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China Mobile chairman says still in talks with Apple on iPhone deal

A China Mobile office is seen in downtown Shanghai December 18, 2013. REUTERS/Aly Song
A China Mobile office is seen in downtown Shanghai December 18, 2013. REUTERS/Aly Song

TAIPEI (Reuters) - China Mobile Ltd said it's still in talks with Apple Inc to sell iPhones amid mounting industry speculation that the pair are about to announce a deal to net the technology giant hundreds of millions of potential new customers.

Xi Guohua, the chairman of the world's largest mobile phone carrier, said on Wednesday morning that his company had no announcement to make on any deal to carry Apple's smartphones. Xi was speaking to reporters on the sidelines of a conference in Guangzhou, a southern city of China.

A tie-up between the pair in the U.S. company's second-largest market after its home turf has been expected for some time and would boost Apple in its global rivalry with South Korea's Samsung Electronics Co Ltd.

The Wall Street Journal reported earlier this month that an announcement would be made "around December 18". Xi's comment on Wednesday that talks were continuing was first reported by local media and later confirmed by company spokesman Ge Qi.

A deal with China Mobile could potentially be worth billions of dollars in revenue for Apple. Up to 759 million potential new China Mobile customers could gain access to iPhones, generating up to $3 billion in extra 2014 revenue - nearly a quarter of Apple's projected revenue growth in its current fiscal year.

But after an expected initial surge, Apple is likely to find itself back in a battle with its main smartphone rival, South Korea's Samsung Electronics Co Ltd.

Xi also told the conference China Mobile aims to sell between 190 to 220 million handsets next year. He said the company plans to step up subsidies to cover the cost of handset sales after spending 27 billion yuan ($4.5 billion) in 2013, according to the company's official account on the Sina Weibo microblogging service.

($1 = 6.0710 Chinese yuan)

(Reporting by Clare Jim; Additional reporting by Shanghai newsroom; Editing by Kazunori Takada and Kenneth Maxwell)

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