Chicano rock pioneers Los Lobos marking 40 years






LOS ANGELES (AP) — They are seen as the progenitors of Chicano rock ‘n’ roll, the first band that had the boldness, and some might even say the naiveté, to fuse punk rock with Mexican folk tunes.


It was a group called Los Lobos that had the unusual idea of putting an accordion, a saxophone and something called a bajo sexto alongside drums and Fender Stratocaster guitars and then blasting a ranchera-flavored folk tune or a Conjunto inspired melody through double reverb amps at about twice the volume you’d normally expect to hear.






“They were Latinos who weren’t afraid to break the mold of what’s expected and what’s traditionally played. That made them legendary, even to people who at first weren’t that familiar with their catalog,” said Greg Gonzalez of the young, Grammy-winning Latino-funk fusion band Grupo Fantasma.


To the guys in Los Lobos, however, the band that began to take shape some 40-odd years ago in the hallways of a barrio high school is still “just another band from East LA,” the words the group has used in the title of not one but two of its more than two dozen albums.


As a yearlong celebration of Los Lobos‘ 40th anniversary gets under way, having officially begun on Thanksgiving, much is likely to be made of how the band began as a humble mariachi group, toiling anonymously for nearly a decade at East LA weddings and backyard parties before the unlikely arrival of rock stardom.


That’s, well, sort of true.


For long before there was mariachi in Los Lobos‘ life, there was power-chord rock ‘n’ roll. Before the Latin trio Las Panchos had an impact, there was Jimi Hendrix.


“I actually went to go see him when I was 14 or 15,” says drummer-guitarist and principal lyricist Louie Perez, recalling how he had badgered his widowed mother to spend some of the hard-earned money she made sewing clothes in a sweatshop on a ticket to a Hendrix show.


“I sat right down front,” he recalls, his voice rising in excitement. “That experience just sort of rearranged my brain cells.”


About the same time, he had met a guitarist named David Hidalgo in an art class at James A. Garfield High, the school made famous in the 1988 film “Stand and Deliver” that profiled Jaime Escalante’s success in teaching college-level calculus to poor barrio kids. Soon the two had recruited fellow students Conrad Lozano and Cesar Rosas, both experienced musicians.


“Cesar had played in a power trio,” Perez recalls, while Lozano had been playing electric bass guitar for years.


It was sometime in November 1973 (no one remembers the exact day so they picked Thanksgiving) when the band is believed to have been born.


And the group might have stayed just another garage band from East LA, had it not been for a Mexican tradition called Las Mananitas.


“It’s a serenade to someone on their birthday,” Perez explains, and the group members’ mothers had birthdays coming up.


“So we learned about four or five Mexican songs and we went to our parents’ homes and did a little serenade,” Hidalgo recalled separately.


They were such a hit that they began scouring pawn shops for genuine Mexican instruments and really learning to play them.


Because they were at heart a rock ‘n’ roll band, however, they always played the music a little too loud and a little too fast. That was acceptable at the Mexican restaurants that employed them, until they decided to break out the Stratocaster guitars they had so coveted as kids.


“They said, ‘Well, that’s not what we hired you for,’” Perez says, chuckling.


So they headed west down the freeway to Hollywood, where initially the reaction wasn’t much better.


Saxophonist Steve Berlin recalls seeing the hybrid group showered with garbage one night when they opened for Public Image Ltd. Two years later, however, when they opened for Berlin’s group the Blasters, the reaction was different.


“It was quite literally an overnight success kind of thing,” the saxophonist recalls. “By the next morning, everybody I knew in Hollywood, all they were talking about was this band Los Lobos.”


A few nights later, they asked Berlin if he might jam with them. They were working up some tunes melding punk rock with Norteno, a Latin music genre that uses an accordion and a saxophone, and they needed a sax player.


For his part, Berlin says, he had never heard of Norteno music.


Something clicked, however, and soon he was producing the group’s first true rock album, 1984′s “How Will the Wolf Survive?” At the end of the sessions he was in the band.


The next 28 years would be pretty much the same kind of up-and-down ride as the first 12 were.


The group became international rock stars in 1987 with their version of the Mexican folk tune “La Bamba” for the soundtrack of the film of the same name. They melded 1950s teen idol Ritchie Valens’ rock interpretation with the original Son Jarocho style and sent the song to No. 1.


A two-year tour and a couple albums that nobody bought followed, leaving the group broke and disillusioned.


So they poured their anger and disillusionment into the lyrics and power chords of “Kiko,” the 1992 album now hailed as their masterpiece. A new version, recorded live, was released earlier this year.


The influence of Los Lobos‘ cross-cultural work can be heard to this day in the music of such varied young Latino groups as the hip-hop rockers Ozomatli, the Son Jarocho-influenced alt-music band Las Cafeteras and the Latino pop-rock group La Santa Cecilia, says Josh Kun, an expert on cross-border music.


“All of these bands inherited, wittingly or not, the experimental and style crossing instincts that Los Lobos proved were possible while hanging onto and developing your roots as a Mexican-American group,” said Kun, who curated the Grammy Museum’s recent “Trouble in Paradise” exhibition that chronicled the modern history of LA music.


For Los Lobos, winner of three Grammys, that was just the natural way of doing things for guys, Perez says, who learned early on that they didn’t fit in completely on either side of the U.S.-Mexico border.


“As Mexican-Americans in the U.S. we’re not completely accepted on this side of the border. And then on the other side of the border it’s like, ‘Well, what are you?’” he mused.


“So if that’s the case,” he added brightly, “then, hey, we belong everywhere.”


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California home for developmentally disabled faces abuse inquiry






SAN FRANCISCO (Reuters) – California health officials have threatened to shut down part of the state’s oldest home for developmentally disabled adults due to evidence of physical abuse and neglect, in a move that could displace nearly 300 of its residents.


The state-run Sonoma Developmental Center could lose its license to run one unit if it does not fix the problems, according to a letter the state health department sent this week to the director of the sprawling facility in Eldridge.






Monitors this month and last “documented incidents of abuse constituting immediate jeopardy, as well as actual serious threats to the physical safety of female clients in certain units,” the California Department of Public Health letter said.


Among the incidents were physical abuse, a staff member exposing himself to a female client and inadequate monitoring of a patient who had propensity to swallow inedible items, leading to surgery, said Pam Dickfoss, assistant deputy director of the California Center for Health Care Quality.


The threat of sanctions against the board-and-care center in the heart of wine country represents a significant blow to a historic facility that opened at its current site in 1891 next to the bucolic town of Sonoma.


The center is northern California‘s only state-run residential facility for developmentally disabled adults and sits on 1,000 acres of land, including a petting zoo and sports fields.


Closure of the unit under scrutiny, the Intermediate Care Facility, could require moving 290 of the center’s more than 500 residents, officials said. It is unclear where they would be sent and officials say they hope that will not be necessary.


Administrators have vowed to correct deficiencies and said they plan to appeal the move to potentially strip them of federal funding and a state license for the unit under scrutiny.


“We are moving quickly to fix this center and protect our residents,” said Terri Delgadillo, director of the state Department of Developmental Services, which oversees the center.


She said the problems forced the removal of the center’s executive and clinical directors as well as other staff changes.


State monitors identified 57 deficiencies during a July visit, including four that posed an immediate danger to residents, and dozens of other threats to residents in more recent visits, the letter said.


The facility gets $ 117,000 a day in federal funding, said Nancy Lungren, a spokeswoman for the California Department of Developmental Services.


Most of the center’s residents suffer from cerebral palsy, epilepsy, autism, or a combination of those conditions. Many have lived their entire adult lives at the center.


Leslie Morrison, director of the investigations unit of Disability Rights California, a watchdog group, said she was troubled by reports from the facility over the past year.


“This has been developing for a long period,” Morrison said. “They have been trying to correct things, but it’s going to take a long time.”


(Editing by Alex Dobuzinskis and Eric Walsh)


Health News Headlines – Yahoo! News


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Man City losses halve in 2011-12







Manchester City has revealed that its financial losses for 2011-12 have halved from a year earlier.






The Premier League champions announced a pre-tax loss of £93.4m, down from £189.6m in 2010-11.


Revenues increased 51% to £231.1m, with the club’s first appearance in the Uefa Champions League contributing more than £22m in new revenue.


The club’s sponsorship deal with Etihad Airways helped commercial partnership revenue double from £48.5m to £97m.


City’s operating loss also improved from a record £194.9m to £104.1m.


Uefa’s Financial Fair Play rules, which say clubs must break even over three years, come into full effect in 2013-14.


Investment impact


City was acquired by Sheikh Mansour of Abu Dhabi in 2008. In its annual report, the club said it had undergone a “significant period of investment” since then. Over that time, it has spent about half a billion pounds on new players.


“The club’s performance in the 2011-12 reporting period demonstrates the tangible and positive impacts of that investment across many areas of our operations,” it said.


It added that its player recruitment strategy had transitioned from one of rebuilding to one of refinement.


“With a relatively young squad that has won an FA Cup and a Barclays Premier League in consecutive seasons, our recruitment needs have been reduced.


“As a result, the amortisation of player contracts and the net impact of player trading on the club’s bottom line has decreased by 27% (£30.3m) over the previous year, consistent with our belief that the peak of the club’s investment in its playing squad has passed.”


The club’s wage bill increased to £178.2m from £153.7m the previous year.


That covered 237 football players and staff and 239 commercial and administration staff.


BBC News – Business


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NKorea rocket launch shows young leader as gambler






PYONGYANG, North Korea (AP) — A triumphant North Korea staged a mass rally of soldiers and civilians Friday to glorify the country’s young ruler, who took a big gamble this week in sending a satellite into orbit in defiance of international warnings.


Wednesday’s rocket launch came just eight months after a similar attempt ended in an embarrassing public failure, and just under a year after Kim Jong Un inherited power following his father’s death.






The surprising success of the launch may have earned Kim global condemnation, but at home the gamble paid off, at least in the short term. To his people, it made the 20-something Kim appear powerful, capable and determined in the face of foreign adversaries.


Tens of thousands of North Koreans, packed into snowy Kim Il Sung Square, clenched their fists in a unified show of resolve as a military band tooted horns and pounded on drums.


Huge red banners positioned in the square called on North Koreans to defend Kim Jong Un with their lives. They also paid homage to Kim Jong Un’s father, Kim Jong Il, and his grandfather, North Korean founder Kim Il Sung.


Pyongyang says the rocket put a crop and weather monitoring satellite into orbit. Much of the rest of the world sees it as a thinly disguised test of banned long-range missile technology. It could bring a fresh round of U.N. sanctions that would increase his country’s international isolation. At the same time, the success of the launch could strengthen North Korea’s military, the only entity that poses a potential threat to Kim’s rule.


The launch’s success, 14 years after North Korea’s first attempt, shows more than a little of the gambling spirit in the third Kim to rule North Korea since it became a country in 1948.


“North Korean officials will long be touting Kim Jong Un as a gutsy leader” who commanded the rocket launch despite being new to the job and young, said Kim Byung-ro, a North Korea specialist at Seoul National University in South Korea.


The propaganda machinery churned into action early Friday, with state media detailing how Kim Jong Un issued the order to fire off the rocket just days after scientists fretted over technical issues, ignoring the chorus of warnings from Washington to Moscow against a move likely to invite more sanctions.


Top officials followed Kim in shrugging off international condemnation.


Workers’ Party Secretary Kim Ki Nam told the crowd, bundled up against a winter chill in the heart of the capital, that “hostile forces” had dubbed the launch a missile test. He rejected the claim and called on North Koreans to stand their ground against the “cunning” critics.


North Korea called the satellite a gift to Kim Jong Il, who is said to have set the lofty goal of getting a satellite into space and then tapped his son to see it into fruition. The satellite, which North Korean scientists say is designed to send back data about crops and weather, was named Kwangmyongsong, or “Lode Star” — the nickname legendarily given to the elder Kim at birth.


Kim Jong Il died on Dec. 17, 2011, so to North Koreans, the successful launch is a tribute. State TV have been replaying video of the launch to “Song of Gen. Kim Jong Il.”


But it is the son who will bask in the glory, and face the international censure that may follow.


Even while he was being groomed to succeed his father, Kim Jong Un had been portrayed as championing science and technology as a way to lift North Korea out of decades of economic hardship.


“It makes me happy that our satellite is flying in space,” Pyongyang citizen Jong Sun Hui said as Friday’s ceremony came to a close and tens of thousands rushed into the streets, many linking arms as they went.


“The satellite launch demonstrated our strong power and the might of our science and technology once again,” she told The Associated Press. “And it also clearly testifies that a thriving nation is in our near future.”


Aside from winning him support from the people, the success of the launch helps his image as he works to consolidate power over a government crammed with elderly, old-school lieutenants of his father and grandfather, foreign analysts said.


Experts say that what is unclear, however, is whether Kim will continue to smoothly solidify power, steering clear of friction with the powerful military while dealing with the strong possibility of more crushing sanctions. The United Nations says North Korea already has a serious hunger problem.


“Certainly in the short run, this is an enormous boost to his prestige,” according to Marcus Noland, a North Korea analyst at the Peterson Institute for International Economics in Washington.


Noland, however, also mentioned the “Machiavellian argument” that this could cause future problems for Kim by significantly boosting the power of the military — “the only real threat to his rule.”


Successfully firing a rocket was so politically crucial for Kim at the onset of his rule that he allowed an April launch to go through even though it resulted in the collapse of a nascent food-aid-for-nuclear-freeze deal with the United States, said North Korea analyst Kim Yeon-su of Korea National Defense University in Seoul.


The launch success consolidates his image as heir to his father’s legacy. But it could end up deepening North Korea’s political and economic isolation, he said.


On Friday, the section at the rally reserved for foreign diplomats was noticeably sparse. U.N. officials and some European envoys stayed away from the celebration, as they did in April after the last launch.


Despite the success, experts say North Korea is years from even having a shot at developing reliable missiles that could bombard the American mainland and other distant targets.


North Korea will need larger and more dependable missiles, and more advanced nuclear weapons, to threaten U.S. shores, though it already poses a shorter-range missile threat to its neighbors.


The next big question is how the outside world will punish Pyongyang — and try to steer North Korea from what could come next: a nuclear test. In 2009, the North conducted an atomic explosion just weeks after a rocket launch.


Scott Snyder, a Korea specialist for the Council on Foreign Relations, wrote recently that North Korea‘s nuclear ambitions should inspire the U.S., China, South Korea and Japan to put aside their issues and focus on dealing with Pyongyang.


If there is a common threat that should galvanize regional cooperation, “it most certainly should be the prospect of a 30-year-old leader of a terrorized population with his finger on a nuclear trigger,” Snyder said.


____


Jon Chol Jin in Pyongyang, and Foster Klug and Sam Kim in Seoul, South Korea, contributed to this report. Follow Jean H. Lee on Twitter: (at)newsjean.


Asia News Headlines – Yahoo! News


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McAfee says will not return to Belize, willing to talk to police






(Reuters) – U.S. software pioneer John McAfee said that he will not return to Belize where police want to question him about a murder case, but that he is willing to let authorities from the Central American nation interview him in a “neutral country.”


McAfee, 67, went into hiding after his American neighbor Gregory Faull was fatally shot in November. He made his way secretly to neighboring Guatemala, but the authorities there deported him to Miami on Wednesday.






“I will not go back to Belize. I had nothing to do with the murder,” a relaxed-looking McAfee said in an interview on CNBC.


Police in Belize want to question McAfee as a “person of interest” in Faull’s killing, though authorities there say he is not a prime suspect. McAfee said he barely knew Faull and had “absolutely nothing” to do with his death.


Belize police say their country’s extradition treaty with the United States extends only to suspected criminals, a designation that does not apply to McAfee.


McAfee, an eccentric tech pioneer, made a fortune from the anti-virus software bearing his name and had lived in Belize for four years.


He has charged that authorities have persecuted him because he refused to pay $ 2 million in bribes, and that the extortion attempt occurred after armed soldiers shot one of his dogs, smashed up his property and falsely accused him of running a methamphetamine laboratory.


Belize’s prime minister has rejected the allegations, calling McAfee paranoid and “bonkers.”


(Reporting by Jim Finkle; Editing by Nick Zieminski)


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Singer-songwriter Carole King to receive U.S. Gershwin prize






(Reuters) – American singer-songwriter Carole King will be awarded the Library of Congress Gershwin Prize for Popular Song, the U.S. national library said on Thursday.


The multiple Grammy Award winner co-wrote her first No. 1 hit at age 17 with then-husband Gerry Goffin and was the first female solo artist to sell more than 10 million copies of a single album, with her 1971 release “Tapestry.”






The prize honors individuals for lifetime achievement in popular music, the library said. It is named after songwriting brothers George and Ira Gershwin.


King, now 70, topped the charts with the song “It’s Too Late” in 1971, but is best known for her work performed by others, including “You’ve Got a Friend” by James Taylor and “(You Make Me Feel Like) A Natural Woman” by Aretha Franklin.


“I was so pleased when the venerable Library of Congress began honoring writers of popular songs with the Gershwin Prize,” King said in a statement. “I’m proud to be the fifth such honoree and the first woman among such distinguished company.”


King and Goffin wrote some the biggest hits of the 1960s before their nine-year marriage ended in 1968. They rose to prominence in 1960 writing “Will You Love Me Tomorrow” for the Shirelles.


The duo also scored hits with “Take Good Care of My Baby,” performed by Bobby Vee in 1961, “The Loco-Motion,” performed by Little Eva in 1962 and “Pleasant Valley Sunday,” performed by The Monkees in 1967, among others.


New York-born King did not hit it big as a singer until 1971, when “Tapestry” topped the U.S. album charts for 15 weeks, then a record for a female solo artist.


Past recipients of the award include Paul Simon, Stevie Wonder, Paul McCartney and songwriting tandem Burt Bacharach and Hal David.


(Reporting by Eric Kelsey; Editing by Jill Serjeant and Xavier Briand)


Music News Headlines – Yahoo! News


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Alexza agitation drug gets EU recommendation, shares jump






(Reuters) – European health regulators recommended approval of Alexza Pharmaceuticals Inc‘s experimental drug Adasuve for controlling agitation in adults with schizophrenia and bipolar disorder, sending its shares up 19 percent.


Adasuve, Alexza’s most advanced drug in development, will be the first treatment for schizophrenia and bipolar disorder that can be inhaled.






“… The beautiful part of (the drug) is that the clinician can give (patients) almost instantaneous response, whereas possibly hours of waiting for any other kind of oral medication, and that is the critical key,” WBB Securities LLC analyst Steve Brozak told Reuters.


Three injectable drugs, Bristol-Myers Squibb’s Abilify, Eli Lilly’s Zyprexa and Pfizer Inc‘s Geodon, are currently approved to calm patients with schizophrenia or bipolar disorder.


The recommendation from the European Medicines Agency (EMA) will be forwarded to the European Commission, which normally endorses recommendations within two or three months.


Alexza estimates that as many as 8 million adults in the EU suffer from schizophrenia or bipolar disorder.


Adasuve is also under review by the U.S. Food and Drug Administration, with a decision expected by December 21.


“It’s simply a question of when it will get approved,” Brozak said.


The FDA denied approval to Adasuve in May, after it found deficiencies at the company’s Mountain View, California manufacturing facility during an inspection.


Adasuve, which delivers an older antipsychotic drug called loxapine, passes through the lungs and into the bloodstream faster than a typical pill. Loxapine is available as an oral drug for schizophrenia.


Adasuve, which the EMA said should be administered only in a hospital, is delivered using Alexza’s Staccato delivery device.


Two late-stage studies were conducted, and both demonstrated statistically significant reductions in agitation compared to a placebo, the company said. The study enrolled 344 adult patients with schizophrenia and 314 adult patients with bipolar disorder.


Alexza’s shares jumped 19 percent to $ 6.25 before easing back to $ 5.75 by mid-morning on the Nasdaq on Friday.


(Additional reporting by Ben Hirschler in London; Editing by Sriraj Kalluvila)


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Google Maps Restores Order to the Universe






Well, that pretty much settles it. Everyone please go back to whatever you were doing.


Today, Google (GOOG) released its free Google Maps for iPhone app in Apple’s (AAPL) App Store. Besides reestablishing galactic tranquility, the new app brings iPhone users all the features they were missing by using Apple’s new home-grown Maps app. Apple’s Maps were pretty and slick, but the service was crippled from the get-go. Sure, turn-by-turn directions were great to have, but losing such things as transit information was a pretty severe price to pay for it.






Google Maps also adds a delightful new feature that Apple’s map app was lacking: accuracy. Reports from Apple Maps users of wrong directions and incorrect information have been legion. I, for one, used Apple’s Maps app to find a bookstore to buy a present for a seven-year-old girl’s birthday party. Apple’s Maps sent me to a Barnes & Noble (BKS), but it was a Barnes & Noble-operated college bookstore at St. Francis College (I’m sure the birthday girl is smart, but the gifts there weren’t terribly festive). When I looked it up on Google’s app after the fact, the special status of the bookstore was indicated.


Google’s new, native app (in this weird interregnum, iPhone users could continue to use a Web version of Google Maps, but the new app is faster, smoother, and more feature-laden) includes old friends such as Street View, so you can see what a destination looks like, as well as public transit information: Bus lines, subways, and commuter rail are all part of the navigation mix. Try to look that information up in Apple’s Maps, and the app suggests third-party apps to provide this data. That’s like a restaurant serving you an appetizer, then refusing to provide an entrée but very nicely suggesting some other places you can go to get a main course. Um, thanks, but I’m already here—why can’t I have a full dinner?


Google’s new app also incorporates more data for the locations you may be looking for. Look up a restaurant on Apple’s maps app, and you could pull some data from Yelp (YELP), but the same search on Google Maps yields Zagat ratings, menus, links to OpenTable and other useful information.


Here’s what you don’t get with Google Maps instead of Apple’s Maps: You’ll lose Flyover, Apple’s gee-whiz feature where you can see a satellite-image of an area in a 3D-like perspective. Flyover was impressive to look at, but it’s always been little more than a gimmick. After all, being able to travel virtually over land and between buildings is not nearly as useful as Google’s Street View, where you can actually see where you’re going. Unless you’re Superman, I suppose. OK, fine—if you’re Superman, Flyover is incredibly useful. The rest of us are better off with more terrestrial navigation capabilities.


You also lose Siri integration, so you can’t activate Google Maps by voice. That’s a bummer, but not a dealbreaker. Google Maps more than compensates for that by linking to your Google account, so any Maps search you’ve performed on your PC will be listed in the history of the Google Maps app. This is particularly helpful if you’re planning a trip: You can find your destinations on your laptop or tablet at home (which is easier than entering all that info on a tiny touch screen), and all your places will be a tap away on your phone when you get in the car.


Last but not nearly least, Google Maps now has turn-by-turn navigation, a feature that had previously been reserved for Android users only. Find a destination, and Google will guide you by voice and image, showing and telling you the next turn you have to make.


And for this, we actually have Apple’s Maps app to thank. Turn-by-turn navigation was the one feature you couldn’t get through Google Maps, part of the ongoing blood feud between the two companies. But once Apple offered the feature in its mapping app, Google was forced to respond. Presumably, Apple engineers and coders are hard at work at their answer to this latest salvo from Mountain View.


As consumers, we should be happy, as all this competition works to our benefit. Think about it that way, and Apple Maps was the best thing that ever happened to Google Maps.


Businessweek.com — Top News


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Cuban lawmakers meet to consider economy, budget






HAVANA (AP) — Cuban lawmakers are holding the second of their twice-annual sessions with a year-end report expected on the state of the country’s economy.


Legislators are also to approve next year’s budget.






Cuban leaders have sometimes used the parliamentary gatherings to make important announcements or policy statements.


Observers will be watching for word on the progress of President Raul Castro‘s economic reform plan and efforts to promote younger leaders.


The unicameral parliament will reconvene in February with a new membership following elections. It is then expected to name Castro to another five-year term.


State-run media said Castro presided over Thursday’s session.


It was not open to international journalists.


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iPhone 5 hits China as Apple market share slips






SHANGHAI (Reuters) – The China release of its iPhone 5 on Friday should win Apple Inc some respite from a recent slide in its share of what is likely already the world’s biggest smartphone market, but its longer-term hopes may depend on new technology being tested by China‘s top telecoms carrier.


Cupertino, California-based Apple has been in talks about a tie-up with China Mobile for four years. A deal with China’s biggest carrier is seen as crucial to improve Apple’s distribution in a market of 290 million users – which is forecast to double this year.






China is Apple’s second-largest and fastest-growing market – it brings in around 15 percent of total revenue – but the company’s failure to strike a deal with China Mobile means it is missing out on a large number of phone users. As the China pie grows, Apple’s sales increase, but without China Mobile, it’s losing ground at a faster rate compared to other brands.


“In absolute terms, this (iPhone 5) launch will certainly result in strong sales for Apple in China. However, in relative terms, I don’t believe it will move the needle enough in market share,” said Shiv Putcha, a Mumbai-based analyst at Ovum, a global technology consultant.


China Mobile and Apple initially said they were separated only by a technical issue – as the Chinese carrier runs a different 3G network from most of the world – but that has evolved into a broader and more complex issue of revenue-sharing.


“China Mobile and Apple still have to solve many issues, such as the business model, articles of cooperation and revenue division, but I believe we will reach an agreement eventually,” China Mobile CEO Li Yue was reported by Chinese media as saying in Guangzhou last week.


Apple China declined to comment. China Mobile said it had no update to the Apple discussions.


STRONG PRE-ORDERS


Apple’s ranking in China’s smartphone market slipped to sixth in July-September, according to research firm IDC, [ID:nL4N09G1QK] but investors, primed to look to China product launches for an uptick in Apple’s quarterly sales, have good headline numbers to digest – more than 300,000 iPhones pre-ordered on one carrier alone. But it’s the lack of a deal with the No.1 carrier that prevents those numbers being stronger.


The iPhone is currently sold through Apple’s seven stores, resellers and through China Unicom and China Telecom – which together have fewer than half the mobile subscribers of bigger rival China Mobile.


“Apple’s market share declined because of the transition between the iPhone 4S and 5. Their market share will recover (with the iPhone 5), but if you don’t have China Mobile, the significant market share gains will be very difficult,” said Huang Leping, an analyst at Nomura in Hong Kong.


TD-LTE: STILL DISTANT


Cutting a deal with a Chinese state-owned carrier may be less optimal than the deals Apple is used to in other markets, and analysts note that China Mobile wouldn’t necessarily open the flood gates for Apple.


Ovum’s Putcha believes Apple and China Mobile will eventually strike a deal – though this would be for an iPhone running on China Mobile’s next-generation network rather than its current 3G network.


Of China Mobile’s 704 million subscribers, only 79 million are on its 3G network, and Apple has been reluctant to sign up to China Mobile’s under-utilized, homegrown TD-SCDMA technology. “Apple likely doesn’t see the return-on-investment in extending themselves for TD-SCDMA,” Putcha said.


China Mobile is currently trialling its next-generation network, TD-LTE, which could be of more interest to Apple, but full-scale commercial use – and an iPhone tie-up – could still be years away.


ANDROID THREAT


Meanwhile, rivals are circling, eating away at Apple’s smartphone market share. Samsung Electronics, Lenovo Group and little-known Chinese brand Coolpad held the top three slots in the third quarter, according to IDC.


All three have relationships with China Mobile and offer smartphone models at different price points. Apple competes exclusively at the high-end, and even there, rivals are rolling out models with China Mobile. Last week, Nokia said it planned to release its latest Lumia smartphone with China’s top carrier, which is also expected to launch Research in Motion’s new Blackberry 10, analysts predict.


“The threat will still come more from the Android camp where they have many vendors already working with China Mobile and offering high-end phones,” said TZ Wong, a Singapore-based IDC analyst.


While these smartphones don’t generate the buzz of a new iPhone, Chinese buyers are not known for their brand loyalty, and this could siphon away users considering an Apple upgrade.


“I’ve used a Blackberry, Android and iOS and, personally, I want to try the Windows 8,” said Andy Huang, a 37-year-old fund manager, who owns most iPad models, an iPhone 4 and a 4S. “I think the Windows 8 is very innovative.”


With a China Mobile deal looking some way off, Apple could always boost market share by offering cheaper models – the basic iPhone 5 will cost 5288 yuan ($ 850) without a contract – though this appears an unlikely route for a high-end brand.


“If they want to expand market share, probably the only way to do it here dramatically would be to put out a lower cost phone,” said Michael Clendenin, managing director at RedTech Advisors. “It’s really uncertain if they’d decide to go that route … Apple’s a mystery in that regard.”


($ 1 = 6.2518 Chinese yuan)


(Additional reporting by the Shanghai Newsroom and Jane Lee; Editing by Kazunori Takada and Ian Geoghegan)


Tech News Headlines – Yahoo! News


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