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China Mobile deal with Apple may shake up mainland smartphone market

SAN FRANCISCO--It could be a huge breakthrough for Apple to win a place in the line-up of China's largest telecom provider and a big shakeup for the smartphone market.

A report in the Wall Street Journal said Apple had reached an agreement with China Mobile to bring the iPhone to customers in a market dominated by low-cost Android smartphones.

The Journal quoted unnamed sources as saying that the two companies have inked an agreement to add iPhones to the colossal telecom firm's roster of compatible devices later this month. China Mobile denied the report.

“Talks between China Mobile and Apple on cooperation are still going on and we currently do not have anything to announce,” the carrier's spokeswoman Rainie Lei told AFP.

Yet such a deal would be a major coup for the U.S. tech giant, which could gain a beachhead in the world's most populous nation,

China Mobile had more than 750 million subscribers as of October, according to Cantor Fitzgerald Research, which estimated that 35 million to 45 million iPhones were on the network despite the lack of a deal between the companies.

The market tracking firm estimated that Apple could sell as many as 24 million iPhones on the China Mobile network next year if it were added to the network's formal line-up.

Ben Thompson of tech new website Stratechery referred to Apple getting in synch with China Mobile “a very big deal.”

“Feel free to ignore anyone making snarky comments about China's average monthly wage being the same as the price of an iPhone 5C,” Thompson wrote in a blog post.

He listed two pertinent facts about China for Apple as there being “tremendous income disparity” and “a ton of people” in a country with a population estimated at topping 1.3 billion.

“China consumers appear to us to have a deep admiration for Apple's products,” Cantor Fitzgerald analyst Brian White said in a note to investors giving shares a “buy” rating.

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