“In this relationship, China Mobile has all of the power,” said Edward Zabitsky, chief executive officer of Toronto-based ACI Research. “China Mobile will offer the iPhone as soon as Apple gives in on price.”
It is, as the piece observes, rather an unusual position for Apple to find itself in: the weaker party in negotiations with a carrier.
Speculation has encompassed significant discounts, a contribution to marketing spend and even a share of App Store revenue.
“China Mobile certainly believes they should be able to get a part of the content pie,” said HSBC’s Tucker Grinnan in Hong Kong. “Apple is going to have to be a bit more flexible on how they approach that.”
We’d be pretty astonished if Apple were willing to go that far, but it does need to bring this deal home, and its press event in Beijing on 11th September (the day after its global media event) creates a deadline it has to hit.
Other possibilities are offering exclusives on new models for a limited time, or exclusive colors. Neither would be at all likely in normal circumstances, but these circumstances are far from normal.
We may never get to learn the precise terms of the deal, but one thing will be very visible: the cost of the handsets. In a country where low-cost handsets proliferate, the expectation is that China Mobile wants price concessions not to boost its margins, but rather to make the iPhone 5C in particular sufficiently attractive to local buyers.