Corporate China4G, Apple deal near with new smartphone approvals

Local media are buzzing with word that China's telecoms regulator has just approved four smartphones for use on the nation's upcoming 4G networks, implying the long-awaited issue of 4G licenses could be imminent. But equally interesting is a separate report that says the number of newly approved phones is actually five, and that the fifth phone was a version of Apple's (Nasdaq: AAPL) new iPhone 5S that can operate on networks using a homegrown Chinese technology called TD. That report says Apple requested its iPhone approval be kept secret; but if true, it means we could soon see announcement of a long-awaited tie-up between the US tech giant and leading Chinese mobile carrier China Mobile (0941.HK; NYSE: CHL).

The bigger picture in all this is that China's Ministry of Industry and Information Technology (MIIT), after years of foot-dragging, finally looks set to award its first batch of 4G licenses. Most other countries awarded 4G licenses long ago and many already have functioning commercial networks, which allow for easy use of data-intensive functions like video. Previous reports indicated the MIIT could issue licenses around the October 1 National Day holiday, and that the first batch of licenses would only allow the nation's three wireless carriers to operate networks based on the homegrown technology known as TD-LTE. 

According to the latest reports, the MIIT has officially approved four cellphone models for use on the upcoming 4G networks, one each from homegrown giants ZTE (0763.HK; Shenzhen: 000063) and Huawei, one from Korea's Samsung (Seoul: 005930) and one from Japan's Sony (Tokyo: 6753). ZTE has put out its own press release on the matter, saying its Grand Memo LTE model was the first to receive official MIIT nod. 

The fact that all four newly approved models can run on TD technologies also seems to confirm reports that TD-LTE licenses will be awarded. Separate licenses probably won't come for another year or more for the more mature, globally accepted 4G technology called FDD-LTE, which is favored by the nation's two smaller telcos, China Unicom (0762.HK; NYSE: CHU) and China Telecom (0728.HK; NYSE: CHA).

China smartphone watchers will note that the list of four approved models comes from three of the nation's top smartphone makers, with the addition of Sony. But equally notable is who wasn't on the list, most notably homegrown players Lenovo (0992.HK), Coolpad and Xiaomi, and then of course Apple.