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Far from being put off by the iPhone's lukewarm reception in China, Apple (Nasdaq: AAPL) is reportedly trying to sign up other wireless carriers in the country besides its existing partner, China Unicom.
China Mobile is still holding talks with Cupertino, the carrier's Chairman and CEO Wang Jianzhou announced at the GSM Association's Mobile Asia Congress in Hong Kong last week. With more than 500 million subscribers, China Mobile is the world's largest wireless carrier based on customer numbers.
However, things may not go smoothly for Apple. China Mobile has just begun selling the Dell (Nasdaq: DELL) Mini 3i, a smartphone running the carrier's O-Phone platform, according to several reports. O-Phone is based on Android.
No Entering the Dragon?
Further, China Mobile has clamped down on potential iPhone distributors in China, according to an article appearing in iPhonAsia. It has apparently warned distributors, including Gome, Suning and Tongwanbao not to display iPhones or any related marketing materials, or sell iPhones on pain of fines or a cessation of business.
China Mobile, which is well known for exerting a very high degree of control over its OEMs and products, might just call this a bit of good old capitalistic fun. However, Apple may need to become more flexible in negotiations if it wants to make the China Mobile deal happen. Just as Verizon Wireless had done in the United States, China Mobile reportedly walked away from talks with Cupertino because it didn't like Apple's stiff terms.
Apple eventually settled with AT&T (NYSE: T) as its official U.S. carrier, and the telecom's ability to support the immense amount of cellular data iPhone owners use has been notably criticized.
The Land of the Morning Calm
Sometime around the end of this month, the iPhone will debut in South Korea. The country's largest carrier -- KT Corp. -- is offering the device online and in stores and will officially launch it in the coming days.
Another major South Korean carrier, SK Telecom, is also reportedly holding talks with Apple about carrying the iPhone.
The South Korean market is large -- 47 million mobile users. However, it's dominated by domestic manufacturers, including Samsung and its archrival LG Electronics. These two are the world's second- and third-ranking smartphone manufacturer in terms of sales. They respectively have 19.3 percent and 10.7 percent of the global market, according to Gartner (NYSE: IT).
The iPhone's ability to compete with these local giants is critical. Samsung has been notably creative, preparing its own operating system and bringing out several new smartphones running Android.
Fending Off Android
Android possibly poses a greater threat to the iPhone than brand-new mobile operating systems. China Mobile, with its more than 500 million customers, provides a powerful boost to Android with its intention to support that operating system.
Meanwhile, the Conexus Mobile Alliance, which has 240 million subscribers, has thrown its weight behind Android. Members include NTT DoCoMo (NYSE: DCM) of Japan, KT Corporation (NYSE: KTC) of South Korea, Indosat of Indonesia and Far EasTone Telecommunications of Taiwan.
Further, the GSM Association, members of which include carriers and vendors using the GSM wireless communications standard, supports Android because of its openness.
GSMA's members include AT&T and China Mobile. They constitute about 80 percent of the global mobile market.
However, no one can say whether the iPhone OS or Android will come out ahead. "There's still a lot of hype around Android, and deservedly so," Ramon T. Llamas, a senior research analyst at IDC, told MacNewsWorld. "People are still trying to figure out how much of an impact it will have."
Although the iPhone is king of mobile apps, that may not help its sales in overseas markets. "The usability of the device is the biggest driver," Chris Hazelton, a research director at the 451 Group, told MacNewsWorld. "Then comes carrier support, and then comes apps."
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