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Will iPhone sales grow Apple's footprint in China?

If, as reports indicate, China Mobile is beginning to sell iPhones in China, it could signal expansion for Apple which has struggled to offset slowing growth in developed markets.

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REUTERS/Kim Kyung-Hoon/Files
A man talks on an iPhone in Beijing in this July file photo. Apple is expected to announce that for the first time more iPhones have been sold in China than in the US.

China Mobile Ltd, the world's largest mobile phone carrier, has quietly begun taking pre-orders for Apple Inc's iPhones, according to a report on Fortune.com.

Apple, which needs to expand its footprint in China, its biggest market after the United States, is trying to offset slowing revenue growth in developed markets that are increasingly saturated and hyper-competitive.

The Chinese carrier has struggled to sustain growth as rivals like China Unicom Hong Kong Ltd sign up new users at a faster pace.

Apple fell to No. 7 in the second quarter in China, the world's largest mobile market, with 5 percent market share, losing ground not just to Samsung Electronics Co Ltd but also to local rivals Lenovo Group Ltd and ZTE Corp .

Fortune's report, which could not be confirmed by Reuters, showed a screen grab from a reservation website that Fortune said was registered by a China Mobile subsidiary in southern China that began taking pre-orders for the iPhone 5S and the iPhone 5c late on Monday. 

At 6:30 a.m. EST on Tuesday (7:30 p.m. Beijing time), the page had been replaced with a notice saying it was being updated and pre-orders would resume later.

Representatives for China Mobile could not be reached for comment. Apple declined to comment.

In late October, China Mobile placed an advertisement for the faster 4G mobile network on its website, raising expectations that a long-awaited distribution deal with Apple would be announced soon.

Apple has spent years trying to reach a deal with China Mobile, with numerous visits to the state-owned carrier's Beijing headquarters. It has repeatedly insisted the Chinese market is crucial to the company.

The ongoing effort has fueled Wall Street hopes that a deal would come soon, offering the iPhone to more than 740 million potential buyers who are China Mobile subscribers. But negotiations have been tricky, in part because of disagreements over details like revenue-sharing, analysts have said.

China Mobile has struggled to attract users to its high-speed 3G standard, who accounted for just one-fifth of total subscribers. In August, 40 percent of China Unicom Hong Kong's subscribers were on 3G, versus 52 percent for China Telecom Corp Ltd.

A completed deal and the resulting jump in iPhone sales could boost Apple stock, which has been stuck below $600 for over a year.

The shares rose 1.7 percent to $560.73 on Tuesday.

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