With the iPhone 5C, the ‘C’ may stand for ‘China’

Typically when Apple announces a new iPhone, fans and investors are waiting to be dazzled by new features and designs.

But this time, the most significant development for the future of the iPhone may be the announcement of a new partner to sell the phones: China Mobile.

There are conflicting reports about whether Apple will announce on Tuesday that it has struck a deal with China Mobile, the nation’s largest carrier, to sell the iPhone.

It’s worth noting that Apple is planning a separate media event in Beijing nine hours after the one at Apple HQ in Cupertino.

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Still, there is a high degree of confidence that a deal is near thanks to Apple’s decision to build a lower-cost iPhone 5C.

“I think the ‘C’ stands for ‘China,’� said Carl Howe, a Yankee Group analyst. “I think in many ways, it’s not as much a technology announcement this week. It’s much more material if they say they’re going to get China Mobile to sell the iPhone.�

It’s impossible to underestimate how important China is to Apple, which has seen its overall growth slow this year and continues to lose market share outside the U.S. to rivals such as Samsung and its Android-based phones.

Despite the challenges Apple faces in China, the country is the company’s third-largest market. But after getting a foothold and seeing some encouraging signs there, Apple seems to have hit a wall.

In the most recent quarter, for instance, Apple reported that its “Greater China� revenue (which includes Hong Kong and Taiwan) fell 14% from the same period a year ago. It was down a whopping 43% from the previous quarter.

Apple has reportedly been in talks with China Mobile for years. China Mobile is massive. It has 700 million subscribers which makes it seven times as big as Verizon Wireless, the largest carrier in the U.S. Getting an iPhone onto China Mobile’s network would be seismic, analysts said, potentially supercharging Apple’s growth over the next few quarters.

And that has analysts anticipating news of a distribution deal more than the specs of any new phones, especially the high-end iPhone 5S, which is rumored to not sport much in the way of exciting new features.

“The thing I’m going to watch the most is their ability to penetrate new markets like China,� said Tim Bajarin, an independent analyst and president of Creative Strategies. “If Apple should announce they have a deal with China Mobile, their fortunes in China go up exponentially.�

Of course, this kind of focus by analysts on business deals and strategy is emblematic of how the smartphone market is changing.

The high-end market, which Apple dominates, is seen as becoming saturated. And with each new version of smartphones, the differences in technology and features among rivals seem to be growing fewer and fewer.

As the real battle turns to things like distribution deals and other MBA-speak type issues, it will be interesting to see how Apple fans react. Such deals are critical to the company, but they’re not the kind of developments that seem likely to inspire the fanatics to camp out at the Apple store in anticipation of a new gadget.

On the other hand, a lower-cost iPhone and a deal with China Mobile will make Apple products available to a whole new set of customers.

For now, Apple might need the love of the newbies more than the die-hard fans.

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