China Mobile Pushing For Custom iPhone

China Mobile, the country's largest telecom operator, is still holding out hope that it can woo Apple into making a customized version of the iPhone that would work on a network based on homegrown TD-SCDMA technology.

However, most observers aren't holding their breath. Apple hasn't even released a CDMA version of the iPhone, though it is likely this will happen.

Still, speculation about an Apple iPhone on China Mobile has been ongoing since the first model was released in June 2007. With the release of the 4th generation model in North America and Europe last week, China Mobile chairman Wang Jianzhou confirmed this week that negotiations are still underway.

China Mobile has more than 500 million subscribers to its network, and the company is aggressively promoting its 3G service, which first rolled out in 2008. Yet the company has no truly recognizable flagship 3G phone because there are fewer handsets available for its TD-SCDMA technology than for the more mature WCDMA and CDMA2000 1X networks.

China Mobile was the first carrier in China on Apple's list more than two years ago. The first iPhone was GSM only and used GPRS/EDGE for its data connection, which would have been perfect for China Mobile. But negotiations were inconclusive and Apple started to turn its attention to China Unicom.

It didn't help China Mobile's case that it had been forced into adopting the homegrown, and less mature, TD-SCMDA standard for its 3G network, while the 3G iPhone supported the international WCDMA technology awarded to China Unicom by the Chinese government.

Since China Unicom became its partner in China, Apple has given up on exclusivity arrangements in most parts of the world (with the exception of the United States, where AT&T is still the only iPhone carrier). This is giving China Mobile hope that it can secure the iPhone without a battle with China Unicom.

Apple has given no confirmation has as to whether it wants to make a separate version of the phone for the operator. Were this to happen, it wouldn't be the first time Apple had made a bespoke model for China. Because Apple couldn't include the Chinese Wi-Fi standard (called WAPI) in earlier versions of the iPhone, the iPhone 3G and 3GS that came out in China were manufactured exclusively for China Unicom without Wi-Fi, using only a cellular connection for data. This is one of the contributing factors to poorer than expected sales figures.

China Unicom is currently in negotiations with Apple for the new iPhone 4, but it is not clear whether this model will support Wi-Fi or WAPI. The assumption is that it will have the same hardware as the international version, because insiders at China Unicom claim it will be on sale before the end of August, although VP Li Gang has not confirmed a release date. The government also recently relaxed its rules on Wi-Fi devices, making it likely China will have the same iPhone 4 as the rest of the world.