Despite challenges, strong iPhone demand expected in China
China Mobile acknowledge to CNBC that the iPhone on its plans may bemore expensive than the phones offered by its competitors, and Apple CEO Tim Cook emphasized its focus on the quality of its devices as opposed to the number of customers it reaches, but demand for the Apple brand in China is clear, according to Arik Hesseldahl, senior editor at Re/code.
"For Apple, it's always been about making the best products and not making the most. And so we want people to have an incredible user experience with our products," Cook told CNBC in an interview. "This is what's important for us."
The companies may have to rely on discounts on phones to boost sales to Chinese consumers, however.
"I think this is where the subsidies will come into play much as they do here [in the United States]. Apple tends to want to build relationship with its end user and so will do its best to structure deals with China Mobile that lessen the initial price sensitivity. But it's clear there's demand for the Apple brand," said Hesseldahl. (NBC News group is a minority stakeholder in Re/code and has a content sharing partnership with it.)
Another point on Apple's side is that many consumers in China already use smartphones more than they use PCs, Hesseldahl noted.
"This is one of those markets where your phone may be your first computing device," he said.
"But Apple already has a toehold with about 5 percent of the market as it stands," Hesseldahl said. "The other players will respond, but competition has never once fazed Apple."
—By CNBC's Althea Chang.