Apple falls on China Mobile comment
Shares of iPhone company drop further after Chinese telecoms chief hesitates on network deal
Apple shares fell further yesterday after China Mobile chief executive Li Yue said he would not add the iPhone to the world's largest wireless network without a deal favourable for his firm.
"The business model and benefit sharing still need further discussion," Li said in Guangzhou.
Technical issues related to the carrier's home-grown third-generation network standard would also need to be resolved, he said.
The iPhone is not available to most users in China, as Apple has yet to reach an agreement with China Mobile, which had 703 million subscribers at the end of October, including 79.3 million users of high-speed, third-generation services that give smartphones faster internet access.
Apple's iPhone is available with the nation's two smaller carriers - China Unicom and China Telecom, both of which sell it with a subsidy. The new iPhone 5 will begin sales with those carriers next week.
"Li's comment suggests that China Mobile has no intention of simply gifting Apple access to its huge subscriber base without extracting a pound of flesh from Apple," said Teck Zhung Wong, a Singapore-based analyst with market research firm IDC.
Apple fell 2.1 per cent to US$527.33 in early New York trading. On Wednesday, the shares posted their biggest drop since December 2008, sending its market cap below US$500 billion.
Meanwhile, Nokia would sell a version of its flagship smartphone, Lumia 920T, a device based on Microsoft's Windows Phone 8 software, the firms said.
"Nokia announced that they are launching one of their Lumia phones with China Mobile, and there was some hope that Apple would launch their iPhone on that network," said Gus Papageorgiou, an analyst with Scotia Capital. "I think they still will, but they'll probably launch closer to Chinese New Year [which begins on February 10]."
In another announcement that may be fuelling Apple stock's slide, IDC said Apple's share of the tablet market would fall to 53.8 per cent this year from 56.3 per cent last year, while Google's portion would rise to 42.7 per cent from 39.8 per cent.
Meanwhile, Apple chief executive Tim Cook said the firm planned to spend more than US$100 million next year on building Mac computers in the US, shifting a small portion of manufacturing away from China.