Apple Will Not Get China Mobile Deal Today

12/18/13 9:42AM EST

Apple Will Not Get China Mobile Deal Today Apple Will Not Get China Mobile Deal Today

Image via Hung Chung Chih/Shutterstock

Apple Inc. (NASDAQ:AAPL) was set to seal up a deal with China Mobile in recent weeks according to reports. The world’s largest mobile carrier was, according to the same report, supposed to announce a deal to offer the iPhone at a conference today. That announcement does not seem likely, however.

According to Reuters China, China Mobile (NYSE:CHL) Chairman Xi Guohua said that the company was still in talks with Apple Inc. (NASDAQ:AAPL), and no announcement was in the works for today. The revelation sent shares in Apple down more than 1 percent in this morning’s pre market.

China Mobile Deal

Apple Inc. (NASDAQ:AAPL) needs to take China in order to continue to grow. The company has a couple of problems in the country, which is its second biggest market. The first is the pricing of its smart phones. Only a small proportion of the country’s population is actually able to afford an iPhone. The second problem the company has is availability, and that’s where China Mobile comes in.

China Mobile is the biggest wireless operator in China. The company’s 3G network caused problems for Apple, and lead to years of iPhone delay. It is in the interest of both firms to bring the iPhone to China Mobile, and the technical problems are receding. Apple’ new iPhones are compatible with a wider range of wireless standards and China Mobile is launching a new 4G network that is fully compatible with the iPhone.

Analysts are of the opinion that a deal with China Mobile is inevitable, but that opinion has been around for a long time. The company is not going to announce an Apple deal today. That means Apple’s fourth quarter results will not be boosted by sales in China, and the company’s shareholders will have to wait at least another quarter to see the take up.

A deal between the companies may be inevitable, but it’s taking an awful long time. The potential of the deal is the only thing that keeps it in the minds of shareholders, but they’ve bee waiting a long time for no reward.

Apple China Problems

A couple of years ago Samsung was just another Android OEM. The company was the biggest among them, and it had what were arguably the best devices, but it didn’t have all that much power. Things are different now, and Apple Inc. (NASDAQ:AAPL) investors are worried about the company’s performance in China.

Samsung has sold millions of phones in China, and it’s performance in the country makes Apple efforts look silly. The firm is trying to make Android its own. And it’s trying to keep users inside the Samsung ecosystem. Apple has still not managed to create a massive imprint in the country because of the expense of its devices and the lack of China Mobile support.

Disclosure: Author represents that he has no position in any stocks mentioned in this article at the time this article was submitted.