China Mobile and Apple 'tie the knot'

James Yan, a senior analyst with IDC China, said Apple faces an increasingly saturated market in big Chinese cities such as Beijing and Shanghai, where Apple enthusiasts and many high-end users have already purchased iPhone devices.

"That people in smaller cities demonstrate a purchasing capability sometimes astonishes vendors. Because Apple enjoys fame nationwide, the company will benefit from expanding its channels," Yan added.

Apple sold about 23 million iPhone devices in 2013, according to IDC.

Cook revealed that the company sold a record high number of iPhone handsets in China (including Hong Kong, Macao and Taiwan) in the first fiscal quarter of 2014 ending in December.

Analysts expect Apple's alliance with China Mobile to increase iPhone shipments by 12 million to 17 million this year.

However, Apple still has several challenges.

"Price is unfortunately still a major barrier, which will exclude the majority of China Mobile's subscribers," said Wang Jingwen, a telecom analyst with research firm Canalys.

According to Apple's China website, the unsubsidized retail price of a 16-gigabyte iPhone 5S is 5,288 yuan, while an iPhone 5C with the same storage capacity costs 4,488 yuan.

Despite being assembled in China, those prices are some of the highest around the world and exceed the average monthly salary in China.

Cook defended Apple's pricing strategy by saying that the company wants to provide customers with ‘the best products and best user experiences.

"Apple will not sell the most, but will create the best products," he said.

Since China Mobile's 4G network offers superb speed, iPhone devices running on this network will definitely create an exceptional user experience, he added.

Contact the writer at shenjingting@chinadaily.com.cn

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