More Apple coverage

CUPERTINO -- Apple (AAPL) on Wednesday sent out cryptic invitations around the world to events next week that are being seen as an indication the company will reveal a major iPhone deal with the world's largest wireless carrier, China Mobile.

An agreement with China Mobile would give Apple the last major international carrier without an iPhone, and would open up a Chinese market as big as the combined U.S. iPhone market shared between AT&T and Verizon, said analyst Brian Marshall of ISI Group.

FILE - In this Oct. 20, 2012 photo, people line up to enter a newly-opened Apple Store in Wangfujing shopping district in Beijing.
FILE - In this Oct. 20, 2012 photo, people line up to enter a newly-opened Apple Store in Wangfujing shopping district in Beijing. (Andy Wong/Associated Press)

Talk of a possible Apple-China Mobile agreement took off during a high-profile July visit in China between Apple CEO Tim Cook and Xi Guohua, chairman of China Mobile, which boasts 710 million customers.

Apple has not provided any details, but tech blogs and others expect the company Tuesday to make an announcement in Cupertino about an updated iPhone 5 and a low-cost iPhone called the 5C that would appeal to the Chinese market. Some reports insist that Apple also will unveil an iPhone in gold, a color that represents prosperity and influence throughout much of Asia.

The invitations Apple sent out Wednesday are to events in Berlin, Tokyo and Beijing, scheduled to be held after the Cupertino announcement. While Apple has scheduled international events before, it is unusual to have three scheduled at once and an apparent first for China, which has a huge appetite for smartphones.


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Apple did not respond to a request for comment.

Gartner analyst Ken Dulaney said Apple needs an alternative to the pricey iPhone 5, which would help the company get a stronger hold in the China market.

"They've always needed a lower-cost device," Dulaney said. "By making their announcement in other countries, they want to increase their share and stave off the Android flood, especially in Beijing."

In China, the iPhone is currently carried via China Unicom and China Telecom, which are considered "third tier" carriers. And in its third-quarter earnings report, Apple said its overall sales in China, which includes Hong Kong and Taiwan, had fallen 14 percent from the year before, to $4.6 billion.

So an Apple-China Mobile agreement makes sense to Dulaney.

"It would have to be something big to get it (sales of a low-cost iPhone) going," Dulaney said. "If you don't have a carrier involved, they're not going to sell anything."

Tim Bajarin, president of Creative Strategies, said reports of Apple's multinational announcement mean the company is "embracing these markets in a more proactive manner. Apple has a pretty good presence in China already but they're a minority player in that market. And we've been waiting for them to make a more aggressive move. In China, a potential lower-cost iPhone and a distribution agreement with China Mobile could overnight make Apple a more serious player in the Chinese market."

Even if Apple does not announce an agreement with China Mobile on Tuesday, Wall Street investors should still be encouraged by the July meeting, Bajarin said.

"The fact that the CEO of China Mobile and Tim Cook have made positive remarks suggests it's moving in the right direction," Bajarin said. "From an investor's standpoint, it's important that it's at least it's moving in a positive direction."

During his trip, Cook said he was confident that China will become Apple's largest market in the near future.

"We will continue to expand in China and the number of retail stores we'll have will exceed 25," Cook was quoted as saying by news portal Sina Technology News.

Later, in a conference call with reporters after Cook's visit, MSN Money quoted Xi as saying,

"We are actively negotiating and both sides are keen."

He also added, without elaborating, "There are still some commercial and technology issues that need time to resolve."

Roger Kay, an analyst with Endpoint Technologies Associates, expects a big announcement that will bolster Apple's international presence.

"Why have big events in these different regions if they don't have a major partnership to announce at the same time?" Kay asked. "It makes sense to me. But it's all rumor parsing."

Contact Dan Nakaso at 408-271-3648. Follow him at Twitter.com/dannakaso.