New iPhone, 4G technology May Mean Apple, China Mobile Tie-up Closer

REUTERS/Mario Anzuoni

(Reuters) – The stars may finally be aligning for a long-awaited deal between Apple Inc and ChinaMobile Ltd, the world’s biggest mobile carrier, that could help the iPhone maker claw back lost ground in its most important growth market.

Apple is expected to unveil its redesigned iPhone next month and may also release a cheaper, emerging market smartphone. Crucially, it also now has Qualcomm Inc chips that can operate even on China’s obscure networks. At the same time, Beijing is expected to grant 4G licenses by the year-end that favor the biggest of its domestic mobile operators.

Apple has so far ducked a deal with China Mobile as this would have required a redesign inside the iPhone to work on the operator’s inferior TD-SCDMA 3G technology. For its part, China Mobile has been reluctant to commit to the huge cost of marketing and subsidizing sales of the expensive iPhone.

By offering a mid-market Apple smartphone, China Mobile, which has 740 million users, could draw in more sophisticated, data-crunching subscribers to grow net profit that last year was only 15 percent higher than in 2008, when Apple opened its first store in China.

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