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Official word was released before the weekend that the Apple iPhone (as Steve Jobs had hinted at a while ago) is finally entering the massive Chinese market, with a deal with China Mobile.

Reuters is carrying the following quote:

But there is no timetable for when China Mobile would bring the iPhone to mainland China, a spokeswoman said. “Apple is no longer insisting on a revenue-sharing policy, so the biggest hurdle for China Mobile to bring in the iPhone has been cleared, but there are practical issues still to be resolved,” said China Mobile spokeswoman Rainie Lei.

Apple has decided to stop requiring that wireless network companies pay it part of the subscription fees they get from iPhone users. Instead, they will subsidize the devices up front to make them cheaper.

With no revenue sharing deal, it is quite likely that Apple will be just breaking even, if not losing money on this deal. However, I can easily see it as a prestige issue for Apple, as well as a move to try and block some surprisingly successful competitors, such as the Samsung Instinct or HTC Touch Pro, from stealing the largest phone market in the world. Certainly a good business move, no matter the short term cost.

What does this mean to iPhone buyers outside of China? Quite likely a shortage of iPhones due to the sudden inclusion of all those Chinese users. If the Russian market is also signed soon (as has been rumoured), supplies could get pretty thin on the ground. If there are any hiccups at all in Apple’s supply train on these devices, we could be seeing some interesting headlines by the end of the summer. Both in terms of resources and profit margin, Apple may be cutting this one very very close.

As for that groaning noise you hear in the background, that was the thousands of iPhone knockoff makers throwing themselves off the Great Wall.

Zealot (444 Posts) - Website | Twitter | Facebook

By day a department manager and writer for a major network device vendor...by night Zealot stalks the mean magnetic streets, striking fear into the hearts of bandwidth abusers and theme park mascots. Zealot has been involved with mobile devices for more than a decade now, starting off with dumb phones, moving to PDAs and then to smartphones, notebooks and netbooks with the odd PMP thrown in. Most of his mobile time currently is spent on a Treo Pro, Zune HD, Thinkpad T61, Gigabyte M912M or a Hackintoshed Compaq Mini 704. He proudly groks the Geek community and considers himself a Neo Maxi Zune Dweebie (thanks Will Wheaton!).