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 
 
¶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.