Did Apple’s (NASDAQ:AAPL) distribution deal negotiations with China Mobile (NYSE:CHL) hit a snag over declining sales of the iPhone 5C? According to a note to investors obtained by Apple Insider, KGI Securities analyst Ming-Chi Kuo attributed the distribution deal delay to the unexpectedly low sales of Apple’s mid-range smartphone.
Kuo estimated that worldwide sales of the iPhone 5C saw a quarter-over-quarter decline of approximately 17 percent, dropping from 7.24 million units in fourth-quarter fiscal 2013 to 6.03 million units in first-quarter fiscal 2014. The analyst believes falling demand for the iPhone 5C may have precipitated a delay in the nearly completed distribution deal negotiations between Apple and China Mobile. Kuo also said Apple shipped a total of 38 million iPhone units worldwide in the first quarter of fiscal 2014.
“We believe that weak sales of iPhone 5C may trigger a re-negotiation of the Apple-China Mobile partnership,” wrote Kuo in the note seen by Apple Insider. “However, the indications are that the deal is nearing an end. While recent market speculation calls for the deal to boost 1Q14 iPhone shipments to 45-50mn units, we think this is overly optimistic.”