The China iPhone Saga Continues

Earlier this week we reported that Apple has been negotiating with China Mobile, China's largest mobile carrier, for about 18 months without much progress. There have now been reports that Apple has been negotiating with China Unicom in an attempt to finally bring the iPhone to China. As of yesterday, there have been even more reports that China Mobile wants to cooperate again in a possible attempt to stifle negotiations between Apple and China Unicom. The first reports regarding Apple and China Mobile's negotiations stated that talks broke down because neither company wanted to give up much control. China Mobile wanted control of the App Store along with a few other demands Apple wouldn't meet. Another possible road block is China Mobile uses a Chinese-only network called TD-SCDMA instead of WCDMA which would require Apple to create custom iPhones. China Unicom, China's second largest mobile carrier, has supposedly been negotiating with Apple since October 2008, according to China Business News. They have also had troubles seeing eye-to-eye with Apple:

"China Unicom has held several rounds of negotiations with Apple Inc.," said a well-informed source within the company, "but there are still many obstacles ahead."

One of the issues is China doesn't allow cell phones to have Wi-Fi so Apple would have to agree to remove it from the iPhone or hope the regulations would change which is highly unlikely. Another issue is China Unicom would also want Apple to change the default software included on the iPhone to something Chinese users are more familiar with and once again this seems unlikely. The upside to Apple working with China Unicom is that they intend to roll out a 3G network based on the WCDMA standard that Apple already uses. China Unicom hopes to have it ready by May 17th. In a final twist, JLM Pacific Epoch reported yesterday that China Mobile and Apple are "currently negotiating iPhone cooperation." This would mean that the two companies are back to speaking with each other and Apple may have gained some added leverage by speaking with China Unicom. All companies involved want something they can't have but Apple needs to get the iPhone in China one way or another. Negotiations could go on for quite sometime because both carriers have a lot to lose if Apple signs on with the opposition.

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