TMTPost -- Apple Inc. is ramping up expansion for its services in China while launching rare promotions of key product line iPhone.
Credit：Apple
Apple held talks with China Mobile, the world’s largest wireless telephone company, last year to roll out Apple TV+ in China, The Information reported, citing people familiar with the matter. If the deal were struck, Apple TV+ would be the first U.S. streaming service to be available in China, one of the biggest markets across the globe.
The report suggested Apple would license its content to China Mobile under the proposed deal since Chinese law doesn’t allow foreign companies to operate their streaming services in China. According to the reported deal, China Mobile would offer Apple TV + for a monthly fee and feature Apple’s content on Mobile HD, a set-top box that is included with China Mobile’s broadband service.
Apple and China Mobile are said to split revenue from Apple TV+ subscriptions and Apple is likely charge less for streaming service in China than costs of the service in U.S. given the weaker purchasing power of Chinese consumers. Apple’s talks with China Mobile started in 2022 and had wanted to announce the partnership by the end of last year, though something fell through, according to the report. It’s hard for Apple to operate Apple TV app in China even with a local partner under Chinese law, so China Mobie could offer Apple TV+ content through its own streaming service--Migu on mobiles. However, Apple executives are wary of licensing the content to Migu for it would be difficult to measure and share revenue once subscriber numbers rise, per the report.
Apple has several reasons to choose China Mobile instead of other partners, for one of them is that China Mobile is a government-backed company, which is an advantage when deal with regulators, the report cited sources. To work with China Mobile, the largest mobile phone carriers with nearly 1 billion customers, could lead to synergies considering a deal with the company to sell iPhones in 2013 that helped Apple grow its sales in China.
Apple didn’t comment on the report, neither did China Mobile. The report is the latest sign that Apple is looking for increase its presence in China as sales in the market play a key role in reversing decline in revenue.
One of surprising highlights of Apple’s financial results for the fiscal second quarter ended March 30 came from China, which has been a source of concern for investors wary of slowdown. Greater China, which includes mainland China, Taiwan, Hong Kong and Singapore, brought $16.37 billion in the March quarter, representing an 8% year-over-year (YoY) fall. That, however, still topped estimates of $15.87 billion with a YoY decrease of 11%. As Apple’s third largest market next to North America and Europe, Great China contributed 18% of total revenue that quarter. Apple didn’t provide detailed financial or sales figures in China, but Apple CFO Maestri said in an interview with Yahoo Finance that the company saw growth in mainland China during the quarter.
iPhone shipments surged 52% YoY and grew much stronger than a bounceback of 12% YoY increase in March after a 37% plunge in the first two months of the year, according to data from China Academy of Information and Communications Technology last month. The data added signs that iPhone sales in China has been recovering these months as Apple took rare promotions in the world’s largest smartphone market. Apple’s website lowered prices of iPhone 15 series in January in China ahead of the Chinese New Year holiday in February. The adjustment of RMB500 pushed the starting price of iPhone 15 below RMB5,000. Resellers of Apple at Tmall and JD.com was reported late February to cut the price of iPhone 15 by as much as RMB1,300 (US$180).
Apple last month unveiled much more substantial promotion. Its official store at Alibaba Group’s Tmall platform launched a limited-time discounting campaign from May 20 to 28. Any iPhone 15 shopper who placed their orders from May 20 to 28 can enjoy discounts up to RMB2,050 (US$318). Specifically, iPhone 15 Pro Max starts RMB7,949, representing a reduction of RMB2,050, or 20.5% from the previous price. The starting price of iPhone 15 Pro is cut to RMB4,500 after the discount of RMB1,900, and those prices of iPhone 15, iPhone 15 Plus respectively down to RMB5,599 and RMB6,099, each down by RMB1,400.
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