New report reiterates why Apple needs China Mobile deal

A new report is out this morning regarding the current state of the smartphone market in mainland China. With three providers on the world’s 20 largest carriers list, and more than a billion cell phone users, the country is quickly become a battleground for smartphone-makers.

The new data comes from Needham & Company‘s Charlie Wolf. The analyst issued his quarterly report on the smartphone industry today, and it contains both good news and bad news for Apple’s handset business…

First, the good news: according to the report, Apple now holds 17.3% of the smartphone market in China. That’s nearly double the amount it had last year, at 9.9%. Wolf attributes a majority of the growth to the recent launch of the iPhone on China Telecom, the country’s third largest carrier.

But the bad news is, Apple is still getting slaughtered by Android. With hundreds of different handsets, made by dozens of different manufacturers, Google’s mobile platform still maintains a staggering 70% of China’s smartphone market.

That’s a pretty steep deficit for Apple to climb. And if it has any hopes of doing so, it’s going to need to strike a deal with China Mobile. For those who aren’t familiar with it, China Mobile is the largest carrier in the world. It has more than 650 million subscribers, and operates the largest wireless network on the planet.

Rumors of an Apple-China Mobile partnership have been bouncing around for years. But, similar to the T-Mobile situation here in the U.S., the carrier’s network runs on technology that isn’t supported by current-model iPhones.

That could change this fall, however, as Apple’s upcoming handset is widely expected to support more networks thanks to a new Qualcomm chip. And if that’s case, you can bet that an Apple-China Mobile deal won’t be far behind.

Make no mistake, this year’s iPhone announcement could be just as much about Apple’s new carrier partners, as it will be about the hardware itself.