Apple’s hush-hush Chinese connection

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iol scitech sep 25 sa iphone 5c

REUTERS

Apple's new iPhone 5c displayed at an Apple shop in Tokyo. Apple fell to No. 7 in the second quarter in China, the world's largest mobile market.

Beijing - China Mobile, the world's largest mobile phone carrier, has quietly begun taking pre-orders for Apple's iPhones, according to a report on Fortune.com.

Apple, which needs to expand its footprint in China, its biggest market after the United States, is trying to offset slowing revenue growth in developed markets that are increasingly saturated and hyper-competitive.

The Chinese carrier has struggled to sustain growth as rivals like China Unicom Hong Kong sign up new users at a faster pace.

Apple fell to No. 7 in the second quarter in China, the world's largest mobile market, with five percent market share, losing ground not just to Samsung Electronics but also to local rivals Lenovo Group and ZTE.

Fortune's report, which could not be confirmed by Reuters, showed a screen grab from a reservation website that Fortune said was registered by a China Mobile subsidiary in southern China that began taking pre-orders for the iPhone 5S and the iPhone 5c late on Monday.

At 6:30am EST on Tuesday, the page had been replaced with a notice saying it was being updated and pre-orders would resume later.

Representatives for China Mobile could not be reached for comment. Apple declined to comment.

In late October, China Mobile placed an advertisement for the faster 4G mobile network on its website, raising expectations that a long-awaited distribution deal with Apple would be announced soon.

Apple has spent years trying to reach a deal with China Mobile, with numerous visits to the state-owned carrier's Beijing headquarters. It has repeatedly insisted the Chinese market is crucial to the company.

The ongoing effort has fuelled Wall Street hopes that a deal would come soon, offering the iPhone to more than 740 million potential buyers who are China Mobile subscribers. But negotiations have been tricky, in part because of disagreements over details like revenue-sharing, analysts have said.

China Mobile has struggled to attract users to its high-speed 3G standard, who accounted for just one-fifth of total subscribers. In August, 40 percent of China Unicom Hong Kong's subscribers were on 3G, versus 52 percent for China Telecom. - Reuters

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