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Apple: China to Become #1 Customer, Negotiating with China Mobile

January 14, 2013

While making his second trip to China as Apple’s CEO, Tim Cook told China’s state-run Xinhua news agency that China will one day become the company’s largest customer. Currently, China ranks as Apple’s biggest market.

“China is currently our second largest market. I believe it will become our first. I believe strongly that it will,” Cook told the Chinese news agency.

Cook also met with heads of China Mobile to “discuss matters of cooperation,” Reuters reported, a sign that Apple may be working towards a deal with the world’s largest carrier with over 700 million subscribers that would vastly open up the company’s presence in the country. Apple China already has deals Unicom and China Telecom to sell its iPhones in China, but have yet to forge an agreement with China Mobile due to disagreements on revenue sharing terms. Talks have gone on for years. China Mobile also uses a different 3G network from the rest of the globe, and Apple may need to wait until a new network usable by the mobile carrier is available before it could launch the iPhone on that network. China Mobile has indicated it would not release an iPhone until it had a working 4G network.

Cook also met with government officials in Beijing, including China’s minister for industry and information technology. He also met with high level executives from China Unicom.

Due to the lack of agreement with China Mobile, Apple has lost much in the China market to competition from other smartphone brand such as Samsung Electronics and Lenovo.

Cook did not indicate a timeline for making China its number one market, but indicated the company’s presence in the country would steadily grow. Apple currently has only 11 stores in China and Hong Kong, and plans to increase that number to 25.

Apple earned $5.7 billion in sales from China in the quarter through December, about 16 percent of its global efforts.

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Filed Under: Global, Hardware, Mobile, Staff Picks

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