In iPhone deal, Baidu to share search revenue with Apple

In what could only be called a major agreement, the dominant Chinese search engine Baidu will share its search revenue with Apple for making it the default choice for Chinese iPhone users, it’s been confirmed.

Though Baidu also shares revenue with Google on Android handsets that use its search engine, strong sales of Apple’s devices in the 1.33 billion people market are bound to maximize opportunities for both companies…

Bloomberg has the story:

Apple said this week it will offer Baidu’s search-engine as an option for iPhone and iPad customers, and add Chinese- language support for its Siri voice technology, as the world’s most valuable company tailors its products for Chinese consumers.

Baidu, which not long ago only partnered with popular websites on search traffic, files as the most popular search engine in China and it’s made some pretty important moves in mobile recently.

Baidu, which fields about 80 percent of China’s Web searches, is prepared to incur costs to add smartphone users by offering services such as music streaming for free, Wang said.

China has become a major revenue growth for California-based Apple, which saw an astounding $7.9 billion in China sales in the first quarter of this year, a threefold year-over-year increase.

China has recently passed the United States to become the world’s largest smartphone market. Apple sells its smartphone through China Unicom and China Telecom and is expected to cut a major deal with China Mobile, the world’s biggest carrier.

Apple’s iOS boss Scott Forstall and OS X head Craig Federigi both acknowledged during the WWDC keynote the importance of China and its customers to Apple’s business by highlighting a bunch of new features in OS X and iOS 6 specifically tailored for the local market.

For example, iOS 6 sports a new Chinese dictionary, improved text input, twice the number of Chinese characters in handwriting recognition, support for popular Chinese Internet services like Sina and Youku and more.

Plus, come this fall when iOS 6 is scheduled to land on iOS devices, Siri will speak Chinese, Korean, Italian and several other languages.

Cupertino will also open two new flagship retail stores in Chengdu and Shenzhen, where iPads are made, and is targeting to have about 25 stores open in China by the end of calendar 2011.

Looks like Apple is finally beginning to take China seriously, no?