in the 3G space to rivals Unicom (NYSE: CHU; HKEx: 762) and China Telecom (NYSE: CHA; HKEx: 728) not only due to technical issues, but also a lack of hot-selling handsets developed for TD-SCDMA. Unicom has used its status as China’s only telco with an official iPhone tie-up to turbocharge its 3G service, stealing steady share from China Mobile in this space particularly suited to smartphones that can take advantage of 3G’s high-speed data capabilities. Furthermore, iPhones enjoy just as much if not more popularity in China as they do elsewhere in the world, meaning China Mobile would be almost guaranteed to see a huge bump in its 3G subscriber growth if it can offer a 3G iPhone. I’m not usually one to get caught up in market hype, but China Mobile’s roll out of a 3G iPhone in the next few months, if it happens, would be a major game-changer in the country’s 3G market, helping China Mobile regain some of the momentum it has lost to Unicom and China Telecom.
Bottom line: China Mobile’s potential roll-out of a TD-SCDMA 3G iPhone in the next few months could help it regain momentum it has lost to rivals China Unicom and China Telecom.
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