Is China Mobile Good For Apple?

The tame Apple Press has enthusiastically been running storied about how well Apple is doing in China. Reuters for example has been saying that the one million pre-orders that Jobs’ Mob has just collected is a triumph for Tim Cook’s negotiating ability. Getting a deal out of China Mobile was something the sainted Steve Jobs could not manage.

However saner heads are urging caution, While it is true that launching its iPhone on China Mobile vast network on Friday, opening the door to the world’s largest carrier’s 763 million subscribers and giving its China sales a short-term jolt, it is not likely to last. For a start the deal could start a war which China Mobile would not want. Some analysts predicting a costly subsidy war as rival carriers compete to lure customers. If China Mobile does not make its targets on sales for these phones, they are going to increase the subsidies.

China Mobile’s iPhone sales are expected to reach 12 million in its 2014 fiscal year, but its subsidies will leap 57 percent to $7 billion. In addition, the prices are still really high for the Chinese market. For the basic 16GB iPhone 5S, with no subscriber contract, China Mobile is charging $870.

China Unicom and China Telecom slashed their iPhone prices by as much as $210 following the announcement that a deal had been struck between Apple and China Mobile. The pair have also offered a range of cut-price deals on contracts. But there are also some problems with the pre-orders. Reuters checks showed that there were multiple registrations using fake ID numbers which means that people are buying up hoping to make a swift buck on resales.

All this is the least of Apple’s Chinese worries. The outfit has fallen out of favour with consumers who are increasingly opting for domestic products. Those who want an iPhone do not need to pay excessively to get one through China mobile either. In China, you can buy handsets typically smuggled from Hong Kong and then sign up for a China Mobile contract. This is a swings and roundabouts for Apple. If people buy from China Mobile, they will not buy from Hong Kong so it will lose sales there. If they don’t then the China Mobile contract is rubbish.

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Apple To Acquire Embark

Apple is reportedly purchasing mapping app developer Embark, in a move that could lend more real-time navigation features for public transit to Apple’s own Maps app.

The acquisition, which was first reported by tech journalist Jessica Lessin, follows other recent mapping purchases for Apple: HopStop, another maker of apps for public transit directions; and Locationary, which provides data about local businesses; and WifiSLAM, an indoor location and mapping company.

Apple did not directly confirm its acquisition of Embark, but in an emailed statement said, “Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans.”

Apple declined to comment further on the deal.

Apple has faced some serious challenges over the past year in providing a consistently solid mapping product with its Maps app. Last September Apple CEO Tim Cook was forced to publicly apologize for a series of issues plaguing the company’s Maps app in Apple’s iOS 6 operating system.

Embark is a company based in the San Francisco Bay Area that makes a mobile mapping app designed to help people navigate mass transit systems. The company’s app provides “tailored trips” specific to the user’s region, along with notifications for late-running trains and other advisories and closures.

Embark’s technology, if it does find its way into a future Apple product, could enhance Apple’s mapping products and make the company a stronger competitor to rivals like Google. Google’s Maps app already offers real-time public transit navigation features, as do some smaller players like iTransitBuddy.

Embark’s app is available for free on the iPhone for 10 transit systems including Boston’s MBTA, Chicago’s L, the New York City Subway and San Francisco’s Bart and Caltrain systems, with more on the way, according to Embark’s website.

It is not clear whether Embark’s app will be shut down as part of the acquisition. The app was still available in Apple’s App Store at the time of this article’s posting.

Embark’s team could not be immediately reached to comment on the deal.

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