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Apple And China Mobile Can't Agree On Anything

February 9, 2009
According to an inside source at the China Mobile Research Institute, the most recent talks between Apple and China Mobile broke down over control of the App Store. This isn't the first time the two companies have disagreed. Interfax China's anonymous source has reported that China Mobile CEO Wang Jianzhou wants control of the App Store including payment collection.
"Wang said China Mobile should operate the application store itself in order to maintain its advantage," the source said.
Wang has a problem with the App Store's use of credit cards because most customers in China pay with money deposited into mobile accounts instead of the popular plastic currency. China Mobile is currently working on their own way of distributing smartphone applications. The other negotiations consisted of talks about the iPhone itself. Apple previously asked for 20-30 percent of China Mobile's revenues from iPhone users. That deal was rejected. Apple then attempted a subsidized pricing model where it would sell the iPhone to China Mobile for $600 per unit while forgoing any other revenue sharing and once again, China Mobile didn't agree with Apple. All of the negotiations have occurred over the past 18 months and have included Steve Jobs, Tim Cook and other various company officials. Apple has always considered the Chinese market a high priority due to its size. China Mobile is the largest mobile carrier in the world with over 415 million subscribers and those numbers are from mid 2008. Apple may have to turn to one of the smaller mobile carriers in China to get the iPhone finally installed there.

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