Apple Inc., ending six years of negotiations, has struck a deal to sell the iPhone through China Mobile Ltd., giving both companies a means to fight declining share in the market of 1.2 billion wireless subscribers.
China Mobile will sell the iPhone 5s and 5c models in its retail stores starting Jan. 17, the companies said Monday in a statement that provided no financial terms. Under the multiyear agreement, the phones for China Mobile’s network will also be available in Apple’s retail stores in China.
The deal means that Apple now has access to all carriers in the world’s biggest handset market, where Samsung Electronics Co. leads and smartphones using Google’s Android operating system dominate sales. For China Mobile, which has 763 million users, the deal may help draw high-end subscribers to its new fourth-generation network as the company faces its first annual profit decline in more than a decade.
“The China Mobile deal will significantly help Apple’s position in China,” Bryan Wang, principal analyst and country manager in China for Forrester Research, said Monday. “China Mobile will use the iPhone to win back some high-end subscribers who chose to defect to other carriers because of the iPhone.”
Apple stock rose Monday by $21.07, or 3.8 percent, to $570.09. Shares of China Mobile rose by 0.8 percent, to HK $80.55, or $10.39 U.S., in Hong Kong, paring this year’s decline to 11 percent.
China Mobile may add 12 million new iPhone sales for Apple in 2014, Katy Huberty, an analyst at Morgan Stanley, reported Dec. 16. The company sold 150 million in 2012.
Preregistration for China Mobile will start Wednesday, with pricing and availability to be announced at a later date, according to the statement. Apple declined to comment further.
China Unicom (Hong Kong) Ltd., the nation’s second-largest carrier, began offering the iPhone in November 2009, and third-ranked China Telecom Corp. followed in March 2012.
“It’s the last big gap in distribution” for the iPhone, Benedict Evans, an analyst at Enders Analysis in London, said after the announcement.
China Mobile had 62 percent of China’s total mobile subscribers at the end of October, down from 64 percent a year earlier and 67 percent at the same time in 2011, according to company data.
Samsung led the China market in the third quarter, followed by Lenovo Group Ltd., China Wireless Technologies Ltd. and Huawei Technologies Co., according to Canalys, a technology research company. Other homegrown phone-makers such as Xiaomi Corp. are also gaining traction.
Apple ranked fifth with 6 percent of China’s market during the third quarter, Canalys said in November. Apple’s potential customer base in China is limited by the cost of the iPhone, which is more than the equivalent of $700. Most buyers in China also don’t get the discounts and subsidies that customers in the United States enjoy. “Perhaps 100 million Chinese people can afford premium products such as the iPhone,” Evans said by email. “Important to note this isn’t quite 750 million new customers.”
Apple is seeking new users amid signs of saturation in the market for high-end handsets. CEO Tim Cook is under pressure to reignite growth and maintain the margins of the world’s most valuable technology company. Apple’s stock has risen by 7.1 percent this year, compared with a 28 percent gain in the Standard & Poor’s 500 Index.