According to a new WSJ report, Chief Executive Tim Cook stated earlier today that its deal with China Mobile will help bolster sales of the iPhone to hit a record high in Greater China in the fiscal first quarter. China Mobile Chairman Xi Guohua said millions of Apple's iPhones already have been ordered by the carrier's customers, signaling strong demand for the device. Sales of the iPhone through China Mobile, the world's largest carrier by subscribers, are set to begin Friday.
Speaking at a small media briefing to Chinese media and The Wall Street Journal, Mr. Cook said he is "incredibly optimistic" about the outcome of the cooperation with the Chinese carrier. The deal won't be limited to handsets and entails broad cooperation between the two companies, Mr. Xi said, but he declined to give further specifics.
Cook stated that "We've gotten to know each other…today is a beginning, and I think there are lots more things our companies can do together in the future. As of this weekend we will be selling iPhones in more than 3,000 additional locations. China Mobile already has a reach to many cities that Apple does not have a reach to."
The agreement will give Apple access to China Mobile's more than 700 million subscribers—roughly seven times the customers who use Verizon Wireless, the largest carrier in the U.S.
The Wall Street Journal's report concluded that "Analysts project the deal could bring Apple anywhere from 15 million to 39 million iPhones through the carrier in 2014." This supports our report posted yesterday that iPhone sales could double in 2014.
Q: What is the significance of the iPhone being launched through China Mobile?
Cook: What this partnership does is, it allow us to take the iPhone to a different level in China, to marry it with the fastest network, with TD-LTE [Time-Division Long-Term Evolution], for the very first time. As [China Mobile Chairman Xi Guohua] said, this is a new product, this is a world phone. Now you can take your iPhone in China use it on TD-LTE and if you travel to the United States you can now use it on FDD-LTE [Frequency Division Duplexing Long-Term Evolution network]. This is a big deal, it's huge, and so I couldn't be happier with how we're doing.
Q: How did the deal, that took six years in the making, come together?
Cook: The iPhone began to support TD-LTE in September, the licenses were issued in November and we announced the deal in December, so it actually came together fairly quickly. Within just eight to ten weeks after Mr. Xi and I met in Cupertino, I came to Beijing. Mr. Xi and I shook hands at that meeting and I knew then it was just a matter of working through some last details. And we spent some amount of time working through those, but the key really big meetings were in the fall of 2012 and January in Beijing in 2013, and then it was a matter of preparing the organizations and executing and working the details. I agree with Mr. Xi, this has been very much like a courtship and all of the discussions that China Mobile and Apple had over the time period before this laid a great foundation because they developed a mutual respect for both companies.
We were first to report in January 2013 that Apple had been secretly working with China Mobile for four years. Today this was confirmed.
Q: What do you think of China Mobile as a partner?
Cook: "We saw a company in China Mobile that was unlike any other company we had ever dealt with, that had enormous skill and enormous size and enormous scale and enormous talent, and so those discussions laid a great foundation. I can tell you that from my point of view, every meeting that occurred between 2008 and today was a good meeting. There were some great meetings, but all meetings were at least good, because we left with a better understanding of one another. Great relationships are not built on always agreeing, they're built on mutual respect, and they're built on trying to see the issue from the other lens and I think the time that we spent in allowing that to occur will be great for both companies, and more importantly for the customers that we both serve." You can read more on the interview here.
A Chinese report added earlier today that Cook noted that "Apple will reach more customers in third and fourth-tier cities after December's deal with China Mobile. Cook also noted that "Both Apple and China Mobile have a large customer base that 'will never leave,'" adding that "the deal will see both companies enjoying the benefits of an increasing number of satisfied customers."
Xi Guohua, chairman of China Mobilestated thatmore than 1 million iPhones have been booked during pre-orders. He did not specify pre-order amounts of iPhone 5S and 5C models."