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Last Updated: Monday, 14 January 2008, 13:46 GMT
Apple pulls China iPhone release
The iPhone has proved very popular
Apple and China Mobile have called off talks to launch the US group's popular iPhone handset to Chinese consumers.

Though no explanation was given in China Mobile's statement, there is speculation that the two firms failed to agree on a revenue sharing deal.

The news means the iPhone is unlikely to be released in China anytime soon.

China Unicom, the country's only other mobile network, said last year that while it had no plans to introduce the iPhone it remained open to the idea.

Negotiations 'ended'

Mobile phone analysts have long said Apple would struggle to introduce the iPhone in China.

The two have very strong egos and, as in any relationship, that often doesn't work
Duncan Clark, BDA China telecoms research consultancy

In addition to difficulty in gaining agreement over a revenue sharing deal, they have pointed to technical and content issues.

"We can only say that negotiations have ended for now," said a spokesperson for China Mobile.

The iPhone sells for about $400 (200) plus contract in the US, about double the average monthly salary in China.

Though out of reach for the great majority of Chinese, it is expected to prove very popular among the growing middle classes of Beijing, Shanghai and the other big eastern cities.

'Little effect'

Duncan Clark, chairman of BDA China, a Beijing-based telecoms research consultancy, said the failure of Apple and China Mobile to reach agreement was not a surprise.

"The two have very strong egos and, as in any relationship, that often doesn't work," he said.

BNP Paribas analyst Eric Wen said the failure to reach a deal would have little effect on China Mobile's outlook.

On the other hand, it could signal good news for China Unicom if it attempts to embark on an exclusive agreement to supply iPhones, he added.

The iPhone was launched in the US and Europe last year, where Apple chose a single network provider in each country.

Analysts expect the firm to repeat this strategy in Asia.

It is now continuing with talks to launch the handset in Japan.

China Mobile has 350 million subscribers - more than the population of the US.

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