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Apple Inc. Message Board

  • no1xc no1xc Sep 13, 2013 8:28 PM Flag

    For those worried about a CM deal not coming through, here is what you need to know.

    Both 5C and 5S have chipsets that support TD-LTE standard. This standard is China Mobile's proprietary 4G wireless standard and is not widely used. If the cooperation isn't for certain, why would Apple put in extra effort and cost to make their devices compatible with TD-LTE bandwidths? The reason there wasn't an announcement is most likely because CM hasn't launched their network. And China's industry experts anticipate CM to finish deploying the infrastructure, receive network license and launch 4G service in early Q4.

    Peng Chan of China's Merchant Securities says the license may be issued as early as September. China Mobile so far has incurred 7 billion dollars in capital expenditure on 4G equipment procurement. The eventual launch is just a matter of time.

    Do you believe they don't want iPhones to be on their network to attract high end customers? Telecommunication industry knows iPhone users contribute most data usage. It's true that CM normally doesn't subsidize phones, but the deal could be constructed in a flexible manner. Apple could sell boatloads of iPhones to CM at marked down prices and get extra profit by having a revenue sharing agreement with CM. Or CM could learn from China Telecom and China Unicom to offer one year prepaid plans that require the consumer to pay 5000 yuan (800 dollars) to get the phone and first year service. The high prices of iPhones of course will curb demand, but as long as Apple can sell as many as they can make, high price isn't an issue. Fighting for the bottom market would only damage brand image, erode margins and strain capacity.

    Believe me even though China is not a rich country, it's not uncommon for Chinese citizens to buy a phone with one to two months' salaries. And the price is not carved in stone. Should Apple feel the need to lower price to drive up demand, they'll always be able to.

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