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News now coming in suggests that China Mobile (NYSE:CHL) and Apple (NASDAQ:AAPL) couldn't reach an agreement on revenue splits. No surprise there. The odorless-feces-factor in the negotiating venue must have been off the scale.

There are three ways of looking at this:

1. Apple has been offered another thick slice of Humble Pie, and it needs to wake up and realize that it is no longer the only guy on the block.

2. China Mobile will regret this. Deeply.

And my personal favorite:

3. The parties walked away from the table because they don't really need each other to succeed.

China Mobile will continue to be the largest (and possibly most profitable) mobile operator in China in the coming years, so they're not worried about kick-starting their business in a hyper-competitive environment.

What is more, the operator has a long line of people coming to their shiny new headquarters on the 2nd Ring Road, hat in hand, with ideas on how their devices and services can bring China Mobile even more revenue without lifting a finger. All of which makes Mr. Jobs' model of "you-sell-our-phones-we-take-your-cash" seem just a little unappealing.

(Apple will get a different reception in Japan, where DoCoMo, KDDI, and SoftBank - for their own, seemingly perverse reasons (that of course make complete sense in a Japanese cultural context) have managed to create three services with the minimum of compelling differentiation. Of course, the Japanese are no slouches at bargaining, and you can bet that if anything they will restrain the iPhone from it's maximum level of success in the market by either restraining availability or jacking up the price. But we digress.)

Apple has several options:

1. Cut a deal with Unicom (NYSE:CHU), who are increasingly desperate in their search for a decent partner (the problem with THAT, of course, is that as of this writing Apple is not offering a CDMA-based iPhone, much less a CDMA-based iPhone with a SIM-card slot, and CHU knoweth not GPRS.);

2. Wait until 3G rolls out in China and all (both) carriers are looking for ways to recoup their investments in network upgrades;

3. Go with one of the Hong Kong carriers, counting on growing China's already thriving gray market in unlocked/hacked iPhones.

4. Cave in and do it China Mobile's way.

My bet is on the waiting game, or a combination of #2 and #3). Apple has enough on its plate worldwide, ramping up production, working the bugs out of the iPhone, and bringing developers into the ecosystem.

In the meantime, Motorola (MOT), Nokia (NYSE:NOK), Samsung, dopod, and the local guys creating iPhone look-alikes will be doing all they can to eat into the iPhone's potential market.

Indeed, we may find that the iPhone will radically increase the number of people in China willing to upgrade to a new and cool smartphone without even being in the market, creating a "halo effect" for the entire industry.

Source: China Mobile, Apple Butt Heads Over iPhone