Speculation that Apple (NASDAQ:AAPL) is close to reaching a deal with China Mobile (NYSE:CHL) has reached fever pitch this week, and analysts are forecasting what an agreement with the world’s largest wireless carrier will mean for Apple.
Some think that the deal could boost Apple’s iPhone sales by up to 20 million units in the year after the iPhone goes on sale on China Mobile’s network. Others have been more cautious with their expectations, noting that the unsubsidized price of the iPhone is more expensive than many Chinese consumers can afford.
A new report from Bernstein Research seen by Barron’s suggests that China Mobile’s addition of the new iPhone lineup along with the upcoming launch of China’s 4G network could end up being more beneficial for China Mobile than Apple. Bernstein’s Toni Sacconaghi and his Hong Kong-based colleague Chris Lane speculated that China Mobile will offer a substantial subsidy on the iPhone, as that has been the company’s practice in the past and will help more Chinese customers be able to afford one of the phones.
The researchers also said that the deal could lead to China Mobile stealing customers from competitors like China Unicom (NYSE:CHU) and China Telecom (NYSE:CHA), rather than creating many new iPhone sales for Apple.
“With China Mobile offering the iPhone on 4G, the hypothesis is that many of those users will migrate their devices away from Unicom or Telecom, driving a surge in incremental sales, but ultimately no accompanying increase to the installed base of iPhones. If such a phenomena did occur, we could see an initial surge in iPhones following availability at China Mobile, but weaker sales going forward,” Sacconaghi and Lane said, per Barron’s.
The researchers ultimately concluded that a deal with China Mobile would lead to sales of 15 million iPhones during the first 12 months the devices are available with the carrier.
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