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China Mobile Now Selling iPhones

China Mobile Now Selling iPhones

Apple (NASDAQ: AAPL) is finally selling iPhones to China Mobile (NYSE: CHL) customers.

The road to this day was full of rumors that proved to be false including the December 18 launch date that media outlets widely reported.

Then there was the 2013 first of its kind China launch event of the newest iPhone where Apple watchers were sure that a big announcement regarding China Mobile would take place.

In the end, it all led up to January 17.

As part of the big day, 10 Chinese customers received an autographed iPhone from Apple CEO Tim Cook and China Mobile Chairman Xi Guohua.

Now that the launch rumors are done, all eyes will turn to how much demand each company receives as a result of the partnership.

On Tim Cook’s Twitter feed, he posted a picture of a busy store indicating that first-day demand might be strong.

A picture might be worth a thousand words but it doesn’t mean much of anything when it comes to money.

Related: The Apple – China Mobile Deal By the Numbers

Analysts are still all over the map. Some say that China Mobile will sell about 10 million iPhones annually while others are as high as 30 million but the iPhone will be available to only a portion of China Mobile customers.

According to AppleInsider, only those who subscribe to its most expensive data plan will be able to get the phone and in order to receive the full subsidy, customers have to sign a two-year contract worth about $97 per month.

But some analysts believe that a subsidy war might begin. Michael Clendenin, managing director of Shanghai-based RedTech Advisors said, "China Mobile, if they're not making their targets on sales for these phones, they're going to increase the subsidies... It's like airlines: the other guys will fall like dominoes, so China Unicom will do it and China Telecom will do it."

Most analysts believe that Apple will see a sales boost in China but it might be short-lived. A thriving grey market, where unauthorized retailers sell the phone for less than authorized dealers and the fact the fact that Chinese customers prefer domestic offerings could limit sales.

Disclosure: At the time of this writing, Tim Parker was long Apple.


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Posted-In: Apple china mobile iPhone Tim CookNews Retail Sales Global Tech Best of Benzinga

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