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Biggest telecom hits iPhone market, challenges rivals

By  Li Qiaoyi (Global Times)    08:49, January 27, 2014
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With the launch of China Mobile's version of Apple's latest-generation of iPhones on January 17, the country's largest telecom can finally strut its 4G stuff after years of being under siege from its two rivals.

In a manifestation of how big the deal is for both sides, China Mobile chairman Xi Guohua and Apple CEO Tim Cook showed up for the debut in China Mobile's flagship store on Beijing Financial Street, dispensing signed iPhones to the first 10 customers, according to media reports.

"This is a watershed day," Cook told CNBC ahead of the official launch of its partnership with the Chinese telecom giant.

"It's a huge announcement. We're incredibly impressed with them. We have deep respect for them."

China Unicom and China Telecom, also bestowed 4G TD-LTE licenses by the government in December, have yet to release their 4G services.

The appearance of 4G advertising can be found on China Unicom's website, but instead of introducing its 4G service, the ads tout upgrading of its 3G network to 42 megabits per second (Mbps).

A network with that speed rate has already been recognized as 4G networking in many countries, the ad said. When China Unicom gets its FDD-LTE license, the rival technology standard to China's homegrown TD-LTE, China Unicom phone users can expect a faster network with download speeds peaking at 150 Mbps, it said.

As for 4G services based on homegrown TD-LTE technology, the telecom carrier is still preparing. The rollout is likely to be unveiled in the first half of the year, a customer service employee at the Beijing branch of China Unicom's 10010 hotline told the Global Times on Wednesday.

The timeline remains uncertain, the employee said.

The smallest of the three telecoms, China Telecom jumped onto the iPhone bandwagon in 2012.

Moving to 4G would appear a challenge.

The carrier, which plans to launch its LTE services in the first quarter of 2014, said in a statement released on its website Tuesday that it had set an annual target of 36 million 4G terminal sales this year.

A substantial slowdown in the two smaller telecoms' appeal to new 3G subscribers was indicated by December operating data released by the three telecom operators on Monday.

China Mobile bagged 10.5 million new subscribers for its 3G network, while China Unicom reported an additional 3.52 million and China Telecom 730,000.

The slowdown was "mainly due to increasing market competition driven by the launch of the LTE service and strengthened marketing promotion by its peer," China Telecom said Monday while releasing the operating data.

Nearly 60 percent of 51,784 Web users surveyed said they had little expectations of the 4G era, citing expensive rates as their main concern, the Beijing-based China Youth Daily reported on January 14.

As of January 13, China Mobile said it had received pre-orders for 1.2 million iPhones since December 25, without breaking down those pre-orders into either the iPhone 5S or the iPhone 5C, CNBC reported.

China Mobile's partnership with Apple is unlikely to spur sales of China Mobile iPhones as its two competitors have already sold the models for about three months, CK Lu, a senior analyst at research firm Gartner Inc told a media briefing in Beijing on Tuesday.

"The launch of the next-generation iPhone will truly reflect the clout of China Mobile as the three carriers will have the same starting point at that time," Lu said.

As for the impact of 4G services on a slowing smartphone market after the last few years' rapid expansion, the analyst said, hopes for overwhelming growth could turn out in vain.

The Chinese smartphone market would nonetheless remain promising compared to the more worrying worldwide landscape.

Global shipments of smartphones will post a quarterly contraction of 5.1 percent in the first quarter of 2014, the first negative growth for the gadgets, Taiwan-based research firm TrendForce Corp said Monday.


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(Editor:YanMeng、Huang Jin)

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