Long Road To China For iPhone

Includes: AAPL, CHL
by: David Wolf

Longtime Hutong readers will remember that right after Steve Jobs announced the iPhone in January, a very noisy hedge fund guy emailed around an article saying that the iPhone was the "ultimate China-friendly gizmo."

Despite being an Apple (NASDAQ:AAPL) partisan for over two decades, I took detailed exception to his point. I thought the iPhone and China were a gross mismatch.

Negotiations between China Mobile (NYSE:CHL) and Apple hit a snag earlier this month over the business model, and there is a rumor in the Chinese press that the parties have walked away from the table.

Realistically, I think Apple and China Mobile will reach an agreement at some point, and I also think that eventually Apple will introduce an iPhone that can be successful in China.

The only question is: Will Nokia (NYSE:NOK), Motorola (MOT), Samsung, and LG have eaten into the iPhone's differentiation by the time they do?