iLounge

The latest round of negotiations between Apple and China Mobile have broken down due to a disagreement over control of the App Store, a new report indicates. Interfax TMT China, citing a source at the China Mobile Research Institute, states that China Mobile president Wang Jianzhou outlined the turbulent negotiations on a recent visit to the Institute. The negotiations are said to have gone through three distinct rounds, spanning 18 months and involving both Apple CEO Steve Jobs and COO Tim Cook. Jianzhou reportedly claimed that initial negotiations broke down due to Apple’s insistence on revenue sharing, while the second round of talks failed after Apple offered to sell iPhones to the carrier for $600 and required that China Mobile subsidize iPhone service bundles.

The third, and reportedly final, round of negotiations is said to ended over Apple’s insistence that it, rather than China Mobile, sell applications for the device directly to customers via the App Store. Jianzhou saw the offer as possibly detrimental to China Mobile’s dominance of the country’s mobile Internet industry. “Wang said China Mobile should operate the application store itself in order to maintain its advantage,” the Institute source said, noting that Chinese customers have preferred to make purchases through deposits in their mobile phone accounts rather than through the credit cards required by the App Store. Apple currently sells an unlocked model of the iPhone 3G in Hong Kong, directly from its own website.