Apple has reportedly cancelled its plans to launch its iPhone in China. It had been in talks to launch the phone with China Mobile, the world's largest mobile provider. But these talks have now fallen through, with revenue-sharing likely to be the factor in dispute.
China has a population of over one billion people, and has more than 350 million mobile subscribers. It's an enormous customer base that Apple has undoubtedly been keen to tap into. Even a 1 per cent share of the handset market there would see it flog millions of iPhones.
"It's not a surprise. China Mobile doesn't want to share its non-voice revenue," Duncan Clark, telecoms research consultant, told Reuters. "The two have very strong egos and, as in any relationship, that often doesn't work."
Apple has been criticised in the past because it takes a large percentage of contract revenue from mobile operators, as well as the money from actual iPhone sales. However, strong sales in the US have meant AT&T has done well out of the deal anyway, which is why Apple insisted on similar deals in Europe (with O2) and Australia.
Apple's UK deal with operator O2 has not gone quite so well. Lack of 3G and soaring prices have allegedly led to weak iPhone sales.