Today: Apple (AAPL) CEO Tim Cook meets with the chairman of the world's largest wireless carrier, which does not currently sell the iPhone, and the company's beleaguered stock price gets back in the black. Also: Wall Street and Facebook gain, EU antitrust investigation of Google (GOOG) could force search changes.
Apple CEO meets with China Mobile, marketing exec says no cheaper iPhone
Apple CEO Tim Cook's quiet trip to China produced an important bit of news Thursday, as the top executive of the world's most valuable company met with the chairman of China Mobile, the world's largest wireless carrier and an important possible partner for the iPhone's continued growth.
Cook's journey to China has not led to many newsworthy developments, as the executive met with government officials and others behind closed doors. The successor to Steve Jobs did make a point to tell local media the importance of China to Apple, however, saying that he still believes China will become Apple's largest market in the near future, as his company expands the number of Apple Stores from the current 11 to more than 25.
Cook then met with the company that could do the most to help Apple accomplish that feat. China Mobile is the largest wireless carrier in that country and the world, with more than 700 million subscribers, but Apple has been unable to strike a deal with the mobile behemoth because of a host of technical issues and a demand from the company for better revenue-sharing.
"China Mobile and Apple still have to solve many issues, such as the business model, articles of cooperation and revenue division, but I believe we will reach an agreement eventually," China Mobile CEO Li Yue told Chinese media in late 2012.
Cook's meeting with China Mobile chairman Xi Guohua could have helped solve some of those problems though information was bare, relegated to a statement from China Mobile that the two "discussed matters of cooperation" at the company's headquarters. With many issues standing in the way, the talks could contribute to a future deal, but it is likely not around the corner.
Apple could make other moves in the meantime to boost its share in the Chinese market, one of which received a lot of play earlier this week: a cheaper iPhone. As Michael Clendenin, managing director at RedTech Advisors, told Reuters last month, "If they want to expand market share, probably the only way to do it here dramatically would be to put out a lower cost phone."
However, Apple executive Phil Schiller seemed to deny the company will produce a cheaper smartphone in a Wednesday interview with a Chinese media outlet.
"Despite the popularity of cheap smartphones (in China), this will never be the future of Apple's products," Apple marketing guru told the Shanghai Evening News.
While the company continues to focus on China and observers wait to see if a cheaper iPhone is actually going to arrive, third parties heaped praise on the Cupertino tech giant. Boston Consulting Group named Apple the most innovative company for the seventh consecutive year, while IFI CLAIMS reported that the company's patent haul increased substantially in 2012.
Meanwhile, investors pushed the company's shares up after two straight days of declines, with Apple stock increasing 1.2 percent to $523.51. Apple is still in "bear market" territory, with the price down 25.8 percent from the all-time high of $705.07 reached on Sept. 21, the day the iPhone 5 launched in the United States.
Wall Street falls as Chinese growth speeds up, HP's rise continues
Apple's rise helped the overall market advance Thursday, as all three major U.S. stock indexes gained with investors mirroring Apple in their focus on China. The Standard & Poor's 500 surpassed the five-year high it reached Friday after a report on Chinese exports exceeded expectations with double-digit growth, possibly boosted by the release of the iPhone 5, which is manufactured in the country.
"The market is encouraged by evidence of healing on the international front," Alan Gayle, senior strategist at RidgeWorth Capital Management, told Bloomberg News.
In Silicon Valley, the SV150 index outperformed the major U.S. stock indexes Thursday, gaining 0.9 percent. Hewlett-Packard (HPQ) continued its recent run of strong performances with 2.7 percent growth, despite a Bloomberg Businessweek article on the difficulties faced by the Palo Alto tech giant, which revealed that Apple co-founder Steve Jobs tried to save former HP CEO Mark Hurd's job. Facebook's recent revival also continued, as the company gained 2.3 percent to establish another new six-month high, and other social media companies followed suit: Yelp increased 6.9 percent, LinkedIn grew by 3.9 percent, and Zynga moved up 1.6 percent.
EU wants Google to change search, report on antitrust inquiry says
Google gained 0.5 percent as its chairman, Eric Schmidt, returned from a highly publicized trip to North Korea that showed how important he is to the Mountain View company as an ambassador. However, Google faces issues on another front, as a report said that the European Union's inquiry into antitrust charges levied by Google's competitors could lead to changes in the way the company's core search business works.
After American authorities strongly declared that Google is not breaking U.S. law by favoring its own products in search results, tech companies that compete with Google have hoped for a different outcome in Europe. On Thursday, the Financial Times reported that the official in charge of the EU inquiry flatly stated that Google will have to change their search results to avoid official antitrust charges on that continent.
"They are monetizing this kind of business, the strong position they have in the general search market and this is not only a dominant position, I think -- I fear -- there is an abuse of this dominant position," Joaquin Almunia, the EU's competition commissioner, told the paper.
Previous report said that Google had until the middle of this month to offer changes that would sate EU regulators.
Silicon Valley tech stocks
Up: Yelp, LinkedIn, HP, Facebook, Electronic Arts (ERTS), Netflix (NFLX), Symantec, Juniper, Zynga, Intel (INTC), Oracle (ORCL), Palo Alto Networks, Apple, VMware, Workday, SolarCity, Cisco (CSCO), NetApp
The tech-heavy Nasdaq composite index: Up 15.95, or 0.51 percent, to 3,121.76
The blue chip Dow Jones industrial average: Up 80.71, or 0.6 percent, to 13,471.22
And the widely watched Standard & Poor's 500 index: Up 11.1, or 0.76 percent, to 1,472.12
Check in weekday afternoons for the 60-Second Business Break, a summary of news from Mercury News staff writers, The Associated Press, Bloomberg News and other wire services. Contact Jeremy C. Owens at 408-920-5876; follow him at Twitter.com/mercbizbreak.