Apple (NASDAQ:AAPL) is close to signing distribution agreements with China Mobile Ltd. and NTT DoCoMo Inc., two of the major telecom operators in Asia, which would open the doors for the Cupertino-based company to 800 million potential customers, according to Bloomberg.
Apple’s next generation of iPhone will be unveiled on Tuesday, which will include for the first time a low-cost model for emerging markets. According to sources, the company is on the verge of clinching a distribution agreement with China Mobile, the largest telecommunications operator in the world by number of users. China Mobile will include in its offer the iPhone – Apple’s smartphone will be available at a discounted price depending on the subscription type.
Other sources close to the negotiations say that Apple is also close to sign an agreement with NTT DoCoMo, the largest mobile operator in Japan, which will also add the iPhone to its smartphone portfolio.
If the agreements with the two Asian operators will be confirmed, this would represent a major victory for Apple, as both companies were so far reluctant to include in their offer the iPhone. Apple would gain access to over 800 million potential customers. China Mobile has 740 million customers, and NTT DoCoMo serves 62 million users.
The U.S. company faces an iPhone sales decline as the developed markets are closer to saturation and the competition is becoming fierce.
Apple tried to negotiate for years with the two operators that were not pleased with significant cost reductions derived from the price that they would have to offer to their customers to promote the iPhone.
Sources close to the situation said, however, that Apple will reveal on September 10 a low-cost version of its flagship smartphone, especially for emerging markets such as China and India, with a huge potential for growth, a region where user preferences lean towards more cheaper phones.
IPhone generates more than half of Apple’s revenue. In the second quarter, the number of iPhones sold by the company decreased by 17 percent compared with the first three months of the year. Apple’s profit declined in the first half of this year and the company’s shares fell 6.4 percent.
China could be one of Apple’s biggest markets, where local manufacturers such as ZTE, Lenovo and Xiaomi offer cheaper smartphone alternatives, securing a significant percentage of market share.
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