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Apple eyes bigger slice of Chinese market

Updated: 2011-07-19 16:13

(Wall Street Journal)

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Apple eyes bigger slice of Chinese market

The Apple Inc logo is seen in the lobby of New York City's flagship Apple store in this Jan 18, 2011.[Photo/Agencies] 

Apple Inc is getting closer to offering the iPhone through China's largest mobile carrier, China Mobile Ltd, giving the company access to hundreds of millions of new customers.

The effort is Apple's latest move in the Chinese market, which could play a central role in the company's growth plans.

Apple has long used Chinese factories to assemble its gadgets. But recently, Apple has begun targeting China's growing consumer class, opening its first retail stores and marketing its products, from Mac computers and iPad tablets to its iPhone.

Apple's role in China will expand greatly if China Mobile begins offering the iPhone. The iPhone has been available in China through the country's second-largest carrier, China Unicom (Hong Kong) Ltd, since 2009. But China Mobile, which is the world's largest carrier, has 600 million subscriber accounts, compared with fewer than 200 million at China Unicom.

Still, many challenges face Apple, such as government technical requirements that phones use an unusual wireless Internet technology, and the huge market for gray- and black-market electronics, where users can easily buy modified iPhones from overseas as well as fake iPads.

Tim Cook, Apple's chief operating officer, last month visited China Mobile's offices in Beijing. Both companies declined to comment on Mr Cook's rare visit, but the carrier confirmed the two companies are in talks about the iPhone. An Apple spokeswoman said the Cupertino, Calif, company's strategy is to offer the phone to as many carriers as possible.

Based in Cupertino, Calif, Apple has historically focused on its home US market, with the Americas region generating 38 percent of the company's $24.7 billion of revenue in the March quarter. But Apple is again expected to post strong China sales Tuesday when it reports earnings for its June quarter. Indeed, China is already Apple's fastest-growing region in terms of sales, despite the fact that the company has opened only four Apple Stores in the region.

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