By Steve Lo, posted Mar 3, 2012 at 5:40 PM, 2,050 views,

Apple May Face Difficulties On Making A 4G LTE iPhone For China’s 4G Network

Our sources within Apple’s main supplier in Shenzhen have just filled us in on some very interesting news. It seems Apple has quite the plan for this year, when it comes to ensuring its domination of the mobile market. The iPhone 5 was a disappointment as we all remember. But we have exact details from our sources how Apple plans to recover and maintain it’s lead. Want to know? Read On!

Apple has faltered with the iPhone 4S in our opinion. Not in terms of how well it has sold, or the revolutionary Siri, but the fact it does not incorporate some new technologies that other companies have integrated into their devices already.

Take for example, the iPhone 4S has sold very poorly in Korea in comparison to the rest of the world. This is because most Korean phones in the iPhone 4S price range has LTE (4G) technology inside it. Korea has among the best network in the world in both internet speed and connectivity, both wireless and wired, so it is a pity Apple did not consider this.

Take also into consideration, that the iPhone 4S as it is in its current iteration, is not a “world phone” whereas almost every other phone in it’s price range is. If for example, you are from the US and on the AT&T network, you can only go on expensive overseas “partner” networks. That doesn’t sound too good to us.

The China Dilemma

Also take note in China, where the iPhone 4S was just released, numerous people running on the TD-SCDMA network of China Mobile are having issues as well.

Apple has confirmed that some people are experiencing compatibility issues when marrying a China Mobile SIM card and the new iPhone 4S. Apple’s customer service staff are up to speed with the situation, and claim that Cupertino is already hard at work to fix this issue with a software update. What is surprising about this is that despite all the talks about the iPhone with China Mobile that happened last year, and the rumored testing of the iPhone on the China Mobile 3G network, there is still major issues to be worked out. In fact, we feel that Apple is missing out on a golden opportunity. Why? By playing hardball, they are missing out on the 10 million+ iPhone users stuck on China Mobile’s 2G network.

We have heard that until the 4G network, the LTE network gets up and running, talks are dead between Apple and China Mobile. As it does get built and tested, which is coming along well, we understand it wont be ready until 2014. Even then, there may be no way for them to cooperate as China Mobile demands a large portion of Apple’s app sale revenue. Although Apple and China Mobile did agree on the network configuration and type of chips to be used, but they still will not cooperate for a variety of reasons.

Apple And China Mobile Can’t Agree On Anything

China Mobile is by far the largest network in China. Millions of users have been using the iPhone on its 2G bands for many years now, for unlocked devices only. Apple’s inability to be flexible is costing it, in our opinion a significant opportunity. We contacted some of our sources, and it boils down to what we previously mentioned, the network and the App sales revenue.

In order to get the iPhone on China Mobile, Apple would need to add a different Qualcomm chip for the China Mobile Network, meaning that it would raise the cost of the iPhone. Also it raises the question, would Apple delegate a whole production line to just China Mobile phones as they did for Verizon? Or would they make a newer more complicated chip? Either way that isn’t easy. This is perhaps why, according to what we are told, it’s a no go until the 4G network is rolled out. More importantly, if Apple capitulates and does share its App sales revenue with China Mobile, then every other carrier in the world would expect the same. Even with access to millions more customers, taking that into consideration Apple might lose money in the long run.

One thing of note also is that since the Apple stores are not selling the phones in-house, only online because of the Sanlitun fiasco. In fact, Apple is helping the two major telecommunications companies in China (China Unicom and China Telecom) which have deals to sell iPhones get their product. It is selling well, but keep in mind, these are primarily contract based and not unlocked.

Chinese Competitors?

Since the rise of cheap Android smartphones in China, the sales of the iPhone have dropped considerably. We are especially fond of Chinese company Xiaomi, especially when the company sold out all of its inventory of 100,000 Xiaomi phones in three hours. Another Chinese-branded smartphone, Meizu MX, has also made Chinese Android fans’ mouths water. So, both phones are Chinese made, and are top performers at a quality price. Both represent a very real threat to Apple and the iPhone, as it costs almost double and it lacks several features both phones have.

An LTE Future?

Apple, based on what our sources have told us, is planning to correct this for the next generation of iPhone.

The first device that has been successfully tested, is the next generation iPad coming out relatively soon. Our sources have confirmed that certain models have been tested with LTE capabilities. We also hear that will most likely have a premium price attached to it, as it does drive the cost of the device up.

In many countries, there are LTE networks now, but China is lacking in that respect. Will Apple wait until the next generation? Or make a “China only” version as before missing some features? It will be interesting to see. If the iPad is successful, it will mean that the smaller version of the LTE circuitry if Apple does indeed release it, would be primed for the iPhone and may be ready for testing sooner rather than later. The key strategy that Apple is following, is to make sure they appeal to the broadest audience possible. They do that successfully now, and they will soon have the hardware to support that marketing strategy.