As Apple unveils its new iPhones and an overhauled mobile operating system this week, the question that may determine the products' success isn't "What can I do with them?" but "Whose technology will they work with?"
We already know most of what the new iOS 7 software will do and what it will look like since the preview Apple executives provided at the company's developer conference in June.
What we don't know yet is how much the new phones will cost, nor what kind of deal Apple CEO Tim Cook has struck with any large overseas wireless operators -- including China Mobile -- to carry a new, lower-cost iPhone that the company hopes to sell in developing markets.
We also don't yet know how inter-operable iOS 7 will be with non-Apple devices and software.
The full-featured smartphones Apple makes don't come cheap, which is why it relies on subsidies from mobile carriers to help keep the devices competitively priced.
U.S. wireless providers such as AT&T and Verizon have been happy to offer billions in subsidies to Apple because iPhone users tend to spend the most time on the Internet.
More Web surfing means more downloaded pictures, text and video, which require bigger data plans. Sales of those pricier service plans have helped wireless carriers here reap huge profits from iPhone users.
That has kept Apple on top of the U.S. handset market, with second-quarter figures from market researcher Nielsen showing the company with a 40% share, vs. Samsung's 24% and roughly 9% each for HTC and Motorola (now part of Google).
Apple has maintained its lead in hardware in the U.S. even as Samsung extends its global handset lead and Google's Android operating system, which works on devices made by many different phone makers, gains control of more than half of the U.S. market for smartphone software.
Apple's foray into China, meanwhile, has been more challenging, with its sales there in the latest quarter falling 14% year-over-year.
Market research puts Apple in either fifth or sixth place in the China smartphone market -- the world's largest -- well behind No. 1 Samsung.
While China's two smaller wireless carriers -- China Unicom and China Telecom -- have offered Apple devices for several years, the U.S. company has yet to reach a deal with China Mobile, whose 740 million subscribers make it the dominant wireless carrier in that country. (continued...)
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