UPDATE:China Mobile Chairman:Still In Talks With Apple On Iphone

China Mobile Ltd. (CHL) Chairman Wang Jianzhou said Friday the company is still in talks with Apple Inc. (AAPL) over selling iPhones in China.

The deal between competitor China Unicom (Hong Kong) Ltd. (CHU) and Apple to sell iPhones in China is "absolutely not exclusive," and China Mobile still hopes to offer iPhones in China, Wang said on the sidelines of the World Economic Forum in the northeastern coastal city of Dalian.

He also said China Mobile hopes to eventually sell Ophones, which run on Google Inc.'s (GOOG) open-source Android operating system, at prices as low as CNY1,000 (US$146.40) in China. Other smartphone models sell for CNY2,000-CNY5,000 in the country.

Wang said China Mobile will be able to sell smartphones more cheaply if it uses Google's open-source operating system than if it develops its own operating system or pays for an exclusive operating system, such as the one powering Apple's iPhone.

China Mobile recently reached an agreement with HTC Corp. (2498.TW) under which the Taiwanese mobile phone maker will produce a line of smartphones for China Mobile using the Android operating system.

China Mobile, a Hong Kong-listed company, hopes to list shares on mainland China "very soon," Wang said.

But he added the planned share offering would be through a new method, instead of in the form of either an ordinary A-share listing or through depositary receipts. He didn't elaborate.

Wang declined to give a timeline for a possible listing, but added "we have already started working on the listing."

China's government has said it plans to open its exchanges to listings of foreign companies, which will open a path to China listings for red-chip companies such as China Mobile. Red-chip companies are registered and listed overseas, typically in Hong Kong, but most of their assets are in mainland China.

Ted Tokuchi, managing director and head of investment banking at Citic Securities Co. (600030.SH), the country's top brokerage by market value, said Tuesday China may issue draft regulations on domestic listings by overseas companies after the week-long National Day holiday next month, if the capital market continues to improve.

Wang said China Mobile's monthly additions of new users have been falling due to increasing competition from rivals, but also because "the market is slowly maturing." He didn't give details.

In July, China Mobile added less than 5 million new mobile phone users, down from as many as 7 million a month in 2008.

While some wealthy Chinese provinces, such as Guangzhou, are already at or near 100% cell phone penetration, there is still room for growth in rural areas, he said.

"In the countryside, there are still a few hundred million people without mobile phones," he said. "The market is bigger than we imagine."

-By Aaron Back, Dow Jones Newswires; 8610 6588-5848; [e-mail]