Apple had been in talks with China Mobile about a possible tie-up to get the iPhone onto Chinese shelves, another potentially huge market for one of the fastest-selling gadgets in the West. However, the electronics giant has apparently been forced to give up on the idea for the time being after failing to reach an agreement with its prospective partner.
China Mobile refused to elaborate on why the talks ended, but the likelihood is that it didn’t like the terms of the revenue-sharing arrangement Apple was offering. Given that Apple is incredibly possessive about its brand and technology, and the Chinese normally insist on a taking at least 60% of any joint ventures in the country, it was always going to be a long shot. Apple can boss around the mobile operators in the US and Europe, because they're all so desperate for its business - but that approach is never going to work in China.
The cancellation of the talks means there’ll be no iPhones in the country for the foreseeable future. Apple’s only other option as a partner is China Unicom (which has expressed interest in the past), but it would presumably take some time to hammer out a deal.
It’s almost exactly a year since Apple boss Steve Jobs announced the iPhone to a slavering public at the MacWorld Expo & Conference. This week he’s back there again, and the rumours have been flying about what he’s got up his sleeve this time around. Bookies’ favourite is a 3G iPhone. Jobs chose to launch with the ‘2.5G’ EDGE technology last year, on the grounds that the extra power required by 3G technology would ruin the iPhone’s sleek looks. However, the chips have now got smaller and faster, so he can upgrade the technology without turning the phone into a brick.
The only downside is that it’s not likely to do its Chinese prospects much good. The current version of the iPhone is already eye-wateringly expensive, leading some analysts to wonder whether it would be too pricey for the Chinese market. And a 3G version is likely to cost even more. So maybe its Chinese expansion plans will have to be put on hold for a while yet...