Is This Proof of An Apple-China Mobile Deal?

Mergers and AcquisitionsHas Apple (NASDAQ:AAPL) already cut a deal with the world’s largest carrier? According to “people familiar with the matter” cited by the Wall Street Journal, Apple is making arrangements to ship the lower-cost iPhone to China Mobile (NYSE:CHL).

China Mobile is the world’s largest carrier with approximately 744 million subscribers according to its website. As reported by AllThingsD’s John Paczkowski, ISI Group analyst Brian Marshall believes that a deal with China Mobile could add as many as five million units to Apple’s fourth-quarter sales if the iPhone is adopted by just three percent of the carrier’s 3G subscribers.

Marshall also believes that the long-term impact on Apple’s iPhone sales would be even greater. The analyst estimates that China Mobile could boost Apple’s total iPhone sales in 2014 by 38.7 million units.

Although Morgan Stanley analyst Katy Huberty wasn’t convinced that a “formal China Mobile relationship” was a certainty, she estimated that a $399 iPhone 5C could add 13 points to Apple’s market share in China, reports Barron’s.

Besides boosting Apple’s market share, Huberty also noted that the iPhone 5C could steal market share away from Apple’s rivals. Based on a survey of Chinese handset users, the Morgan Stanley analyst estimated that Samsung (SSNLF.PK), HTC, and Nokia (NYSE:NOK) would all suffer share loss from a less-expensive iPhone.

Although Apple may be ready to ship its iPhones to China Mobile, it remains to be seen if the Chinese carrier is equally prepared. According to a recent note from KGI Securities analyst Ming-Chi Kuo via Apple Insider, China Mobile may have to delay its iPhone release until it finishes preparing its TDD-LTE network.

However, with or without China Mobile, it appears that Apple will soon see a major benefit from its increased presence in the world’s largest country. Apple is scheduled to hold a media event in Beijing on September 11, one day after the U.S. media event that will be hosted at its Cupertino headquarters.

Here’s how Apple closed out the trading week.


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