During his visit to China this week, Apple CEO Tim Cook officially met on Thursday with representatives from China Mobile, the largest mobile telecommunications carrier in the world, to discuss “matters of cooperation,” according to Li Jun, a spokesman for China Mobile.
“In the morning, Apple’s CEO Tim Cook visited China Mobile’s headquarters,” Li said. “China Mobile’s Chairman Xi Guohua and Tim Cook discussed matters of cooperation.”
Li could not offer any more details as a result of a signed confidentiality agreement.
Apple, which recently started selling the iPhone 5 in China after country regulators approved the phone for a “network access license,” currently sells its iPhone 5 via China Telecom and China Unicom, two of the biggest Chinese service providers. However, now that Apple has essentially doubled its retail presence in China over the last 10 months, China Mobile may want to reconsider its position on the Apple iPhone.
A great deal of Apple’s strategy moving forward revolves around developing its presence in the Far East, including countries like India and China. Without China Mobile, the largest carrier in the country and the world with 703 million active subscribers, Apple would be missing out on a huge chunk of the market.
“Currently, Apple has 11 stores in the Greater China region, as well as many resellers,” Cook told local news portal Sina Technology News (via Reuters). “We will continue to expand in China and the number of retail stores we’ll have will exceed 25.”
China Mobile is the missing piece of the puzzle when it comes to Apple’s strategy in China, and Cook knows that; for years, even when he was Apple’s COO, Cook visited China Mobile’s headquarters on numerous occasions, including once in June 2011, when Cook was spotted and photographed in the company’s lobby.
Earlier this week, in a report mostly about Apple’s next-generation iPhone “6,” DigiTimes noted Apple’s plans to work with China Mobile to build a TD-LTE version of the iPhone, which will work on the carrier’s high-speed networks. Given how DigiTimes was correct about Apple’s intentions to work with China Mobile, it’s possible that the other allegations from that same report – including Apple’s plans to build a “low-cost iPhone” that may be bigger or smaller than the iPhone 5 – are also true.
"Apple will roll out a low-cost version of the iPhone for China and other emerging markets in the second half of 2013, according to supply-chain sources," DigiTimes said. "Some sources claimed that they have seen the sample of the low-cost iPhone, which will come with a larger display, meeting the prevailing trend for the adoption of 5-inch displays for high-end models. They added that the low-priced iPhone will also have a brand-new exterior design."
Digitimes' supply chain sources added that "growing sales of the iPad Mini, particularly in China and other emerging markets, may have served as an impetus for Apple to roll out a low-cost iPhone to repeat its success gained on the sale of the iPad Mini."
A low-cost iPhone makes a great deal of sense for Apple, especially if the company wants to formally partner up with China Mobile. Thanks to newer, smaller, cheaper, and more power-efficient chipsets, Apple can afford to build an entry-level to mid-range smartphone on top of the current iPhone – either bigger like the Samsung Galaxy S3, or a smaller “iPhone Nano” – to appeal to markets that can’t quite afford Apple’s most popular product, including many in China. Furthermore, if Apple’s iPhone 6 was not only cheaper but also smaller too, the phone would greatly appeal to the Asian markets where small devices are not only sheik, but better to hold in their (smaller) hands.
DigiTimes isn’t alone in believing Apple’s working on a newly-sized, low-cost iPhone. On Jan. 2, Topeka Markets analyst Brian White said Apple is likely to release its next iPhone in more colors and screen sizes, implying Apple might sell an iPhone smaller or larger than the current iPhone 5, or even previous-gen iPhone 4S or 4 units.
"Although Apple offers a 4-inch screen on the iPhone 5 and a 3.5-inch screen on the iPhone 4S and iPhone 4, the company has never offered multiple screen sizes for a single model," White said. "We believe this is about to change with the next iPhone offering different screen dies that we believe will allow Apple to better bifurcate the market and expand its reach."
Digitimes' sources and White are both saying the same thing: Apple wants to sell a lower-priced iPhone. We don’t know if the iPhone 6 will be bigger or smaller yet, but one thing’s for sure: A cheaper iPhone would help Apple penetrate those key, lower-income markets both here in the US and abroad.
However, it’s important to note that analysts, and even DigiTimes, can’t always be trusted at their words. For example, DigiTimes correctly predicted last December that Apple would launch two new iPads in 2012, including an iPad with a 7.85-inch display called "iPad Mini" in Q4 2012, and that's exactly what Apple did. On the other hand, DigiTimes incorrectly reported that Apple chose Samsung's quad-core Exynos processor to power its iPhone 5, when in fact Apple went with its own custom-built A6 chip. In other words, listen to the information, but understand that these are only rumors.
The iPhone 6: What We've Heard So Far
Besides different screen sizes and colors, we've heard that a major focus in the iPhone 6 will be the display. Apple might be going back to the drawing board, as the company is reportedly dissatisfied with the in-cell technologies used to make the iPhone 5's display, and is considering other options.
A Jan. 3 report released by The China Times said Apple might switch to a "Touch On Display" panel currently in development at Taiwan-based Innolux Corp., which has reportedly been licensed to use Sharp's proprietary IGZO display technology.
However, whether or not Apple chooses Innolux to make the next iPhone's screens, Apple is likely going to use Sharp's ultra-thin IGZO display technology for the next iPhone.
In late December, DigiTimes and Apple analyst Horace Dediu both mentioned Apple’s alleged investment in the ultra-thin IGZO displays produced by Sharp, predicting inclusion of the technology in Apple’s next batch of iOS devices, including iPhones and iPads. Dediu also pointed to Apple’s recent $2.3 billion investment in “product tooling, manufacturing process equipment and infrastructure,” believing the cash was used to help bail out Sharp, which had been in financial straits in 2012. Sharp is reportedly going “all in” on IGZO technology, so it’s possible Apple saved Sharp to leverage its investment in the next generation of displays.
IGZO display technology is not only thin and tough, but it can even handle higher screen densities than Apple’s Retina Display, which is visually stunning on its own. IGZO displays can reportedly handle display densities north of 330 ppi; for a quick comparison, the new iPad 4 can only achieve 264 ppi.
One of the better advantages of IGZO display technology is its lower power consumption. Most Apple products, from the iPhone 5 to the iPad 4, require cartoonishly-big batteries to achieve just 8 hours of power -- this is because current-gen Retina Displays are extremely power hungry. If Apple wanted its iPhone 6 to not only last longer during the day but also charge faster when plugged in, IGZO seems to be the way to go for the next generation of iOS devices.
Giving credence to these rumors, Taiwan-based AU Optronics (AUO) reportedly plans to develop a Retina Display for the next-generation iPad Mini, which may require IGZO technology to pull off a feasible Retina Display.
Besides these display rumors, we haven't heard too much about Apple will release in the iPhone 6. However, we have seen a few interesting patents: A patent filed in March but published in September described tactile keyboards, flexible displays and laser microphones and speakers built into an iPhone, designed to conform to the user's needs. Flexible displays would allow for easier holding and typing, while the highly advanced tactile screens would create buttons when needed so the user can feel "keyboard" letters as they type, or touch the topography on Apple's Maps.
It's wishful thinking that Apple would include all these technologies in the iPhone 6 rather implement them over time, but it's certainly fun to think about.
Apple sold 26.9 million iPhone units and 14 million iPad units in Q4 2012, and plans to announce sales figures for the iPhone 5, iPad 4 and iPad Mini during the company’s Q1 2013 earnings report, scheduled to release on Jan. 23.