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China Mobile to develop own branded handsets, while it waits for the iPhone

China Mobile, which aims to offer the iPhone, hopes to iron out differences with Apple eventually

China Mobile, the country's largest mobile carrier, will develop its own company-branded handsets, while hoping to eventually strike a deal with Apple for the iPhone.

The operator's CEO Li Yue made the comments while speaking at the company's global developer conference in Guangzhou on Wednesday, according to a transcript.

China Mobile has 703 million customers, and its subscriber base towers over rivals China Unicom and China Telecom, which together have only 387 million mobile users. But unlike its rivals, the company has yet to secure a partnership with Apple to sell its iPhone, a weakness which analysts say has hindered its growth.

One obstacle seen preventing the partnership is China Mobile's 3G network, which uses a homegrown technology called TD-SCDMA. To operate on the network, the iPhone would have to be redesigned.

Since 2007, China Mobile has been holding talks with Apple on a partnership, said Yue during a question-and-answer session.

"The technology problem is one problem, but it's not all of it," he said. "The main problems are related to the business models, partnership conditions and profit sharing for both parties. There are also many other aspects we need to investigate, that need to be researched, that we need to reach a common ground."

But Yue said he believed the companies would work through their differences. "Our partnership will happen," he added.

China Mobile has previously said future versions of Apple's iPhone will support the carrier's fourth generation (4G) network, which is still undergoing trials in various cities across the country.

Teck Zhung Wong, an analyst with IDC, said although Chinese officials are trying to speed up deployment of the nation's 4G networks, China Mobile probably won't start offering the iPhone until 2014.

In Wednesday's question-and-answer session, China Mobile's CEO was also asked if the company would develop its own handsets, given that the country's "4G era" was close to arriving.

"My answer is that we will definitely do it," he said, but added that China Mobile doesn't intend to compete with handset vendors. "For example, when Wal-Mart sells other people's products, Wal-Mart's own products will account for about 25 percent of sales," he said.

China Mobile has previously tried to promote its own mobile operating system, called OPhone, which was based on Android. But the OPhone OS gradually fell to obscurity, after failing to attract enough backing from handset vendors.


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