Apple, China Mobile Still in Talks Over iPhone Distribution

Following up on the story that Apple settled on wireless carrier China Unicom to distribute the iPhone in China last week, Apple is apparently still in talks with China Mobile to sort out a distribution deal with the company.

According to Macworld UK, the talks between Apple and China Mobile, the world’s biggest carrier by subscribers, have reached no conclusion yet, a China Mobile spokeswoman said Tuesday. An Apple spokeswoman confirmed the company’s three-year distribution deal with China Unicom is not exclusive, but did not say if the company is in talks with other potential partners.

China Unicom will offer the iPhone 3G and iPhone 3GS, with the first handsets going on sale in the fourth quarter. The company began its talks with Apple two years ago, but China Unicom, which operates a 3G network compatible with the iPhone, became seen as the favorite for an iPhone deal in recent months.

One snag in China Mobile’s talks with Apple was the carrier’s plan for its own mobile application store, which was seen as a potential competitor with the iPhone App Store. Another was China Mobile’s use of a mobile standard for its 3G network that was domestically developed and is not compatible with current iPhone models.

The app store and 3G standard snags could remain in any talks. The China Mobile download store went online last month and supports handsets including “Ophones,” or devices that run a China Mobile operating system but have a layout very similar to an iPhone.

Some details of the iPhone launch could still pose problems for China Unicom as well, including how and whether revenue from the App Store should be shared, one analyst said.