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China Telecom, the smallest of the three telecoms operators in China – but with more subscribers than Verizon, the US's second-largest carrier – is to start selling Apple's iPhone by the end of the year, according to sources.
Apple would have to sell the CDMA version of its phone, presently sold through Verizon in the US, to work with the systems used by China Telecom. But the move could potentially more than double the number of potential buyers of the device, which was only introduced in January: China Telecom has more CDMA subscribers – 105.9 million in May – than Verizon, which was the first carrier to get the CDMA iPhone this year.
The move will also help China Telecom cement more 3G users in a competitive market in which handset subsidies offered by carriers are squeezing margins.
China has 896 million mobile phone users, a number bigger than the entire population of Europe. There are three telecommunications operators: China Mobile Ltd , China Unicom and China Telecom.
So far, China Unicom is the only operator to sell iPhones after signing a three-year agreement with Apple in 2009, although it is not based on a revenue-sharing scheme, unlike some other operators in other countries. China Unicom uses GSM technology, the same as that used in the versions on AT&T and European carriers.
"The reason telecom operators are fighting for the iPhone business is because everybody is trying to grab as many 3G users as possible," said Jane Wang, an analyst at UK-based research firm Ovum. "The only way to keep costs down is to build up such a user base."
Apple reports its third-quarter results next week. Analysts are forecasting that it will have sold between 15m and 20m iPhones, with an average of 17m. In the first quarter of the year it sold 18.6m. It is expected to unveil at least one new iPhone this September.
In May, China Telecom chairman Wang Xiaochu told a news conference that the carrier had contacted Apple to launch the iPhone based on CDMA (code division multiple access) technology.
"It's expected to happen this year. China Telecom already has the required technology and it all hinges on the content of the agreement. As we all know, it's not easy to negotiate with Apple," a source close to the company, speaking on condition of anonymity, told Reuters.
China Telecom was expected to introduce the iPhone in November, said another source.
Apple just released the iPad 2 last March, but the device expected in September wouldn't be completely new, reports say, but a high-definition version of the current model with double the screen resolution, or 2048 by 1536 pixels.Geared Toward ProfessionalsCiting inside sources, Joshua Topolsky of ThisIsMyNext described the relationship between the two devices as similar to that of the MacBook and MacBook Pro, geared less to ordinary consumers than to professional users. The "iPad HD" would suit video Relevant Products/Services and photo production, possibly with a special iPad version of Final Cut filmmaking and Aperture photo editing software, he said.That report is backed up by a research note by FBR Capital Markets analyst Craig Berger, who hears that Apple has put out a request for price quotes from Chinese manufacturers for components for an "iPad Plus."Rolling out both a newer iPad and an iPhone 5 would be a great way for Apple to show off its latest mobile operating system, iOS 5, which is due in the fall with some 200 additional features. And the new HD tablet could mark a shift in the company's marketing strategy."Rumors of a 'professional-grade' version of iPad don't seem too far-fetched," said mobile devices analyst Jeff Orr of ABI Research. "The company has a loyal following in the entertainment and content creation industries. However, creating a product focused on content interaction and editing seems a distraction from the greater need for a professional media tablet that cuts across job descriptions in the enterprise Relevant Products/Services today. "Orr noted that Apple's financial briefings have stressed the corporate response to iPad, while its marketing focuses on the ordinary consumer."Building a rugged, reliable and secure solution for the workplace appears to be a much bigger opportunity," said Orr. "Allowing a movie director to review the digital dailies on a media tablet is 'cool', but not essential. The ability for a media tablet to enhance existing workflow in the media industry will be the measuring stick for success."An Even Thinner iPhoneThe Wall Street Journal reported this week that, according to its sources, the iPhone 5 will launch by the end of September with a more powerful, eight-megapixel camera and a thinner and lighter design -- but still only a moderately different version of the current iPhone.A person familiar with the matter told the Journal that Apple would include the Qualcomm chips it installed in the Verizon Wireless version of the iPhone 4, released in January, in the iPhone 5, rather than the Intel Relevant Products/Services processors used in previous versions.Apple usually releases new iPhones in early summer but reports said the company couldn't have the fifth-generation model ready in time.
