Here’s Why iPhone Reservations Skyrocketed in China
Although Apple (NASDAQ:AAPL) is still lacking a distribution deal with China Mobile (NYSE:CHL), the iPhone maker appears to be having no problem selling its new devices through the country’s other carriers. As reported by Bloomberg, China Unicom (NYSE:CHU) recently announced via microblogging site Weibo that reservations for the iPhone 5S and iPhone 5C have surpassed 100,000 units.
Apple currently only has distribution deals with China Unicom and China Telecom (NYSE:CHA), the country’s second and third largest carriers, respectively. While China Unicom has yet to announce its pricing plans for Apple’s newest iPhones, China Telecom recently revealed that the 16GB iPhone 5C will require a $733 down payment and the 16GB iPhone 5S will require an $864 down payment.
However, subscribers can also get the devices for free if they sign up for a 2-year service contract that adds the cost of the device into a monthly payment plan. Sun Hung Kai Financial analyst Eva Yip noted via Bloomberg that, “The plan is more conservative this time. The handset subsidy as a percentage of upfront payment is less than that of the iPhone 5 plan.”
Despite the reduced subsidy, it appears that Apple’s devices are quickly gaining ground in China’s smartphone market. It should be noted that China is currently the only market where users have the option to pre-order the iPhone 5S. However, regardless of the ability to reserve a device, customers won’t be able to pick up their new iPhones until September 20.
Bloomberg’s unnamed sources suggest that Apple is on the verge of signing a distribution deal with China Mobile, the country’s largest carrier with over 700 million subscribers. As reported by Apple Insider, Deutsche Bank analyst Chris Whitmore believes that a deal with China Mobile could boost Apple’s iPhone sales by 20 to 25 million units.
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