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Neither company would give a reason, though speculation centres on China Mobile's aversion to the revenue sharing model Apple has insisted on elsewhere. The talks may also have floundered on technical issues and on
access to certain content.

Speaking in November, an unnamed China Mobile executive told Reuters the company had a problem with iPhone's having locked SIM cards designed to tie users

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to tariffs from which Apple takes a cut.

"Our business model does not entail sharing revenue with terminal producers - we don't share revenue," he said.

A spokeswoman for China Mobile would confirm only that the companies had "terminated talks with Apple".

China Unicom, the country's other mobile operator, said that it had no iPhone plans, but is open to talks.

Apple has said nothing publicly about its intentions in the Chinese market, though the recent appointment of Andrea Jung to the company's board suggests it is not without ambitions. As chief executive of Avon, Jung, a Mandarin speaker, is credited with leading the cosmetics company's highly successful push into the world's most populous country.

Meanwhile, fellow board member Eric Schmidt has begun recusing himself from discussions relating to the iPhone. As Google's chief executive, Schmidt naturally has an interest in the search giant's Android mobile platform that conflicts with his role at Apple.