What happens when you offer what may be the world's most sought-after tech toy to the world's most populous nation?
Everyone is asking that question, now that wireless-service provider China Mobile (NYSE: CHL ) is in discussions with Apple (Nasdaq: AAPL ) to sell the iPhone in China. China Mobile CEO Wang Jianzhou confirmed that his company is talking with Steve Jobs and friends about offering the much-loved device to China Mobile's 350 million subscribers.
The deal is not done, however, because one major sticking point remains -- how much revenue China Mobile will kick back to Apple's Cupertino, Calif., headquarters. While AT&T (NYSE: T ) apparently has agreed to generous revenue-sharing on the iPhone in the U.S., European giant Vodafone (NYSE: VOD ) wasn't happy with such terms, letting operators Deutsche Telekom, Telefonica, and France Telecom (NYSE: FTE ) have the deal for Germany, the U.K., and France, respectively.
I'm sure the same baggage will follow the iPhone into Asia as it did in the U.S. and Europe, though -- many will criticize the high price, slow Web access, and locked features. Unless Apple hustles a next-generation iPhone to market in China next year, the device will probably carry the same limitations.
While the iPhone is reportedly selling briskly in its initial debut in the U.K. and Germany, investors should keep their euphoria in check. More and more of China Mobile's subscribers are prepaid users from rural areas -- not exactly the kind of users with high levels of disposable income. While anxious early adopters in the U.S. and Europe will sacrifice a few fancy dinners each month for the iPhone, many in China still struggle to afford even the ultra-low-cost phones from Nokia (NYSE: NOK ) and Motorola (NYSE: MOT ) .
Still, I'm sure the Asian elite will camp out for the iPhone. And just as hot tea becomes more palatable as it cools, I expect millions of Asians to warm up to Apple as the iPhone's price drops and new generations roll out in the coming years.
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