Identifier
Created
Classification
Origin
09BEIJING1588
2009-06-12 09:18:00
UNCLASSIFIED
Embassy Beijing
Cable title:  

APPLE IPHONE FACING LICENSING ISSUES IN CHINA

Tags:  ECPS EIND ECON CH 
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R 120918Z JUN 09
FM AMEMBASSY BEIJING
TO SECSTATE WASHDC 4493
DEPT OF COMMERCE WASHDC
UNCLAS BEIJING 001588 


STATE PASS USTR FOR STRATFORD, WINELAND
COMMERCE FOR MO'NEILL, IKASOFF, NMELCHER, APING
STATE FOR EEB/CIP/BA SAEED

E.O. 12958 N/A
TAGS: ECPS EIND ECON CH
SUBJECT: APPLE IPHONE FACING LICENSING ISSUES IN CHINA

UNCLAS BEIJING 001588


STATE PASS USTR FOR STRATFORD, WINELAND
COMMERCE FOR MO'NEILL, IKASOFF, NMELCHER, APING
STATE FOR EEB/CIP/BA SAEED

E.O. 12958 N/A
TAGS: ECPS EIND ECON CH
SUBJECT: APPLE IPHONE FACING LICENSING ISSUES IN CHINA


1. (SBU) Summary. Apple Corporation representatives told Emboffs on
June 11 that the Ministry of Industry and Information Technology
(MIIT) has refused to accept the company's application for a license
critical to introducing the iPhone in China, effectively continuing
to shut the iPhone out of the Chinese market. Apple suspects
competitive issues between China's mobile service providers are at
the heart of the issue. End Summary.


2. (SBU) Apple Corporation Vice President and General Manager of
Asia Brian Lu told FCS and Econ officers June 11 that the Ministry
of Industry and Information Technology (MIIT),on June 10, had
refused to accept the company's application for a network
application license to sell its iconic iPhone in China. Apple was
told that, because the licensing of the iPhone is a "sensitive
issue," higher levels within MIIT would have to approve the
submission.


3. (SBU) As background, Lu explained Apple has been working for
nearly two years to develop an iPhone for the Chinese market. He
said the company had already received two of the four
licenses/certificates necessary to introduce the phone. The network
application license is the most critical of the four as it will
allow the iPhone to access China's mobile phone network.


4. (SBU) Lu said he suspects competitive issues between two of
China's mobile service providers, China Mobile and China Telecom,
may be the reason for the refusal. China Mobile, the country's
largest mobile service provider, uses China's homegrown third
generation (3G) technology standard, TD-SCDMA. China Telecom uses
the European standard, WCDMA. iPhone is only compatible with WCDMA.
If the iPhone is introduced in China, it has the potential to lure
large numbers of users away from China Mobile to China Telecom. Lu
believes China Mobile is therefore putting pressure on MIIT not to
issue Apple a network application license thereby blocking its entry
into the market.


5. (SBU) Apple requested USG assistance and advocacy on this
matter. Emboffs requested meetings with MIIT officials on Friday
June 12 to seek clarification of the issue, but MIIT officers have
thus far not responded to our requests for a meeting. At the same
time, Emboffs encouraged Apple to contact DOC's Advocacy Center to
formally request USG advocacy.