China Mobile has trotted out several spokespersons to unilaterally offer up “talks have ended” statements to the press. These official statements were succinct:
“iPhone model is not suitable for China,”
“We have held talks with Apple to launch the iPhone device in China. However, those talks have ended.”
Apple spokespersons have consistently responded to these China mobile statements with a “no comment.” The notable exception being Steve Jobs’ comment during a January 15, 2008 interview with CNBC’s Jim Goldman.
Steve Jobs: “It’s very strange … we’ve met once with one of their representatives. There have never been any ‘hot and heavy’ discussions either ‘on’ or ‘off’ … someone is just making this stuff up.” See Video Here
There has been minimal follow-up commentary from the China Mobile spokespersons … “We have no other news to report,” China Mobile spokeswoman Li Honghui told the Associated Press. Yet there have been a few bright slivers of light shining through this partially closed door. When pressed by reporters, China Mobile spokeswoman Rainie Lei would not elaborate except to say that China Mobile “has not ruled out reviving discussions at some stage, if necessary.”
A handful of reporters sought out comments from higher sources … and they’ve been rewarded for their efforts. China Mobile’s Deputy General Manager of Data Services, Gao Nianshu, has been the most talkative. Mr. Nianshu was speaking at an industry conference and was quoted (apparently to his displeasure as he felt his comments were off the record) as saying that negotiations were terminated because Apple “wanted to become the controller of the value chain” (i.e. gain a share of subscriber revenues). Nianshu noted that Apple was seeking a “20% or 30%” share. He said discussions with Apple did not go very far. Nianshu said Apple argued that because it (Apple iPhone) was offering an end-to-end solution, including content and mobile applications, operators should share their revenue. “Of course we disagreed, not because we want to control this value chain, but because we consider the value chain should exist and be developed by all.” Nianshu went on to say that Apple’s strength was as a handset provider, with good data connectivity and browsing but weak voice functionality. “This shows its specialty as a traditional IT equipment company: the telecom side is not what it is good at.” Nianshu said the companies (Apple and China Mobile) took part in at least two (2) rounds of talks. He went on to say that Apple iPhone’s current lack of MMS was a point of contention. Despite the failure to agree, Nianshu revealed preparations were underway for further negotiations between China Mobile and Apple.