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Apple's Cook talks 'cooperation' with iPhone-less China Mobile

No surprise there: With over 700 million subscribers, China Mobile is the jewel of the country's wireless industry. And it doesn't yet offer the iPhone.

Will China Mobile get the iPhone?
Will China Mobile get the iPhone?
CBS Interactive

Apple CEO Tim Cook is in China talking with the country's largest carrier.

A China Mobile spokesman told Reuters today that Cook visited the carrier's headquarters this morning to meet with Chairman Xi Guohua and discuss "matters of cooperation." The person would not divulge the nature of those discussions and what the companies might cooperate on.

Cook was discovered to be in China earlier this week when he met with Miao Wei, head of the country's Ministry of Industry and Information Technology. That discussion centered on mobile communications, Apple's operations, and the technology industry as a whole, according to the government body.

Cook's latest visit to China is his second in the last 10 months. The first time around, Cook toured a Foxconn iPhone factory, as well as a few of his company stores. He also met with government officials.

That he's now focusing his trip on China Mobile should come as no surprise. With over 700 million subscribers, China Mobile is the jewel of China's wireless industry. Apple currently does not offer its iPhone to China Mobile customers, but does sell it through China Unicom and China Telecom -- much smaller competitors to the wireless giant.

China Mobile's discussions with Apple have been under way since 2009, according to the carrier's president, Li Yue. According to Li, a snag in making the deal happen is that China Mobile uses a TD-SCDMA network that's incompatible with the iPhone 4S and iPhone 5. And although that issue can be overcome, Li said that "the business model and benefit sharing still need further discussion" before they can sign a deal.

Li didn't elaborate on what kind of "benefit sharing" his company is seeking, but it's been rumored that China Mobile wants a cut of the revenue Apple generates through its App Store on all China Mobile customers. Apple has never offered such a deal to other carriers.

It's believed that China Mobile has negotiated with Apple from a place of leverage, since it has so many subscribers. However, in a note to investors earlier this month, Evercore Partners analyst Rob Cihra said that he believes "China Mobile could be starting to need the iPhone more." He said that China Mobile's 3G market share was down 7 percent year over year to end 2012 at 37 percent. China Telecom and China Unicom, meanwhile, combined for a 7 percent gain to land at 63 percent.

CNET has contacted Apple for comment. We will update this story when we have more information.