Tag Archives: China Telecom Corporation Limited

China Telecom could offer the iPhone as early as February

China Telecom is getting very near to launching Apple’s iPhone 4S on its network, the carrier said in a press release Tuesday obtained by China Daily. China Telecom subsidiary Beijing Telecom said a CDMA version of the iPhone 4S will likely be available to its customers by the end of February or the beginning of March.

Apple has been taking preparatory steps in advance of a launch with China Telecom, China’s third largest mobile network operator. Earlier in January, Apple secured regulatory approval to sell a device in China that operates using the CDMA2000 network standard, which is the technology China Telecom uses for its 3G network. At the time, the only step remaining for Apple was to get a license from China’s Telecommunications Equipment and Certification Center to begin selling the device, which it gained on Monday this week.

Earlier this week, Morgan Stanley’s Katy Huberty predicted Apple could grow its iPhone sales by as many as 57 million units in China over the next two years if it succeeds in securing partnerships with China Telecom and China Mobile. China Telecom will offer Apple a potential subscriber pool of roughly 15 million high-end subscribers according to Morgan Stanley’s numbers, approximately doubling its current reach through official partner China Unicom.

The deal hasn’t yet been confirmed by Beijing Telecom’s parent company beyond the report from China Daily, and no pricing details have been released, but the pieces are in place, and there’s little reason to suspect Apple wouldn’t want to expand its presence in China as quickly as possible. No doubt a partnership with China Mobile, which reaches 650 million subscribers and has around a 70-percent share of the Chinese mobile market, is also a priority, but technological factors likely precludes official iPhone support until Apple creates a version specifically for China Mobile’s network.

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Analyst: China could bring 57M iPhone bump by 2013

Apple’s iPhone was a hot seller in the company’s first fiscal quarter of 2012, but that’s nothing compared to what one analyst predicts we could see in just a couple of years’ time. Morgan Stanley’s Katy Huberty anticipates as many as 57 million additional iPhone sales for Apple in China in a new investor note (via Fortune), based on its ability to form partnerships with China’s remaining major carriers.

Huberty bases her math on a potential market of 150 million total high-end mobile subscribers in China across all three carriers, who would potentially opt for Apple’s device. Currently, 20 percent of China Unicom  (Apple’s official Chinese carrier) subscribers opt for the iPhone, so assuming similar adoption rates once iPhones make it to the other two carriers, Huberty expects at least 24 million new iPhone sales in 2013.

There’s good reason to believe Apple is working to bring the iPhone to China’s other carriers. The company’s been securing regulatory approval and licenses for a launch on China Telecom, which would be able to run the iPhone 4S. And China Mobile has been having discussions with Apple regarding 4G technology, which it said in September have been “positive” so far.

Should Apple manage to get the iPhone on both networks officially, Huberty thinks the iPhone could reach higher penetration levels across all carriers, possibly on par with AT&T, where last quarter, the iPhone accounted for over 80 percent of new smartphone sales. According to Huberty’s most generous estimates, Apple could be selling 57 million more iPhones annually than it currently does in the Chinese market.

It might sound pretty far-fetched, but China Mobile already has at least 10 million iPhone users, despite the fact that those users are limited to 2G speeds. And Apple sold more than 37 million iPhones during its last quarter alone, compared to 68.5 million during all of its 2011 fiscal year. Similarly explosive growth in a market known to be hungry for Apple devices is hardly an outlandish proposition.

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Apple poised to double potential iPhone market in China

Apple is one step closer to nearly doubling its potential iPhone subscriber base in China, thanks to a new regulatory approval it secured in that country this week, according to Bloomberg. Apple now has official permission from the China Radio Management Office to offer a handset that operates on the CDMA2000 network standard, which is used by the third-largest Chinese carrier, China Telecom.

China Telecom would be the second iPhone carrier in China, joining the country’s second-largest network provider China Unicom. China Telecom would add a potential buying audience of 33.4 million mobile subscribers to China Unicom’s network of 36.5 million users. All that remains is that Apple secure a license from China’s Telecommunications Equipment and Certification Center prior to offering the device for sale.

Apple wouldn’t need to do much to offer the right hardware for the network; China Telecom uses a 3G CDMA2000 network, based on the same standard as Verizon’s mobile 3G network in the U.S. Adding the carrier officially would not only expand Apple’s reach, but also help it win back more legit channel sales from the gray market: Gartner analyst Sandy Shen told Bloomberg that as authorized sales outlets become more widely available, gray market sales dwindle.

Apple may soon face entirely different challenges in China, however, especially if it rapidly scales its potential iOS user base in the country. Recent reports indicate Apple is currently being sued by a group of Chinese writers over allegations that pirated books are being offered for sale on the App Store. The group has asked Apple to remove the books, but so far, the iPhone-maker has refused. The group plans to file another lawsuit on behalf of more authors soon, and says the problem has become rampant. The group is only seeking around $1.2 million USD in damages for this first suit, but in the long term, Apple could alienate content providers and invite continued legal trouble by ignoring the problem.

As China becomes more central to the future of Apple’s mobile market, the company will likely have to come up with new ways to address these and other unique challenges. We’ve seen that localization is key when it comes to making apps successful in Asian App Stores, so it would make sense that Apple may eventually want to set up more localized operations for dealing with Chinese App Store content as well, especially given the recent move to make the Chinese App Store open to payments using local currency.

It looks like we’ll soon see China’s iPhone use explode, above and beyond the impressive growth it’s already posting in that country. Don’t be surprised if Apple pumps up its local operations as well.

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