No Apple (AAPL) iPhone For China

Apple’s (AAPL) shares surged 11% yesterday. The Nasdaq was up sharply, which accounts for part of that. But, word that Apple was in talks with huge cellular company China Mobile (CHL) about putting the iPhone into China caused a great deal of the rally.

Not so fast. According to Reuters "the iPhone is unlikely to hit Chinese shelves soon because of technical and fee issues, industry executives said on Wednesday, a day after shares in the U.S. company shot up on hopes of a deal with China Mobile."

The head of China Mobile made a point of saying that the iPhone was unlikely to see his market anytime soon. China’s cellular companies see no need to share subscriber revenue with a handset company, and that is at the core of Apple’s model of its phone.

If Apple is going to push its revenue sharing model as the only way for Chinese cell companies to set up a partnership, the iPhone may not enter that market for years. That is great news for Nokia (NOK), Samsung, RIM (RIMM) and Motorola (MOT), who have smartphones of their own, but don’t require taking a cut of the house’s profits.

Douglas A. McIntyre

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