Apple, China Mobile Talking as Cheaper iPhone Rumor Is Debunked

By Craig Galbraith Comments
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Editor's Note: Click here for our complete breakdown of the iPhone 5.**

Apple has to be drooling at the prospect of partnering with China Mobile, the world's largest wireless operator, and its 700 million subscribers. Almost one-third of those subscribe to 3G service capable of running data on the iPhone.

China Mobile is the only major Chinese wireless operator with which Apple doesn't have a partnership, but that could soon change. The Silicon Valley giant's CEO, Tim Cook, met with the carrier's chairman on Thursday in Beijing to discuss the logistics of bringing the iPhone to China Mobile, the Wall Street Journal reported. "Shipment commitment and handset subsidy" are likely the key sticking points in the negotiations, a CLSA analyst told the WSJ.

While neither side would comment on the talks, this could be the first real step to a team-up between the global giants, one that's been rumored for at least a couple of years.

Speaking of Apple rumors, one that's run wild this week might disappear as quickly as it showed up. Phil Schiller, Apple's senior vice president of worldwide marketing, told the Shanghai Evening News, a Chinese newspaper, that an iPhone mini (or even a less expensive, larger-screen device made of cheaper comoponents, as some have imagined) isn't a fit with the company's strategy.

Roughly translated from Mandarin, Schiller said that some manufacturers may be using cheaper smartphones to replace feature phones, but "it is not Apple's product development direction." They might be popular since they're less expensive, the paper quotes Schiller as saying, but Apple is satisfied with having 75 percent of the profit in smartphone sales in China, even if it only has 20 percent market share.

So while Schiller's comments might not shut the door completely, don't expect to see a $99 iPhone in emerging markets later this year.

Follow senior online managing editor @Craig_Galbraith on Twitter.

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