iPhone Finally Comes To China Mobile
With little fanfare, it finally happened.
With more than 760 million subscribers (significantly larger than Verizon) China Mobile represents a huge win for Apple (NASDAQ: AAPL). It’s no wonder that CEO Tim Cook, normally not one for lengthy comments to the press, had so much to say.
"Apple has enormous respect for China Mobile and we are excited to begin working together. China is an extremely important market for Apple and our partnership with China Mobile presents us the opportunity to bring iPhone to the customers of the world's largest network," Cook said.
"iPhone customers in China are an enthusiastic and rapidly growing group, and we can't think of a better way to welcome in the Chinese New Year than getting an iPhone into the hands of every China Mobile customer who wants one," Cook added.
Excitement Across The Board
China Mobile Chairman Xi Guohua was equally excited. Guohua said, "Apple's iPhone is very much loved by millions of customers around the world. We know there are many China Mobile customers and potential new customers who are anxiously awaiting the incredible combination of iPhone on China Mobile's leading network,"
The other key player in the deal, Wall Street, seemed happy as well. In early pre-market trading Monday, Apple was up more than $20 or about 3.7 percent—its highest level in 2013.
How big is the deal?
Dow Jones cited reports prepared by analysts that estimated 2014 sales at 39 million in China alone. This compares to 34 million units sold worldwide in the most recent quarter. That would represent a 25 percent increase in units sold each quarter next year.
There’s still the problem of price.
According to CNBC Asia reporter Eunice Yoon, it costs about $850 to purchase from grey market vendors and China Mobile’s competitor, China Unicom currently offers the iPhone for free when customers purchase about $1,000 worth of minutes. She says China Mobile will have to offer a package at least as competitive as China Unicom’s current package.
Despite the criticism that the iPhone will be too expensive for most China customers, demand is expected to be strong, according to Yoon.
Disclosure: At the time of this writing, Tim Parker was long Apple.
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