Apple plays DoCoMo against Softbank over iPhone

Journalists test an Apple iPhone following its introduction in Berlin September 19, 2007. Apple Inc is playing mobile operators NTT DoCoMo Inc and Softbank Corp against one another on selling the iPhone in Japan, where it would vie with some of the world's most advanced phones.

TOKYO (Reuters) - Apple Inc (AAPL.O) is playing mobile operators NTT DoCoMo Inc (9437.T) and Softbank Corp (9984.T) against one another on selling the iPhone in Japan, where it would vie with some of the world's most advanced phones.

Apple is in talks with both DoCoMo, Japan's top carrier, and number three Softbank about launching the iPhone, but both have balked over the share of subscriber revenue that Apple is demanding, sources at the Japanese companies said on Tuesday.

Apple Chief Executive Steve Jobs met DoCoMo President Masao Nakamura in San Francisco earlier this month, a company source said.

The two discussed the terms of a deal should DoCoMo, which controls over half of Japan's mobile market, become exclusive carrier partner for the iPhone, he said.

"The negotiations are not going smoothly, as Apple's conditions are extremely hard to meet," the source said. "The ball is in Apple's court right now."

Apple's talks with Softbank, which bought Vodafone's (VOD.L) local unit in 2006, could be a negotiating tool to win a favorable deal with DoCoMo, another source said.

Spokesmen at DoCoMo and Softbank declined to comment.

Apple needs a local partner to promote the iPhone in Japan, home to close to 100 million mobile phone users.

Apple has chosen France Telecom's (FTE.PA) Orange, Deutsche Telekom's (DTEGn.DE) T-Mobile and Spanish Telefonica-owned (TEF.MC) O2 in Britain to bring the iPhone -- which combines Apple's iPod music player, a video player and a Web browser -- to Europe.

(Reporting by Nobuhiro Kubo and Mayumi Negishi; Editing by Paul Bolding)