Apple, China Mobile call off iPhone launch talks

Investors had cheered Apple possibly winning access to China Mobile's 350 million subscribers -- more than the population of the United States -- and news of talks over the device's potential launch in the world's largest telecoms market helped Apple's stock climb more than 10 percent on November 13.

Shares in China Mobile, the world's largest mobile phone operator, slid nearly 3 percent after Monday's announcement to HK$130.

Analysts had expected talks to fail at least initially, predicting that both parties would eventually lock horns over revenue sharing and a plethora of technical difficulties.

"It's not a surprise. China Mobile doesn't want to share its non-voice revenue," said Duncan Clark, chairman of BDA China, a Beijing-based telecoms research consultancy. "The two have very strong egos and, as in any relationship, that often doesn't work."

The iPhone, a cellphone that allows Internet access and plays music, sells for about $500 in the United States -- about double the average monthly salary in China.

Experts said last year the iPhone would have to navigate a spate of technical, content and fee issues unique to China, including a standard revenue-sharing agreement that China Mobile would be sure to dislike, before any launch could proceed.

The iPhone, one of the hottest gadgets to hit stores in the United States and Europe in 2007, might also be incompatible with China because of its "locked" SIM card. That meant it would not be able to piggyback another operator's network.

"Our parent has terminated talks with Apple over the iPhone," a China Mobile spokeswoman said, confirming several unsourced Internet reports.

RESURRECTION?