CNBC: Apple can dominate the Chinese market with iPhone 5

CNBC published an article today stating that Apple has been trying to dominate the Chinese smartphone market for years, and the company's latest iPhone may help achieve this goal. The breakthrough seems to be the upcoming cooperation with China Mobile, the largest mobile service provider in China. Apple has been trying to sign an agreement with China Mobile to sell iPhones, but the cooperation has been delayed due to technical incompatibility.

But the iPhone 5 will already support the frequency bands that China Mobile has chosen for its domestic 3G network, paving the way for the two sides to sign a deal as early as early 2013 - a partnership that analysts say could double iPhone sales in China.

If China Mobile can convince its premium users, about 4% of its 683 million users, to switch to the iPhone 5, it could add 27.3 million smartphones to Apple's sales, according to HSBC, which estimates there are about 22 million iPhone users in China today.

Tucker Grinnan, regional head of telecoms research at HSBC, said in an interview on Thursday that "this will mean a significant increase in Apple's sales in China," adding that the partnership would be a "game changer" for Apple's development in China.

Apple, which has a 10 percent share of China's smartphone market, trails only Samsung Electronics Co. Ltd. with 19 percent, but has lost ground in recent months as local rivals such as ZTE Corp. and Lenovo Group Ltd. have introduced competing products.

Goodman said Apple is expected to be more aggressive in its global rollout of the iPhone 5, which he called "Apple's most extensive new product rollout to date."

“They are talking about signing up 100 operators by the end of this year, bringing coverage to 240 countries. This is a much broader rollout. In the past, countries like Hong Kong were not included in the initial launch, but this time they are included. So it seems that Apple will greatly expand its addressable user base, and China Mobile should become one of the company’s top customers in the next year or two,” said Gu Delian.

In terms of compatibility, Wedbush Securities analyst Scott Sutherland pointed out that the new iPhone also has some special features that attract Chinese consumers.

He said: "iPhone 5 brings us many new features: Chinese integration, social networking sites, Siri will support Chinese, once again emphasizing that they attach great importance to the software functions of the phone."

IDC analyst Melissa Chau believes that although adding China Mobile as an operator partner in China will have a huge impact on Apple's performance in China, the company's development may be relatively limited.

She said existing Apple users might switch to the iPhone 5, but the company would have trouble attracting new customers.

“If we’re talking about new users, I think it’s a little bit tricky because a lot of this market is actually in the low-price segment for new users, and if this product doesn’t come into the Chinese market for less than an iPhone 4s or 4, it’s going to be hard for Apple to break into that market segment in that sense,” she said.