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Analysts Offer Predictions On The Significance Of Apple's China Mobile iPhone Deal

Analysts Offer Predictions On The Significance Of Apple's China Mobile iPhone Deal

December 6, 2013

Following the “confirmed” news of Apple's iPhone deal with China Mobile, analysts have been hard at work calculating just how big this partnership could be. The answer? “Huge,” according to a recent report from AllThingsD.

As a reminder, following a courtship that intensified over the last few months (but which dates as far back as 2009), an article from The Wall Street Journal a couple of days ago confirmed what most of us were already expecting: that China Mobile would offer Apple's new iPhones from the same day its TD-LTE network launches, on Dec. 18. The publication explained:

At [its] Dec. 18 event, China Mobile plans to unveil a brand for its fourth-generation, or 4G, network. China Mobile executives have said they would only begin to sell the iPhone after introducing 4G services. China’s Ministry of Industry and Information Technology said Wednesday it gave licenses to China Mobile and its smaller rivals to operate the higher-speed mobile networks, clearing one of the last hurdles.

Before this, we'd heard from Amit Daryanani of RBC Capital Markets that a China Mobile iPhone deal could score Apple an additional $10 billion per year in revenue, but now in the aforementioned article from AllThingsD, the opinion of a further selection of industry analysts is presented.

The publication notes: “Piper Jaffray analyst Gene Munster figures that Apple could sell 17 million total iPhones on China mobile in 2014. That’s about 10 percent of the carrier’s 3G subscriber base, and two percent of its total subscribers, which seems a reasonable estimate.”

Other analysts, however, are predicting higher sales:

Munster’s forecast is conservative compared to some others. ISI analyst Brian Marshall, for example, is looking for more than double that 17-million-unit figure. He’s calling for iPhone sales on China Mobile of 38.7 million for calendar 2014, with seven million sold in Q1, 8.7 million in Q2, 10.5 million in Q3, and 12.5 million in Q4.

Brian White with Cantor Fitzgerald, too, is predicting 2014 China Mobile iPhone sales of between 20-24 million.

Finally, AllThingsD adds that Wedge Partners analyst Brian Blair is expecting sales of between 18-20 million, and observes that strong demand from China Mobile's huge subscriber base will of course be required in order for such impressive figures: “We expect a strong marketing push to follow the official announcement, and that is what is critical,” he told the publication. “It’s Apple’s job to turn the Chinese consumer away from entrenched brands like Samsung.”

China Mobile's “huge subscriber base” consists of around 740 million customers, and it's the largest carrier in China - which itself is the world's largest smartphone market - by a long way. To put this figure into perspective, rival carriers China Unicom and China Telecom have 454 million subscribers between them.

Despite strong interest in the iPhone 5s back when the handset launched, Apple's share of China's lucrative smartphone market is still small. Though one report has indicated that this meagre share could double as soon as 2014 off the back of a China Mobile iPhone deal.

We'll keep you updated with further information as we receive it.

In the meantime, see: You've Still Got Time: Apple's iPhone 5s Now Shipping In 1-3 Business Days, Hello, Home! SmartThings Mobile Updated With iOS 7 Design And New Key Feature, and Jump For Joy With The Premium Pleasures Of Get Set Games' Mega Jump Plus.

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