iPhone Hits a Chinese Wall

The Chinese apparently did not get the memo about Apple hoopla during the week of Macworld.

China Mobile has announced that it has ceased talks with Apple about introducing the iPhone in China. The prospect of the iPhone in a booming new market like China, where there are an estimated 350 million cell-phone users, has been mouthwatering to Apple shareholders.

A spokesman for China Mobile declined to comment on reasons for the termination, but industry analysts have long suspected that the companies would have difficulty agreeing on a revenue-sharing arrangement.

MarketWatch cited an official at China Mobile's data-services department as saying that the company was unwilling to accept Apple's request for a 20 to 30 percent share of China Mobile's user fees from future iPhone users.

While the Chinese market has enormous potential, Apple would still face a number of technical and content issues. The United States retail price of about $400 for an iPhone is nearly double the average monthly salary in China.

The wildly successful iPhone is already available in the United States and Europe, and Apple plans to expand into Asia this year. If the tech giant fails to resume negotiations with China Mobile, it may find another potential Chinese partner in China Unicom.

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iPhone-Hits-a-Chinese-Wall/?TID=partnershipbadge