Apple's iPhone has finally arrived on China Mobile, the world's largest wireless carrier with more than 760 million subscribers. Apple CEO Tim Cook and China Mobile Chairman Xi Guohua were in the country for the launch today, and personally gave customers their brand-new iPhones.
Having fun in Beijing at the iPhone launch with China Mobile! pic.twitter.com/AqoqLbbeO7— Tim Cook (@tim_cook) January 17, 2014
Cook tweeted a photo of himself (above) surrounded by media at the launch of the China Mobile iPhone in Beijing today. Bloomberg reports that, during the launch, Cook was asked about the prospect of a larger iPhone, to which he replied: "We never talk about future things. We have great things we are working on but we want to keep them a secret. That way you will be so much happier when you see it."
CNBC's Eunice Yoon says that ten lucky customers received an iPhone signed by both Guohua and Cook.
The partnership should help Apple increase its share from fifth position in the growing Chinese market, and Apple CEO Tim Cook has said that he is "incredibly optimistic" about the opportunities that the partnership opens up.
And rightly so, too, as China Mobile Chairman Xi Guohua has said that orders of the iPhone were 1.2 million as of 13 January, after pre-orders opened up in December. Foxconn has reportedly shipped almost 1.5 million iPhone 5s units to China Mobile this week.
When asked about the deal with China Mobile by The Wall Street Journal, Cook said: "We've gotten to know each other… today is a beginning, and I think there are lots more things our companies can do together in the future."
In a rare public interview following his chat with WSJ, Cook sat alongside Guohua to discuss the partnership with CNBC.
During the interview, Cook described the partnership as a "watershed day for Apple," and said that he has "deep respect" for China Mobile.
"We see this as bringing the world's best smartphone to the very largest and now the fastest network in China," he added.
While Tim Cook remained tight-lipped about the exact sales figures achieved thanks to the China Mobile deal, Guohua did say that, as of 13 January, the carrier's iPhone pre-orders had reached 1.2 million.
Apple already sells its phones in China through two other carriers in the country - China Telecom and China Unicom - but a deal with China Mobile, the largest in the country, had eluded it for some time. One reason is that China Mobile uses a different wireless telecommunications standard from its competitors.
It's clear that China has the potential to be a huge market for Apple, but it's likely that the company will need to make its iPhone more affordable to attract larger numbers of customers in the emerging market. Apple's iPhone 5c, while cheaper than the flagship iPhone 5s, is still significantly more expensive than rival smartphones available in China. However, Cook's comments suggest that payment plans may be Apple's way of making the iPhone accessible, rather than a new, cheaper device.
"Apple has always been about making the best products, not the most products, so that's always our North Star and that's not going to change ever," Cook said.
According to Bloomberg, the iPhone 5s is available on a two-year contract at 588 yuan, around £60 per month, if they want the fully subsidised deal.
The iPhone 5C was expected by some analysts to come in price points competitive with Chinese-made Android smartphones. Instead, Apple stuck to its premium brand strategy.
Even so, researchers believe that Apple will boost market share and rake in revenue from an expansion in the country. "Thanks to its cooperation with China Mobile and the launch of low-cost iPhone, iOS will see a rapid growth in 2014, and ... its market share [in China will] double that of 2013," market research firm IDC forecast in September.
Apple's share of the Chinese smartphone market reached 8 per cent in the third quarter of 2013, according to research firm Canalys. Samsung Electronics was the largest player with a 21 per cent market share, followed by Lenovo with a 13 per cent share. Local player Yulong Computer Telecommunication with 11 per cent market share and Huawei with 9 per cent share took the third and fourth places.
Analyst's estimates about Apple's potential additional iPhone sales thanks to the China Mobile deal vary, with predictions ranging between 10 and 30 million.
Research firm Trefis estimates that China Mobile could sell around 1.5 million iPhones every month, which would equate to 20 million additional iPhone activations in a year, representing a 17 per cent increase from iPhone sales in 2013.
Mizuho Securities analyst Marvin Lo has said that at least 10 per cent of China Mobile's subscribers would be potential iPhone buyers, so Apple's iPhone could soon begin eating away at Samsung's China market share.
The China Mobile deal is expected to be a focus of Apple's upcoming earning call, set to take place on 27 January.